What would a fully guaranteed contract look like?

Updated Monday 3/12/18  Since there seems to be more chatter that Cousins will be receiving at least two fully guaranteed deals, I’ll show a some of examples at the $90M mark.

The first one is the evenly split 30/30/30

The second one is a front loaded deal like the Jets would try to offer to entice him to sign there more money up front.

The third one is back loaded (for cap purposes, though the cash is all but evenly split), with a smaller signing bonus and league minimum base salary, which would be more ideal for a team like the Broncos.

ORIGINAL POST

Not that different from a typical contract, but like any other other contract it would depend on the structure.

Some people see the headline 5 years $125 Million and they think the following:

Yes, $125M divided by 5  is $25M per year, your 2nd grade math teacher would be proud. But it doesn’t have to be structured that way. In real estate the cliche is “Location Location Location”, when it comes to the NFL Salary Cap and contracts, it’s “structure structure structure“.

First of all, I’m not sure any player anytime soon will be receiving a 5 year deal that is fully guaranteed. If you shorten the term, to say three years or maybe four, then I could see someone biting the bullet on it. It could be New Orleans & Drew Brees, it could easily be Aaron Rodgers with the Packers, or Matt Ryan and the Falcons. Hell, it might end up being the Vikings/Broncos and Kirk Cousins. Not likely, but it’s not impossible the only way I see that happening in Denver is Broncos GM, John Elway feels a panic to get a deal done with Cousins to vastly upgrade the position.

One concept that can change from player to player is his minimum base salary. The team/player can’t simply say pay me $1.00 as a base salary for year 1. The chart below was part of the CBA agreement in 2011, and years 2011-2017 have been removed since they do not matter at this point. For a guy like Drew Brees the bare minimum he could be paid as a base salary would be $1,015,000, which would mean 17 weekly game checks of $59,705.88.

Andrew Brandt, a former agent and former Packers GM has mentioned that if a contract was fully guaranteed that it would be a) shorter and b) cheaper since the bulk of the risk in the equation shifts to the team.   If a guy goes full Aaron Hernandez or Mike Vick and ends up in jail?  The team is on the hook. If Tom Brady’s contract was fully guaranteed and he sliced off his right pinkie cutting an avocado, the Patriots are on the hook.   It makes sense. I’d rather have 4 years guaranteed at $100M than the 5 year $125M contract Derek Carr signed last year simply because the Raiders would have some wiggle room to walk away from it it doesn’t go so well, so the 5/125M concept might be too high to be a legitimate example.

With that said, here are three simple samples based on 3 years and $25M and using Drew Brees as an example based on his experience level. A guy with lesser years of service, could have a slightly lower base salary inserted, which would then force all the other numbers to be tweaked to reach the $75M total.

Version 1 Simplicity   3 years, $25M each year

This is the version that most people see in the mind when they hear $25M AAV(Average Annual Value) or 3 years $75M.

Version 2 Lower Year 1 Cap Hit

The signing bonus is prorated over the 3 years from a cap perspective. So to create more space in the first year, the team would offer a lower signing bonus paired with a league minimum base salary which creates more savings in year 1.  The funds are then made up with higher base salaries in years 2 & 3. Since it would be a fully guaranteed deal, it’s only a matter of when the player gets paid. Theoretically, they could pay him the $1,015,000 minimum base salary in year 1, and then split the balance over the final two years, but that would not be an ideal way to absorb it. While it would create maximum cap savings in year one, the player would have to be comfortable with receiving very little of the contract early on. The signing bonus is cash paid (usually in one lump sum) and that coupled with he minimum base salary, it still pays the player a good chunk of money in year 1.

Version 3 More of a staggered approach.

As you can see the signing bonus is higher in this one, which pushes the cap hit higher in year 1, but the way it is structured, lowers it in years 2 and 3 from the previous example. According to overthecap.com the Saints have approximately $31M in cap space, so the Saints might view version 2 as the better option of the three.

That is the point that people fail to comprehend (or refuse to), is that  a $25M or $35M annual value doesn’t have to mean $25M or $35M each year unless it’s a 1 year contract. Just as 3 years and $75M doesn’t have to be 25/25/25. Think of how many ways you can break a $100.00 bill:   50/50, 20/20/20/20/20, 50/20/10/10/5/1/1/1/1/1/. You get the point. With these contracts  the scenarios are damn near endless.

In an everyday example, it’s kinda like buying a new car. You can put more $ down, and get a lower monthly payment/less interest paid over time, or you might be strapped for cash, forced to put as little down as possible and pay a bit more over the time it takes you to pay it off, but very rarely if ever will you buy a $25,000.00 car with 5 years of financing and pay exactly $5,000 per year.

