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Friday, June 21, 2013
Revisiting details of Hernandez contract

By Mike Reiss

In light of the criminal investigation surrounding Patriots tight end Aaron Hernandez, some have asked about details of the five-year contract extension that Hernandez signed with the team last August.

Let's revisit those details.

Hernandez had two years remaining on his original rookie contract (2012 and 2013) when he signed a five-year extension through 2018. The extension has a total maximum value of about $40 million.

Here is how it broke down:

Signing bonus:
$12.5 million
Paid in three installments -- $6 million up front, $3.25 million in March of 2013 and $3.25 million in March of 2014

Base salaries:
2012 -- $540,000
2013 -- $1.323 million
2014 -- $1.2 million
2015 -- $2.3 million
2016 -- $5 million
2017 -- $6 million
2018 -- $6 million

At this point, when looking solely at signing bonus and base salaries, Hernandez has earned $9.79 million of the extension.

For salary cap purposes, the signing bonus is prorated over five years of the deal (that's the maximum allowed by the CBA). This means Hernandez' salary cap charge is $2.5 million ($12.5 million signing bonus divided by five) plus his base salary and any other bonuses in each year.

For those asking what the salary cap charge would be in the event the Patriots ever decided to terminate the contract, the charge would be the acceleration of the $12.5 million signing bonus. If that happened in 2013, Hernandez would count $2.55 million against the salary cap, and then in 2014 would carry a cap charge of $7.5 million from the remaining proration on the signing bonus.

One other factor to consider: A club can recover bonus money and avoid a cap hit if a player violates one of the league's personal conduct policies or defaults on contract language.