The rest of the story - Brady's contract

[Miguel]

While the Boston sports media likes to tell us that the CBA (30% rule, fully guaranteed money) may be preventing the Patriots and Brady from reaching an extension, they have failed to tell us about these three loopholes
1.) completion bonus
AdamJT13: A loophole around the NFL's 30 Percent Rule
Uncapped year forcing New Orleans Saints, agents to get creative with contracts | NOLA.com
2.) supersede signing bonus
How 49ers circumvented the 30-percent rule - NFL - Yahoo! Sports
FOOTBALL OUTSIDERS: Innovative Statistics, Intelligent Analysis | Under The Cap: The 30-Percent Rule
3.) a team can take up to the life of the signing bonus proration to hand over the cash to the player. That is, if Player A signs a five-year deal on 7/15/2010 his team has until the end of the 2014 season to hand over all of the signing bonus money. Example when Tom Brady signed his extension in 2005 he got a $14.5 million signing bonus. That bonus was made in 3 separate payments - " $5 million - May 4, 2005; $5 million - July 15, 2005; $4.5 million March 31, 2006. The entire $14.5 million was prorated over the 2005 season even though Brady did not get all of the money in 2005.

We have been hearing what may not be possible. Here is what is possible.

Did you know that the Patriots could pay Brady a signing bonus AND
a 2010 salary of $9.2 million
a 2011 salary of $16.64 million
a 2012 salary of $19.76 million and still be compliant with the 30% rule?

By no means I am suggesting that the Patriots should offer Brady such a deal all I am saying that it is possible that they could. And that media has for some reason has chosen not to report on that very real possibility.

 

[Rob0729]

In fairness, Mike Reiss has said that the 30% rule restricting a deal getting done has been overblown.

 

[mgteich]

Thank you Miguel. I've gotten very tired of the misinformation posted in the media and on this board regarding the team's supposed inability to execute a contract extension under current rules. The team has choices to make. Brady has choices to make. And fans also have choices. Fans can choose to accept the absolute nonsense that the patriots cannot sign Brady to a lucrative deal because of CBA constraints.

 

[ctpatsfan77]

Thank you Miguel. I've gotten very tired of the misinformation posted in the media and on this board regarding the team's supposed inability to execute a contract extension under current rules. The team has choices to make. Brady has choices to make. And fans also have choices. Fans can choose to accept the absolute nonsense that the patriots cannot sign Brady to a lucrative deal because of CBA constraints.

Personally, I think that it has as much to do with the question of what the new CBA might do to the salary cap (supposedly the owners want to cut it by about one-sixth) as with any current restrictions.

 

[mgteich]

More BS. This supposed cut in future salries has not affected other teams. And just BTW, this is nothing but propoganda. We can look when the new CBA is signed, but there is no way that total salaries will be cut by 1/6. And just BTW, no one is suggesting that, no matter what nonsense you have read.

And why is it that only a very few oqwners and contracts are affected by this dire prediction? And why is it that the rookies seem to be paid 8-10% MORE than last year, even though the salary cap is supposedly going down and there will certainly be a rookie cap?

The reality is that no one knows how the new CBA will read. I would note that the Krafts know better than most. They are simply making business decisions as they always do.

Personally, I think that it has as much to do with the question of what the new CBA might do to the salary cap (supposedly the owners want to cut it by about one-sixth) as with any current restrictions.

 

[ctpatsfan77]

The reality is that no one knows how the new CBA will read. I would note that the Krafts know better than most. They are simply making business decisions as they always do.

Not to be facetious, but if (A) both sides allegedly want to get a deal done, and (B) the CBA isn't a barrier to getting it done, why hasn't it happened yet?

And, to compare apples to apples, how many established players looking at contracts with AAVs of $15M+ have been signed this year?

Finally, the existence of a future rookie cap would have no necessary effect on this year's signings (since, presumably, the new rookie wage scale would be "imposed from above").

 

[mgteich]

Both sides almost always WANT to get a deal done a year before the contract ends. The issues are almost always about guaranteed money and structure of contract (future bonuses, injury reduction and length of contract). This year reduction due to a lockout is also an issue.

I have no doubt that Belichick's folks and Brady's folks both have contracts that they would sign in a heartbeat. The question is how close to one another these positions are.

