Monday, April 29, 2013
Aaron Rodgers deal: Rare win-win
By Kevin Seifert
I've reviewed the details of the Green Bay Packers' contract agreement with quarterback Aaron Rodgers, and here's what we can say: Rodgers didn't take a hometown discount under the strict definition but the deal is quite manageable on a relative scale for elite NFL quarterbacks.
In other words, it was a rare win for both sides.
The Packers had a key advantage over other teams who have negotiated mega-million dollar quarterback contracts recently. Rodgers had two years remaining on his previous deal, a structure that allowed the Packers to spread out a record-setting five-year extension over a longer period. That helped lessen the Packers' annual salary-cap hit, as well as their cash outlay, over the full seven years they now have Rodgers under contract for.
An elite quarterback's contract has the potential to cripple an NFL team. Rodgers' most certainly does not.
As the chart at the bottom shows, Rodgers' cap number won't exceed $20 million until 2017 and won't elevate beyond $21.1 million at any point. Compare that structure to Dallas Cowboys quarterback Tony Romo, whose new deal will count $25.3 million in 2015. Baltimore Ravens quarterback Joe Flacco's deal will count $28.55 million against the cap by 2016, and the New Orleans Saints are looking at a cap hit of $26.4 million for Drew Brees by '16.
Of this there can be no doubt: The Packers and Rodgers agreed on a deal that won't be as onerous as those for Flacco, Brees and even Romo. Rodgers, in fact, seems likely to play the next seven years without a significant renegotiation, giving the Packers a long-range planning advantage.
With that said, it's difficult for me to classify the deal as an obvious hometown discount when it set a number of NFL records, including the payout over the first three years ($65.2 million). Rodgers will also tie an NFL record for single-year payout by receiving $40 million in cash during the 2013 league year. (As we discussed earlier, Rodgers really had no incentive to take a true hometown discount because there is no reason to expect it would change how the Packers do business with other players.)
The best way to view those aspects of the deal is as a tradeoff for agreeing to spread the payout of a five-year extension over seven years. In the end, the Packers have Rodgers signed to a seven-year deal worth a total of $130.75 million.
The annual average of those figures, $18.7 million, is less than what Flacco, Brees and Denver Broncos quarterback Peyton Manning receive. That, along with the manageable cap structure, are the biggest wins for the Packers. In return, Rodgers is getting a record-setting amount of cash now and over the next three years rather than await a backloaded payout that might never come. A win-win all around, if you ask me.