Tom Brady Restructures Contract - shifts $24 million

[hwc]

I think it's unlikely that Tom Brady will be the starting QB for the New England Patriots beyond the 2017 season when he will be 40 years old.

Nolan Ryan didn't get pounded to the ground 15 times a game. In the all-pass-all-the-time National Football League, the QB has to be able to stand in and take a pounding after releasing the ball. Flinching ... throwing while falling back to avoid the hit just doesn't work. It's not the arm that goes. It's not the legs that go. It the folly of youth that allows a gunslinger QB to stand in the pocket and get jacked up that goes.

I do think it is increasingly likely that Brady makes it to the end of the current contract. He's certainly playing well enough to be pencilled in as the starter in 2015.

The end will come when he gets injured or when Belichick pulls him aside one spring and says, "It's time...."

 

[RobertWeathers]

Although it's clearly useful (and necessary) to point out all the ways that this restructure could impact things like releasing/trading TB as well as theorize about all the reasons this may have been done, I believe the answer is simple and obvious - the Patriots wanted the flexibility of having $24 million of cash in their pocket and were happy to give Tom Brady an extra million for the next 3 years (on his well-below market contract) in order to have access to this money.

On a 36 month term, the break-even on debt servicing a $24m note is 7.81%. My guess is Bob couldn't get a lower rate and asked Brady rework the deal

I'm surprised by how many people here keep looking beyond the obvious and deluding themselves that there's got to be more going on. BB has made clear for over a decade that there's no QB in the NFL that he'd rather have than Tom Brady. Tom Brady has made clear that he loves playing football and that he loves playing for BB and Robert Kraft. Finally, TB's work ethic and fanatical dedication to maintaining his skills so that he can play football well into his forties have now been nationally documented - and yet seem to be ignored by many posters here.

There is no way that TB currently plans to be done playing football at the end of the 2017 season - he's made that crystal clear. And yet many seem to believe that this is the plan for either TB or for the Patriots. Now it could work out that way but that is not the plan.

Well, I think there is a little intrigue here. Brady has said that he intends on playing as long as he feels that he is able to do so. By the nature of the deal, while the primary motivation is to help the team, the structure does allow (a little) for him to control his destiny (both playing and where he can go) and in the same turn help the Pats make the potential separation/transition more financially amenable for the team. It's pretty high-level, strategic stuff actually. Brady has some very smart people in his camp who understand not only his financial market very well, but his leverage with the team and value to them. They also find a delicate balance of making a ton of money for their client but also ensuring his legacy and professional goals are preserved in their business transactions. In the 13 years TB has been here, when it comes to contracts and PR, there hasn't been a single PR misstep. Not one. Masterful.

Nolan Ryan pitched at a high (dominating?) level until he was 46. Tom Brady is using these same principles with even more dedication to his athletic skills than Nolan Ryan used. Apart from injury, I'd be amazed if Tom Brady was not playing at a high level in 2018 for the Patriots. And I'm looking forward to it.

Not sure I'd compare Ryan to TB but I understand your point. I liken TB more to Jerry Rice. 100% all the time. No quit. No BS. Full tilt. No a single amount of energy is wasted and you dedicate every last bit of talent you have to your craft and to winning.

 

[RobertWeathers]

Nolan Ryan didn't get pounded to the ground 15 times a game.

Nolan dished it out. Love Nolan Ryan. Here's a cool excerpt from an article. Football and baseball collide.

When Ventura charged toward the mound, he slowed down just enough to run into a Ryan headlock. Nolan got in four quick right hands on the top of Ventura's head. His fifth and final punch got Ventura square in the face.

Both benches emptied, and the main combatants disappeared under the surge of humanity. Ventura eventually emerged unscathed, but Ryan remained trapped beneath the pile and was nearly unconscious when help came from an unexpected quarter.

"All I remember is that I couldn't breathe," says Ryan. "I thought I was going to black out and die, when all of a sudden I see two big arms tossing bodies off of me. It was [Chicago's] Bo Jackson. He had come to my rescue, and I’m awful glad he did, because I was about to pass out. I called him that night and thanked him."

http://www.thepostgame.com/blog/men...rob-goldman-rangers-white-sox-ventura-grebeck

The end will come when he gets injured or when Belichick pulls him aside one spring and says, "It's time...."

A decision will be made- by someone way before TC.

 

[Miguel]

Possible minor reasons for Patriots to do this - did not want precedent of a veteran having a fully guaranteed contract. Wanted to increase cash spending for 2015/2016 by increasing Brady's salaries. There is a 89% cash spending requirement for the 4 year period (2013-2016)

 

[farn]

All about availbale cash. TB obviously feels comfortable with his standing within the team and the team needs to spend that 24M rather than have it set aside.

We'll see what transpires this offseason. I for one hope to see all that cash flow towards the defensive backfield.

 

[Ivan]

I think it's unlikely that Tom Brady will be the starting QB for the New England Patriots beyond the 2017 season when he will be 40 years old.

You told us he wouldn't be the starter after this season, you even suggested he would brcome the back up.

You have zero credibility.