Not to be facetious, but if (A) both sides allegedly want to get a deal done, and (B) the CBA isn't a barrier to getting it done, why hasn't it happened yet?

And, to compare apples to apples, how many established players looking at contracts with AAVs of $15M+ have been signed this year?

Finally, the existence of a future rookie cap would have no necessary effect on this year's signings (since, presumably, the new rookie wage scale would be "imposed from above").

 

[PatsWickedPissah]

We have been hearing what may not be possible. Here is what is possible.

Did you know that the Patriots could pay Brady a signing bonus AND
a 2010 salary of $9.2 million
a 2011 salary of $16.64 million
a 2012 salary of $19.76 million and still be compliant with the 30% rule?

By no means I am suggesting that the Patriots should offer Brady such a deal all I am saying that it is possible that they could. And that media has for some reason has chosen not to report on that very real possibility.

A question from someone with limited understanding of the financial rules...Is it that the Pats can't simply jack up Brady's 2010 salary and bonus as a 1st wave of a longer term agreement in principal because they wouldn't be allowed by rules to do a phase II 12 months later? In other words it all needs to be done once?

 

[PatsFanSince74]

...

We have been hearing what may not be possible. Here is what is possible.

Did you know that the Patriots could pay Brady a signing bonus AND
a 2010 salary of $9.2 million
a 2011 salary of $16.64 million
a 2012 salary of $19.76 million and still be compliant with the 30% rule?

By no means I am suggesting that the Patriots should offer Brady such a deal all I am saying that it is possible that they could. And that media has for some reason has chosen not to report on that very real possibility.

Thanks, as always, Miguel.

I guess, to be honest, if the numbers and rules are as clear as you make them out to be (and I've never known you to be wrong on a substantive question), then it does change my perception of the situation. If there is a deal there to be done along those lines with a large signing bonus and guarantees, then I don't understand why it hasn't been done in Brady's case.

I can't believe that the Krafts would risk alienating the guy who, along with Bill Belichick, has done more than anyone else to build their Franchise into a billion dollar asset. I now think Tommy should have a contract before Training Camp.

 

[MoLewisrocks]

Thanks, as always, Miguel.

I guess, to be honest, if the numbers and rules are as clear as you make them out to be (and I've never known you to be wrong on a substantive question), then it does change my perception of the situation. If there is a deal there to be done along those lines with a large signing bonus and guarantees, then I don't understand why it hasn't been done in Brady's case.

I can't believe that the Krafts would risk alienating the guy who, along with Bill Belichick, has done more than anyone else to build their Franchise into a billion dollar asset. I now think Tommy should have a contract before Training Camp.

The Patriots have already committed to over $25M in signing bonus this season and likely have or had another $15M or so earmarked for Mankins. $40M... Have we ever spent that much on bonuses in a season, let alone potentially double that to get a 4th deal done??

As Miguel said, he is not recommending that scenario he laid out. One reason being those salaries are not guaranteed and they can't be under an expiring CBA except implicitly, so they are essentially meaningless - unless backed up not by a smaller signing bonus but one sufficient to guarantee he ever sees them. Against just a $25M signing bonus (which would still require $65M in cash over cap spending on the eve of a lockout reportedly fueled by player costs dramatically outstripping operating income) his 2012 cap hit would be $25M, while his dead cap would be $15M. A $10M cap savings if he's traded... I can hear the Hoyer/Robinson camp battle cries already. Tommy is many things, stupid isn't one of them.

Reiss proposed the one year extension. Trouble with that is it can't be revisited for 12 months so it could potentially hamstring them early in 2011 depending on the cap and it postpones Tom's desire for long term security for another season (or two if there is a lockout and contracts toll) by which time he could be 35 and have diminished leverage and perhaps looking down the barrel of a couple of tags - one of which could signal sayonara.

One of the reasons we find ourselves in this position is the owners decided back in 2006 that a bad deal was better than no deal. I don't think Kraft wants to make the same mistake with his franchise QB. And frankly I don't think his franchise QB wants to settle for that either or potentially hamstring his legacy in the alternative.

I don't know why it's so difficult given all we now know to not simply take both sides at their word that it's complicated, they want to do a deal that is fair to both sides, and they thus far haven't yet been able to formulate one in this equally uncertain though painfully constrained environment. Few teams have entertained long term, top dollar EXTENSIONS for that reason. New deals are not structurally constricted though fewer of them were done this season in part because elite UFA's were in short supply. We actually signed one of them after tagging him... We tried to sign another before he totally lost his mind.

