Patriots and Gronk agree to 6year/$54 Million Contract

[Deus Irae]

OK, but given a long post in which he states the situation clearly and properly to begin with then later re-summarizes in a confusing way, a blanket response of "No" to the whole thing isn't that helpful!

Anyway...this looks like a smart deal that gives meaningful protection to both sides. It also continues a very good string of extending top home-grown talent.

As I noted earlier, there's a significance to the difference between an extension and a new contract. And I didn't offer a blanket response of "No". I gave a full sentence explanation of what was done. Given that I'd earlier posted "Perhaps one day Breer will grasp that "average per year" doesn't apply the same with an extension as it does with a new deal. " and "The Patriots have extra money this year. They just used some of it to lock Gronk in while lowering what his cap hit down the road might otherwise have been.", I'd say that my response was helpful, indeed, to someone actually looking for something helpful.

Lastly, yes, it does look like a deal that gives both sides some protections, some financial 'upside' and some financial 'risk', so it would seem to be a good, or at least potentially good, deal for both sides, given what we know so far.

 

[MoLewisrocks]

Had you simply read the bloody title of the link you posted, you might have figure it out. Instead, you rambled on and on, and made a stupid, and incorrect, comment about me being using contrarian semantics. Here, let me repeat that title for you, in bold.....

Gronkowski inks six-year, $54 million extension

Ken wrote:



Now, you should be able to figure out why Ken was wrong from those two lines.

As Miguel used to say the gold standard for contracts is first three year average (provided sufficient bonus implicitly guarantees the player sees that due to dead cap implications) or the fully guaranteed money. Gronk got $13M fully guaranteed, and another $5M has a rolling guarantee. So I guess we should call the new deal a 4 year $4.5M AAV deal with an option...

Average or total new money can be spun, but the fact is absent guarantees a player seldom sees it. He gets more or less. AAV of the entire contract puts the player's cost in perspective. If he's here 6 years he will earn $38M or $6.35M per as an average. If he's here all 8 years he will have averaged $6.8M. If he's only here for 4 years he will have averaged $4.5M per. He will never average $9M per unless they void the option and opt to do another extension, in which case he will probably cost and average a lot more...or less. The more doesn't sound very Patriotic. They will have all the leverage.

 

[Brady'sButtBoy]

I can't see the Pats committing $15-$17m/yr to the TE position, no way. But that's likely what it will take to keep both our star TE's.

Gronk gets $9m/yr and why would Hernadez sign for less than $6-7m/yr? He could easily get that if he goes to FA. Sadly, I think he's a goner after two years, maybe 3 if they franchise him which I doubt because he'd probably get paid more than Gronk for one year under the tag and that may not go over too well with Gronko. Especially if Gronk continues his assault on the record books.

 

[Deus Irae]

As Miguel used to say the gold standard for contracts is first three year average (provided sufficient bonus implicitly guarantees the player sees that due to dead cap implications) or the fully guaranteed money. Gronk got $13M fully guaranteed, and another $5M has a rolling guarantee. So I guess we should call the new deal a 4 year $4.5M AAV deal with an option...

Average or total new money can be spun, but the fact is absent guarantees a player seldom sees it. He gets more or less. AAV of the entire contract puts the player's cost in perspective. If he's here 6 years he will earn $38M or $6.35M per as an average. If he's here all 8 years he will have averaged $6.8M. If he's only here for 4 years he will have averaged $4.5M per. He will never average $9M per unless they void the option and opt to do another extension, in which case he will probably cost and average a lot more...or less. The more doesn't sound very Patriotic. They will have all the leverage.

Let me try to walk you through this one last time:

Gronk reportedly has signed a 6 year, $54 million extension that is partially guaranteed. That's what he signed. Ken wrote something different that was incorrect (likely because he was a bit sloppy with his wording, but nonetheless incorrect and potentially misleading to others who read his post). As I've already noted in my reply to Patchick, I'd earlier made posts about the team being able to use up cap space from this year, etc....

I'm not being "contrarian", and I'm not talking semantics. The deal is what the deal is. The application of the deal, and its implications, are not the same thing.

 

[mgteich]

I get it, but I am not talking about accounting games, only new cash money.

Gronkowski will get a check for $8M now. He is guaranteed $18.23M, call it $16M of new money over the next four years. For Gronk, we will receive $18.23 over four years, all guaranteed. This is a great deal for everyone. Effectively, Gronk receives guaranteed franchise money for the 2 new years.

Then comes the great deal for the pats. In order for Gronk to get all his guaranteed up front money, he had to agree to a patriot option on a four year deal for $38M ($10M bonus plus $28M in salary)
===============================

MY BOTTOM LINE
What if I told you that there was ZERO likelihood of Gronkowski playing this year for $540K and next year for $630K, that this was total fiction. Would that change your analysis? I would not doubt for one second that Kraft assured Gronk that something would be done and that Gronk accepted that.

