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Reviewing Joel Corry's Predicted Extension for Rodgers

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Reviewing Joel Corry's Predicted Extension for Rodgers

Joel Corry, a former NFL Agent, has written an article predicting the structure of Aaron Rodgers' contract extension. You can read the full article here, but I will summarize his prediction.  It tacks on an additional five years to Rodgers' current deal, making him a Packer through the 2024 season when he will be 40 (aged 41 in December 2024). 
 
The deal would add five new years at $32 million AAV.  It would pay Rodgers $202 million over seven years, or an average of $28.857 million per year.  The signing bonus would be $52.5 million, $87 million guaranteed overall but considerably less than that guaranteed at signing. The cap hit for 2018 would be essentially unchanged, and then would be about $31 million from 2018 through 2024.  
 
The first thing I find striking is that other than the sheer size of the numbers, this contract has to be Russ Ball's dream scenario.  By extension, it also would require a very reasonable attitude on the part of Rodgers.  It is a standard (for Green Bay) type of contract with the guaranteed money coming from the signing bonus, though an exception has been made to guarantee some very large roster bonuses in years two and three (something Green Bay has done for Rodgers in the past).  Years six and seven would have no dead money, and years four and five would have very manageable dead money charges. 
 
Aaron Rodgers would have to be unconcerned about the team making him play out his contract in years six and seven, or even about actually earning his base pay for those seasons since he has no dead money protecting his base pay.  It does not use an option bonus starting in year 2 as I suggested, and as Atlanta actually did.  It does not use the 50% Down rule (despite the way the base salaries look in 2018 and 2019), which I also used as an innovative way to spread out cap hits.
 
The contract would make Aaron Rodgers the first $200 million dollar man and would set records for the largest signing bonus, largest new money AAV, and highest average pay per year (at $28.857 million just a tiny bit more than Ryan's $28.2 million yearly average), and cash flow to Rodgers.  It does not set records for the most guaranteed at signing, the most guaranteed, and at 43 percent, is well short of Ryan's 63 percent guaranteed and would be much less than Cousin's 100 percent guaranteed contract. 
 
Mr. Corry noted that while Rodgers' 2013 extension gave him the largest AAV, Rodgers did not insist on the largest signing bonus, most guaranteed, or the most guaranteed at signing.  Still, there is no way to know if Rodgers will feel the same way now.  This contract certainly would not please the NFLPA.
 
The other thing that I find striking is the effect this contract would have on the team's salary cap, both short-term and long-term.  The $21 million cap hit for 2018 is roughly the as currently scheduled, but the $30 million cap in 2019 is about $9 million more.  OTC projects that Green Bay will have $41.26 million in cap space for 2019, but lists only 38 players under contract.  We will surely have 51 players under contract: since the NFL minimum salary will rise to $495 thousand, those 13 additional players will reduce the salary cap space to about $34.8 million, and Rodgers' proposed extension will reduce it by $9 million more to $25.8 million.  
 
OTC indicates that Green Bay has $16.14 million in current cap space, but that needs to be reduced by the amount necessary to sign the remaining draft picks (about $2.45 million), account for the 52nd and 53rd player on the roster ($1 million), the practice squad ($1.29 million minimum) and miscellaneous expenses like injury settlements and players who go on the IR who would not have made the team (perhaps another $1 million - Talley and Herb Waters alone counted almost $700 thousand on the salary cap last season).  That would leave about $10 million. 
 
The team might well sign more free agents or sign veteran players who get cut this summer, and there will be other charges against the cap.  Our players who are scheduled to be free agents in 2019 include Mo Wilkerson, Matthews, Cobb, Clinton-Dix, Montgomery, Ryan, and Kendricks.
 
Aaron Rodgers' cap charge for 2018 would be 11.85% of the salary cap.  Assuming a 7 percent annual increase in the salary cap, the percentage of the salary cap paid to Rodgers would be 15.82 percent in 2019, 15.03 percent in 2020, 14.28 in 2021, 13.56 percent in 2022, and then drop to 10.86 percent in 2023 and 11.66 percent in 2024.  The highest percentage of the salary cap previously ever paid to Rodgers was 13.2 percent, and usually, he was paid less than 12 or less percent of the cap.  
 
Those percentages of the salary cap are fairly hefty, though not much more than what those who advocated for paying Rodgers a flat percentage of the cap suggested.  Some believe that a team cannot win a super bowl if it is paying its quarterback more than 13.1 percent of the salary cap: most of the percentages in this contract are well above that threshold.  I do not believe that 13.1 percent is some kind of magic number, but paying one player a large percentage of the salary cap will tend to squeeze the number of cap dollars available for others.  The solution is always the same: draft well and often.         
 