Manning may be making $9M more this year, but they are both in the same boat as are their franchises come 2011. The owners will NEVER give up the franchise tag, let alone at a time when entering a new CBA a plethora of stars (thanks to the RFA rules of 2010) who didn't get their deals this year either will likely all become UFA. Some guys don't implode over the insult of exclusive tagging... Manning is familiar with being exclusive tagged pending a deal when he would have been a UFA back in 2004. It worked out so well no one other than Polian even remembers how well... Manning technically risked life and limb without a whimper and played out his final rookie season with $100M+ on the line and the world as we knew it didn't come to an end. Two weeks after being tagged they got his 9 year $127M deal that voids to 7 years $98M when the 2011 or next league year commences hammered out. That deal came with a $34.5M signing bonus and implicitly guaranteed he'd see more than half of it...

He and Tom are both eventually going to get deals that approach if not exceed $100M over 6 and they are going to want to be implicitly guaranteed they see more than half of that in the first three years. It's next to impossible to do that deal under the present constrictions without risking potential inflexibility going forward that could cost each team budding stars or core players in the process.

If I had to bet the house today on one NFL certainty it would be that barring wanting to play badly into their dotage neither Manning nor Brady will ever wear another uniform beyond the one they were drafted to wear. Even if we get to 2011 and they aren't yet signed to their until retirement deals.

 

[bigfandan]

Good points Miguel.
Also don't discount the possibility of contract restructuring afterwards in case of unexpected new CBA constraints; Brady has repeatedly restructured his contract to help out Pats in a pinch.

The situation has more to do with dollar figures.

While the Boston sports media likes to tell us that the CBA (30% rule, fully guaranteed money) may be preventing the Patriots and Brady from reaching an extension, they have failed to tell us about these three loopholes
1.) completion bonus
AdamJT13: A loophole around the NFL's 30 Percent Rule
Uncapped year forcing New Orleans Saints, agents to get creative with contracts | NOLA.com
2.) supersede signing bonus
How 49ers circumvented the 30-percent rule - NFL - Yahoo! Sports
FOOTBALL OUTSIDERS: Innovative Statistics, Intelligent Analysis | Under The Cap: The 30-Percent Rule
3.) a team can take up to the life of the signing bonus proration to hand over the cash to the player. That is, if Player A signs a five-year deal on 7/15/2010 his team has until the end of the 2014 season to hand over all of the signing bonus money. Example when Tom Brady signed his extension in 2005 he got a $14.5 million signing bonus. That bonus was made in 3 separate payments - " $5 million - May 4, 2005; $5 million - July 15, 2005; $4.5 million March 31, 2006. The entire $14.5 million was prorated over the 2005 season even though Brady did not get all of the money in 2005.

We have been hearing what may not be possible. Here is what is possible.

Did you know that the Patriots could pay Brady a signing bonus AND
a 2010 salary of $9.2 million
a 2011 salary of $16.64 million
a 2012 salary of $19.76 million and still be compliant with the 30% rule?

By no means I am suggesting that the Patriots should offer Brady such a deal all I am saying that it is possible that they could. And that media has for some reason has chosen not to report on that very real possibility.

 

[Miguel]

A question from someone with limited understanding of the financial rules...Is it that the Pats can't simply jack up Brady's 2010 salary and bonus as a 1st wave of a longer term agreement in principal because they wouldn't be allowed by rules to do a phase II 12 months later? In other words it all needs to be done once?

It does not need to done at once because the 12 month rule is about two deals that increase a player's salary cap number. See Seymour in August, 2005 and April 2006.

From my footnotes on Seymour's contract
"August 3, 2005 update - Mike Felger of the Boston Herald reported that "Seymour will receive a one-year bump in pay. The raise will take Seymour's 2005 base salary from $2.87 million to the $4 million range."

August 28, 2005 update - Nick Cafardo of the Boston Globe reported that "the Patriots basically tore up Seymour's old contract and gave him a deal that includes a $1.7 million signing bonus while keeping his salary at $2.8 million for 2005 and $5 million for 2006. Those salaries were enhanced by escalators totaling $5.5 million that Seymour earned in his rookie contract that will be disbursed over the final two years. The signing bonus, for cap purposes, was prorated over two years and added to the remaining proration of his original signing bonus. All told, Seymour's total pay this season will be $4.5 million."