Keeping the rookie contract intact is the face saving game, the accounting game and perhaps even the cap game. It may be even necessary inorder to get the 8 year commitment. The reality is the amounts that Gronk will receive from 2012-2015 (all guaranteed except if the patriots want to fire him in 2015) and the patriot option for 2016-2019.

Time of payment is part of the contract. It's a 6 year extension averaging $9 million dollars per, partially guaranteed. Accounting games will allow the money to be spread out in a helpful manner to the Patriots, and will apparently allow them to use up some of the excess "cap" available for this season rather than using it all in future years, but the deal is still the deal.

 

[TyronePoole]

If he's almost certainly going to hold out in the next two years in the absence of this extension and guaranteed money I think it's perfectly reasonable to think of it as an 8 year contract rather than a 6 year extension.

 

[DaBruinz]

That would seem fairly reasonable. $9M/year makes Gronk the highest paid TE in the NFL by a wide margin, and it rips up 2 years of his rookie deal. But it gives the Pats long term security and it's probably well below what Gronk could get on the open market (probably Mario Williams kind of money).

It's a contract EXTENSION, not a new contract.

He get's a new SB of $8 million now and nothing more until 2014. And there is an option bonus $10 million in 2016 for the final 3 years of the deal. Should the Pats pay that, then Gronk's 2018 and 2019 salaries would be $8M and $9M respectively.

Doing the math, the Option bonus and 2018/2019 salaries account for $27 million of the $54 million extension. The 2017 salary will probably be around 1.25 million. And the $8million SB he gets leave around $17 million over the 2014-2016 seasons. Or about $5.75 million/yr. That is a STEAL considering the franchise tag NOW is 5.4 million. In 3 years, it will be more than that..

 

[Deus Irae]

I get it, but I am not talking about accounting games, only new cash money....

Mg, in the NFL, the accounting rules involving the cap mean that, usually, there's a difference between what's signed and what the impact of that signing will be. In this case, the Patriots gained the ability to lower future costs by taking some of those costs on in a year where they've got the extra space to do so, and they've eliminated any real possibility of acrimony with their best TE for the next 4 seasons, and they did it by signing a deal that pays the player very well, but does not actually improve what was the original deal, meaning they've not had to actually up the ante of his rookie contract. I get it, and I've got no beef with that.

My issue with Ken's post was not the entirety of his post (although I didn't buy into his Hernandez stuff, I didn't comment on it). It was just about his statement of what was actually signed.

 

[Joker]

scintillating...on a day I should be ecstatic that the Patriots signed a player I love to a new deal, I open this thread and find a nuclear war over contract terminology....does anyone ever get any joy out of the simple facts anymore, or does every deal have to be parsed and pored over and all warts, real or imagined, exposed in screeds that lead to the Migraine Mall..?

I'm very happy he's signed a new deal. He must be happy because he signed it.This looming contract issue is OVER. This is a good thing...this year...next year...the year after...what's not to like?

 

[DaBruinz]

So IF this is an extension, we have him the next 8 years for roughly $56M correct? So this year and next year's cap #'s can be adjusted towards that ~7M # to lessen the future cap hits? Or would they keep his # around 1M and then start the bigger hits in 2013?

The $8million signing bonus get's pro-rated as soon as they pay it. Meaning this year. So, that's an additional $1.6 million added to Gronk's cap number. So he goes from about $1.01M to about $2.62 million.

 

[MoLewisrocks]

I can't see the Pats committing $15-$17m/yr to the TE position, no way. But that's likely what it will take to keep both our star TE's.

Gronk gets $9m/yr and why would Hernadez sign for less than $6-7m/yr? He could easily get that if he goes to FA. Sadly, I think he's a goner after two years, maybe 3 if they franchise him which I doubt because he'd probably get paid more than Gronk for one year under the tag and that may not go over too well with Gronko. Especially if Gronk continues his assault on the record books.

The way you are looking at it is the problem. If they can sign each to an extension that mitigates cap hits, they'd be happy as clams to have those average less than the cost of one elite WR like Megatron over the course of the deals. And if they signed Hernandez to a 6 year $40M extension today they'd be in range of Megatron ($12M per for the pair vs. one elite WR). They may or may not choose to go that route. They probably would like to get some distance between the deals. Maybe Hernandez got an early offer too and his agent (Dunn, Welker's agent) didn't like their numbers while Rosenhaus did. Maybe the jury is still out on Hernandez to some extent. Or maybe they are happy to roll the dice on one being a tag to sign or tag to trade in three years - even if to sign him the means a full value FA type deal and to trade him means you're looking for a replacement. Maybe two TE's will be passe by then...and they'll be looking for something else.

It's sad folks are always sad about something here.

 

[TyronePoole]

Mg, in the NFL, the accounting rules involving the cap mean that, usually, there's a difference between what's signed and what the impact of that signing will be. In this case, the Patriots gained the ability to lower future costs by taking some of those costs on in a year where they've got the extra space to do so, and they've eliminated any real possibility of acrimony with their best TE for the next 4 seasons, and they did it by signing a deal that pays the player very well, but does not actually improve what was the original deal, meaning they've not had to actually up the ante of his rookie contract. I get it, and I've got no beef with that.