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Fan friendly comments only: off Comments (13) This filter will hide comments which have ratio of 5 to 1 down-vote to up-vote.

Lare's picture

"Some believe that a team cannot win a super bowl if it is paying its quarterback more than 13.1 percent of the salary cap: most of the percentages in this contract are well above that threshold."

I don't think it's as much about what "some believe" as much as it is that it has never been done before. There are always exceptions to the rule, if this happens we'll have to see if this is one of those cases.

It's a lot of money. Rodgers is worth it as long as he stays healthy, if not we're probably not going to be Super Bowl contenders for a while.

WKUPackFan's picture

The 13,1% is not "the rule". It is a statistic that someone noticed and turned into a talking point. It could just as easily be said that no team has won the Super Bowl with a QB taking 1% of the cap.

Without a sufficient sample size and proper underlying assumptions, the 13.1% number is meaningless.

GBPDAN1's picture

Pay the man. Based on the crazy contracts of lesser talented QBs, we basically have no choice. Lock AR up and let's move forward. Yes, this puts more strain on our cap, but, what are we without Rodgers?

We need to draft well and find quality talent on rookie salaries to help compensate. Go BG!

Bert's picture

I agree DAN1. There's an upside and a downside with having the best player in the game. Pay him according to his value to the organization and move on. The cap management may get tricky but that's just part of having such a great talent as AR. Bottom line is we can't win without him.

GBPDAN1's picture

That's the way I'm looking at it, Bert. These numbers and guarantees are scary and the cap hit is problematic regarding acquisitions and retention of quality players.

But, it's the way the league has valued high end QBs and Rodgers is the best of the best . Sign the man and let's move forward.

flackcatcher's picture

Nice overview TGR. Corry represents the best case in signing Rodgers. His upcoming new contract will push up the pace of the rebuild. I think players who could expect to play out their contracts will either be traded or more likely outright released. If not this year, next year for sure. My guess is this the last year for a lot of long time players for this team. Much of the Packers short term future, will depend on how the Packers can gain the cap space, for signing players after their rookie contracts. Talk about threading a needle......

stockholder's picture

NUTS! Just Nuts! 7 years 202 million? Nuts! Just Nuts! He's not the best player in the Game. If he played for another team they wouldn't win. I don't see how they could afford him either. We've seen this so many times in SPORTS. The Big Wheel gets the money. The team gets the shaft. Commonsense please!

Since '61's picture

Excellent job TGR! Thank you for your hard work to keep us informed.

As you correctly pointed out, this would be Russ Ball's dream scenario. Rodgers and/or his agent may push for a more expensive scenario. I think a 5 year extension sounds right but we'll see how the actual numbers play out. I expect that it will be a $200+ million deal. Thanks, Since '61

Andrew Lloyd Peth's picture

Excellent article and breakdown.

The big takeaway for me is this: We have to be EXTREMELY smart with not wasting any money elsewhere. Every dollar we save by shedding unnecessary contracts will help greatly in moving money forward to help in coming years.

In light of this reality, we should look very, very closely at the contracts of Cobb and Bulaga. It's not as simple as "Well, this is the more reliable player than the unproven backups," or "Hey, we've got the money."

There is a real consequence in retaining overpaid players today, since when combined with Rodgers's extension, today's overpayments could cost key players in years to come.

John Galt's picture

One year extension and use (2) 1st rounders next year on a QB.

Thegreatreynoldo's picture

I thought the agent's article was excellent. On the bright side, the highest cap hit was $31.5M. Matt Ryan will have a $34.3M cap hit in 2021 and a $33M cap hit in 2023. Of course, he is a bit younger, so they might be able to renegotiate and add a year to knock those figures down. I had higher cap hits but I started with $11.2M in 2018 so we could sign some free agents.

marpag1's picture

I still remember when the Packers signed an "old, over-the-hill" Reggie White to an utterly jaw-dropping 4 year, $17 million contract.... and people were aghast. Shocking! Can you imagine??? How can any human being be worth SEVENTEEN MILLION DOLLARS?????

LOL.

The going rate is the going rate. It's not Armageddon.

I refuse to be the old fart who always "remembers when you could buy a hamburger for a quarter."

Thegreatreynoldo's picture

To hell with the hamburgers! When I was an undergrad in college, a bar that was just a 3-minute walk away sold a pitcher of beer for 75 cents and 90 cents for Michelob. I was making $3.35/hour. Do the math - that's what I call excellent resource allocation. Good times, from what I can remember.

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