January 16, 2006 update - Mike Reiss reported that Seymour's 2006 cap number is "$7.4 million, not including potential escalators"

March 5, 2006 update - The NFLPA site now shows Seymour's salary as $2,020,000. It used to show the salary as $5,020,000. While I can't explain the decrease, the salary decrease is the only way that John Clayton's 3/2 report that the Patriots are $4 million under their adjusted cap figure could be correct

April 1, 2006 update - A source reported that Seymour's 2006 cap number is $4,420,160, which consists of the $2,020,000 salary, $2,394,000 in signing bonus proration, and $6,160 in offseason workout bonus money.

April 13, 2006 update - Adamjt13 reported on the
PatsFans.Com messageboard - "The "extension" is for only three more years past 2006. Seymour got a renegotiation bonus of $5.34 million, prorated at $1,335,000 per season. He also got a workout bonus of $100,000 in addition to his standard $6,160 workout bonus. His $585,000 base salary, plus his $1,335,000 prorated bonus and $100,000 additional workout bonus add up to $2.02 million -- exactly what his salary would have been, which is why his cap number is the same.Next year, Seymour is due an option bonus of $18.66 million. If the option is not exercised, Seymour will become a free agent in 2008, and his 2007 base salary becomes $19.26 million AND is guaranteed. He has workout bonuses of $106,720 each season from 2007 through 2009.His cap numbers each season will be $4,420,160 in 2006, $8,261,720 in 2007, $8,391,720 in 2008 and $11,346,720 in 2009."


Brady's 2010 salary cap number yesterday is $10,220,000.
The Patriots could increase his salary today by $5.7 million to $9.2 million making Brady's cap number $15,920,000.
In August the Patriots and Brady could agree to an extension that could be compliant with all CBA rules as long as Brady's new 2010 cap number is not more than $15,920,000. Such a deal would probably lower Brady's 2010 salary
and the proration of the new signing bonus would offset the decrease.

I know of no reason why the Patriots can do with Brady now what they did with Seymour

 

[PatsWickedPissah]

It does not need to done at once because the 12 month rule is about two deals that increase a player's salary cap number. See Seymour in August, 2005 and April 2006....

(condensed)

From my footnotes on Seymour's contractBrady's 2010 salary cap number yesterday is $10,220,000.
The Patriots could increase his salary today by $5.7 million to $9.2 million making Brady's cap number $15,920,000.
In August the Patriots and Brady could agree to an extension that could be compliant with all CBA rules as long as Brady's new 2010 cap number is not more than $15,920,000. Such a deal would probably lower Brady's 2010 salary
and the proration of the new signing bonus would offset the decrease.

I know of no reason why the Patriots can [NOT] do with Brady now what they did with Seymour

Very succinct & straightforward. Thanks for taking the time to explain.
I believe you typoed out the 'not'

 

[MoLewisrocks]

Very succinct & straightforward. Thanks for taking the time to explain.
I believe you typoed out the 'not'

Miguel is probably right on the revisiting part which caused much confusion a few years ago because that may be strictly for repeated revisiting for restructure and not extension.

That said, Seymour had two years remaining on his deal and they basically moved forward some of his 6th year compensation into his 5th year. Brady doesn't have any more years or old money to push forward, so to alter his deal at this point would require a contract extension adding a year in order to create a final year around which to restructure a longer term deal in 2011. He isn't doing that just for a minimal current year earnings bump like Seymour did when absent that ensuing unguaranteed year he's in line for an exclusive franchise tag that could be worth $20M+. Contrary to what Cafardo stated, they didn't basically rip up Seymour's old deal and replace it with a new one. They restructured it. Then the following March they extended his deal keeping the final year of his rookie deal as amended because it had to remain with the same cap hit and adding to it 3 years based largely around a guaranteed option bonus which represented almost 2/3rds of the deals value and essentially implicitly guaranteed he'd see his whole deal (somewhere) is something they can't offer Brady in an extension under the expiring CBA.