My issue with Ken's post was not the entirety of his post (although I didn't buy into his Hernandez stuff, I didn't comment on it). It was just about his statement of what was actually signed.

He's effectively signing this contract to agree to actually play the next two years though. That's part of his implied offer/terms of acceptance to the Pats.

 

[eom]

I can't see the Pats committing $15-$17m/yr to the TE position, no way. But that's likely what it will take to keep both our star TE's.

Gronk gets $9m/yr and why would Hernadez sign for less than $6-7m/yr? He could easily get that if he goes to FA. Sadly, I think he's a goner after two years, maybe 3 if they franchise him which I doubt because he'd probably get paid more than Gronk for one year under the tag and that may not go over too well with Gronko. Especially if Gronk continues his assault on the record books.

how much would they commit to a te and a wr?

 

[DaBruinz]

More Affordable? No.

Do you mean there's more cap now and they can fit in a big contract for Welker now? Maybe. If he's a priority. I don't think he is.

How pissed off do you think Welker is right now that Gronk got his huge deal and Wes did not?

More Affordable? Not a freaking chance.

Welker MIGHT be pissed off. But only if one is absolutely ignorant and thinks that teams only deal with players one at a time. And only if the Pats pulled every deal off the table and said to Wes, "Sorry, but you can play for the franchise tag and nothing else this year."

The reality is that none of us know where the Pats and Welker stand in their negotiations. My guess is that Gronk's deal has no affect on the Welker contract negotiations since the Pats still have over $10 million in salary cap space they can use.

 

[Deus Irae]

He's effectively signing this contract to agree to actually play the next two years though. That's part of his implied offer/terms of acceptance to the Pats.

No he's not, since he'd already contractually agreed to actually play the next two years for the Patriots, barring a trade, if he played at all, in return for payment.

I don't really see the need for this to be made into an issue. Ken wrote the wrong thing about what was signed. I corrected it, at least to the extent that such a correction can be made based upon current reports. Let's move on.

 

[jason423]

As Miguel used to say the gold standard for contracts is first three year average (provided sufficient bonus implicitly guarantees the player sees that due to dead cap implications) or the fully guaranteed money. Gronk got $13M fully guaranteed, and another $5M has a rolling guarantee. So I guess we should call the new deal a 4 year $4.5M AAV deal with an option...

Average or total new money can be spun, but the fact is absent guarantees a player seldom sees it. He gets more or less. AAV of the entire contract puts the player's cost in perspective. If he's here 6 years he will earn $38M or $6.35M per as an average. If he's here all 8 years he will have averaged $6.8M. If he's only here for 4 years he will have averaged $4.5M per. He will never average $9M per unless they void the option and opt to do another extension, in which case he will probably cost and average a lot more...or less. The more doesn't sound very Patriotic. They will have all the leverage.

The 9 million is a funny money number unless something drastically changes between now and 2015 in regards to the cap that boosts salaries. New England is fully protected to limit this to a 3 year contract. In 2015 the team saves $3.4 million in cap by cutting him before the guarantee kicks in. Now that wont happen if he keeps playing like he did last season, but thats the real meat of the contract right there. That is essentially the big leverage year for New England. Its a fantastic deal for New England if he puts up around 1000 yards a year. Im kind of shocked his agent would even sign such a deal, but I guess being on a 2nd round deal when you can get 13 million locked up is pretty tempting.

 

[DaBruinz]

Gronk until 2019...$56 million ...$18 mill guaranteed
Megatron until 2019 ...$132 million...$60 mill guaranteed

BB/Krafty........nice work

Only $8 million of the contract is guaranteed. The other $10 million is an OPTION bonus that is only guaranteed if the Pats pick up the option after the 2015 season.

 

[Deus Irae]

The 9 million is a funny money number unless something drastically changes between now and 2015 in regards to the cap that boosts salaries. New England is fully protected to limit this to a 3 year contract. In 2015 the team saves $3.4 million in cap by cutting him before the guarantee kicks in. Now that wont happen if he keeps playing like he did last season, but thats the real meat of the contract right there. That is essentially the big leverage year for New England. Its a fantastic deal for New England if he puts up around 1000 yards a year. Im kind of shocked his agent would even sign such a deal, but I guess being on a 2nd round deal when you can get 13 million locked up is pretty tempting.

If Gronk keeps putting up the big numbers, he'll be in a position to pull a Revis.

 

[Leemo]

what a contract that is for the patriots. Sign Hernandez long term too and we are sset, just keep one decent WR every year and fill in with JAGS

We rule

 

[TyronePoole]

No he's not, since he'd already contractually agreed to actually play the next two years for the Patriots, barring a trade, if he played at all, in return for payment.

That contractual agreement is partially unenforceable though and he's already been paid most of it.

Edit - just saw your edit, I just like nitting it up as much as the next guy I guess