 

[Ivan]

They freed up 24 million they would have had to set aside and have set the table for a new deal with Brady this coming season. He is a top three MVP candidate once again, the endless talk of his demise is just that..... Talk.

 

[Spiral]

From reading some of the posts, there seems to be an elephant in the room: the Krafts may be having cash flow problems.

Just because you're the owner of a successful NFL franchise doesn't make you immune from money troubles. No one outside their family really knows the status of all of their finances. However, the deal with Brady seems like an unconventional (and expensive) way to free up cash. From a financial perspective the only benefit I can see is that a deal like this doesn't have to be carried on their balance sheet. While I don't think this is alarming, it's certainly worth noting.

 

[Brewskies]

Yea and he would become an unrestricted free agent.

Then sign with the 49ers for big money and play for Josh McDaniels in his home town.

 

[Oswlek]

However, the deal with Brady seems like an unconventional (and expensive)

Expensive?

 

[goheels22002]

All about availbale cash. TB obviously feels comfortable with his standing within the team and the team needs to spend that 24M rather than have it set aside.

We'll see what transpires this offseason. I for one hope to see all that cash flow towards the defensive backfield.

Both the player and the team benefit in some way from having greater flexibility down the road, but I do not see how this frees up any money to take care of pending free agents or restructured deals like Revis.

It was a mutual decision to make it easier to trade Brady. That is a clear result of this technical restructuring. His cap number went up slightly, not down. His new team would take on his contract and anything they might add, but none of the performance guarantees. The injury guarantees are insured.

 

[Spiral]

Expensive?

Given the amount and the term, I'd say yes, compared with other credit facilities to which the Krafts probably have access.

 

[Jackson 2]

From reading some of the posts, there seems to be an elephant in the room: the Krafts may be having cash flow problems.

Just because you're the owner of a successful NFL franchise doesn't make you immune from money troubles. No one outside their family really knows the status of all of their finances. However, the deal with Brady seems like an unconventional (and expensive) way to free up cash. From a financial perspective the only benefit I can see is that a deal like this doesn't have to be carried on their balance sheet. While I don't think this is alarming, it's certainly worth noting.

Krafts, cash flow problems... Jesus that's a good one...

 

[SalemPats]

This was an interesting move by all parties. Another theory is that we sign Revis and then renegotiate Brady again with a large signing bonus (re-signng). But, i could be way off base because my knowledge of the cap is pretty weak.

 

[dales804]

From reading some of the posts, there seems to be an elephant in the room: the Krafts may be having cash flow problems.

Just because you're the owner of a successful NFL franchise doesn't make you immune from money troubles. No one outside their family really knows the status of all of their finances. However, the deal with Brady seems like an unconventional (and expensive) way to free up cash. From a financial perspective the only benefit I can see is that a deal like this doesn't have to be carried on their balance sheet. While I don't think this is alarming, it's certainly worth noting.

They own more than just the Patriots. Kraft's net worth is $4B.

 

[Oswlek]

Given the amount and the term, I'd say yes, compared with other credit facilities to which the Krafts probably have access.

Negligible difference, and wholly irrelevant when you consider who they are paying it to.

 

[Ivan]

This was an interesting move by all parties. Another theory is that we sign Revis and then renegotiate Brady again with a large signing bonus (re-signng). But, i could be way off base because my knowledge of the cap is pretty weak.

If they sign Revis and McCourty they are probably looking at a minimum of 30-40 million up front, combine that with setting aside 24 in escrow and that's over 50 million before they start dealing with all of the other contacts. Brady is just making life easier for them IMO, and he will see more than that by the time all the moves are done. Ultimately I think people are reading way more into this than need be. And the haters are just going to try and twist it to suggest the Patriots are going to get rid of one of the two or three best player's in the league, which is epically stupid, but then again so are they.

 

[Ring 6]

They own more than just the Patriots. Kraft's net worth is $4B.

They don't make Patriot decisions based upon their net worth or the health of other companies they own.

I think its pretty obvious what happened here. Kraft needed to put 24 million aside, and would rather use it to operate. They talked and I'm sure Brady got a handshake agreement that he isn't being cut any time soon, so they threw him a few bucks to back up the handshake and he changed his deal so $24 million doesn't sit around for no reason.

 

[PP2]

so they threw him a few bucks to back up the handshake and he changed his deal so $24 million doesn't sit around for no reason.

That's all I see it as: simply an efficient business decision.

As I previously said, one doesn't get to be a billionaire by spending foolishly. Kraft's party saw an efficient way to free up some quick cash by not having to put it into escrow, per the old contract. And they tossed Brady a bone; but exactly what bone, we likely will never know.

 

[Miguel]

If they sign Revis and McCourty they are probably looking at a minimum of 30-40 million up front, combine that with setting aside 24 in escrow and that's over 50 million before they start dealing with all of the other contacts.

Problem with this theory is that teams often pay out their signing bonuses in installments. Examples - Brady's 2005 $14.5 million signing bonus paid out in 3 installments. 2010 16 signing bonus paid in 2 two. 2013 30 million signing bonus paid in 4 installments, last $5 million due on 2/15/2015.