The best they could affordably offer Tom now is a short term extension that raises his salary this year and pays him a still substantial signing bonus commensurate with the # of years in the extension for which no future salary beyond what reallocation would accommodate could be fully guaranteed (because his wasn't in 2009). Guys like Manning and Brady aren't going to settle for piece meal deals. And they and their agents aren't going to shrug off the potential for loss of leverage down the road...

If they did a deal that would make Brady comfortable short term it would probably have to pay him at least $32M ($16M per) over two years (2010-2011) with more than half of it implicitly guaranteed. So lets say $9M max salary in 2010 and $15M in signing bonus and $8M in 2011 unguaranteed salary. His cap #'s would be $17.5M in 2010 and $15.5M in 2011. Then they want to do another long term deal, although as I said Tom would be a year older and possibly 2 if there is a lockout so the issue may become how long.... It gets added on to the remaining year from the 2010 deal and he still wants at least half his new money up front again so we're back to $40M+ in signing and/or option bonus prorated over years with the remaining year having to accommodate the remaining $7.5M of amortization from the short term deal. Year 2011 or 2012 (whichever is the next league year under what cap we know not) his cap # is $15.5M absent salary. Then as we go on the deal will become unbearably backloaded as the remaining $35M or more in salary with no where to go for conversion relief unless they want to extend potential dummy years into his 40's leaving dead cap for the next generation team to deal with and a potential unhappy parting situation on the horizen piles onto the equation. We call this the Polian someone else can deal with this later method. The Patriots of late have preferred to pay as they go unless they restructure to achieve immediate relief for someone else's deal and hope the player can and will play through his deal and leave of his own voo olition having earned every penny you ever paid him...

I think at the end of the day they just want to wait and do the right long term deal for both sides and not tie themselves up in knots trying to temporarily fit a square peg into what is essentially a round hole at the moment. I said earlier in another thread that I don't doubt they have looked at the option of adding a year and one or both parties has apparently found that option unpalatable at least for the time being.

Believe me, if I though they were trying to deliberately screw Tommy Boy and potentially drive him to want to play in San Francisco so he could end his career being cut by that team like they did to his idol, I would be their most vocal critic. Fear of that was what brought me to this site back in March of 2005. For all the Brady contract angst and they're nuts/cheap he's lucky we ever drafted his ass talk that went on at the time, turns out they had almost effortlessly agreed on the 6/60 parameters of a deal weeks earlier and the only holdup was a procedural/structural tussle which in the end was settled on terms Tom was comfortable with.

 

[Synovia]

More BS. This supposed cut in future salries has not affected other teams. And just BTW, this is nothing but propoganda..

It hasn't? Bill Polian seems to disagree. He's stated several times that Manning won't get his extension till the new CBA is done.

 

[PatsFanSince74]

The Patriots have already committed to over $25M in signing bonus this season and likely have or had another $15M or so earmarked for Mankins. $40M... Have we ever spent that much on bonuses in a season, let alone potentially double that to get a 4th deal done??

...

My knee jerk reaction was, "Wait a minute, since when did Tom Brady become the '4th deal' in an off-season? Shouldn't planning for his needs have been 'Deals 1, 2 and 3' since January?" But, I don't have the ammunition to take you on and there comes a time when I have to say "Uncle."

I simply don't have the bandwidth to dig into and understand all of the constraints on a deal that have been argued by folks here, like yourself, who certainly seem to know a whole lot more about this than do I.

From now on, I'm just going to watch what Brady does. If he comes to terms with the Patriots on a long term basis without a whole lot of discord, I'll assume I was wrong all along to be uneasy. If he doesn't, I'll assume I was right.

 

[eom]

Not to be facetious, but if (A) both sides allegedly want to get a deal done, and (B) the CBA isn't a barrier to getting it done, why hasn't it happened yet?

both sides wanted to get wilfork done, and the cap was no obstacle, so how long did that take?

what's brady's deal going to look like compared to wilfork's?

don't get excited.

 

[Miguel]

Very succinct & straightforward. Thanks for taking the time to explain.
I believe you typoed out the 'not'

You are welcome. PWP, I did typoed out the not.

 

[plk]

Do you think that Logan Mankins might have some insight into why the Brady deal has not been done?

If Tom Brady thinks or suspects or guesses that Craft lied to Logan Mankins, do you think that it might be contributing to his unhappiness?