If a team wanted to go 4 years $100M but wanted to save cap space in year one, it would be pretty easy to accomplish. With the contract being fully guaranteed it’s only a matter of time that he receives the payments.

In this scenario he’d get 31% in year 1, while from a cap perspective the team is only taking on 8.5% (of the contract) which is where the cap savings comes in.

One thing is for certain, the cap will continue to grow. Eight figure annual growth since 2014, and a conservative 6% annual increase continues that concept.

The hypothetical contract laid out here last month, could be fully guaranteed as well. Same structure, same dollar amounts, etc.  The only thing that would change is that the QB would be guaranteed to receive every dollar.

 

On This Day:
10/28/12

Peyton
Manning facing his hometown team, the New Orleans Saints in what might have
been the final time, authored a pair of 17-7 halves in beating the Saints
34-14.

Manning
finished the night 22/30 for 305 yards and 3 touchdowns.

He
hit Eric Decker with TD passes of 13 and 2 yards while connecting with
Demaryius Thomas from 1 yard out.

http://www.pro-football-reference.com/boxscores/201210280den.htm

I love a good practical joke.

Just like Peyton Manning, dancing to Rocky Top, another veteran quarterback is trying to keep things loose during training camp.

As the story goes, New Orleans Saints coach Sean Payton was complaining about the sponsorship patches attached to the Saints practice jerseys. They are sponsored by Chevron who graciously donated 0.0013 gallons of gas for this reference, in other words, 7.00 worth of gas(hey you have to laugh at high gas prices when you can’t do a thing about them).  So the next morning, Payton and the other coaches enter the coaches locker room to find Chevron(another .0013 gallons) patches attached to their Saints polo shirts courtesy of quarterback Drew Brees.

Not to be outdone, coach Payton had someone on the staff alter a Chevron(we are up to .0039 gallons) patch to say Rogaine as a slight knock to Brees’ hairline that plays the hide roll in a game of hide & seek more times than not..  Payton was able to get Brees’ attention as he was getting dressed and and slipped his jersey/pads on without noticing the change. He eventually caught on in the middle of practice. Training camp is for working, learning and growth but it is nice to see these veterans keep things loose as well.  Locker-room shenanigans like this is one of the things I miss most about playing  football (we had some fun).

Brees later tweeted the picture shown above with the caption:

What’s wrong with this picture?! Sean Payton got me this morning.

Adrian Peterson is likely the best back in the game(maybe). But, he’s not even the best player in his division. That would be Mr. Calvin Johnson or Mr. Aaron Rodgers.

So Peterson if I am being generous might be top 5. More likely top 10 and easily top 15.

He should be thankful the media GAVE him an MVP and learn to be a bit humble.

Tom Brady top 5 QB?

Um…. Yes

I’d put him at # 2 behind Manning, and still ahead of Brees, Eli, Rodgers and Rivers, Big Ben, Ryan, Stafford, Romo etc.  

Yeah it is the slow time of the year for the NFL, so ESPN and Profootballtalk will come up with their fair share of debatable topics, but this one is absurd. 

Mike Florio, of Profootballtalk is usually battling Peter King, Bill Simmons, Skip Bayless and a few others  for a front row seat on Brady’s pecker, but for some reason he’s stuck on idiotic comments like this:

So, basically, it’s wins and losses.  For a guy who hasn’t won the ultimate game in a decade, it’s hard to argue he’s still as good as the guy who won three in four years.  But the arguing over whether he’s as good as he used to be will continue for as long as Brady keeps playing, and beyond.

Truth be told, the Tom Brady that won the 3 Super Bowls wasn’t much better than Russel Wilson. That’s not a knock to either guy, but Brady from 2005-present day, is a far better QB than he was early in his career. Yet, Brady 2001-2004 has 3 rings, and Brady from 2005-today hasn’t won one. He’s exponentially better now than he ever was when he won a ring.  

With that said, he was an Eli Manning/David Tyree escape/throw/catch from winning ring #4 vs. the Giants, and then again with the Giants he was a bad throw away from sealing ring #4 before Manning threw a dagger to Manningham and took the Giants down the field to score.  

Some people(mostly Brady/Patriots fans that who know hate Wes Welker for Catching with the enemy) put the blame on Wes, but Welker made a helluva move just to make contact with the  errant pass. Since he’s made outstanding catches in the past, many feel he should’ve come down with it, and maybe he should have, but an on target pass would have helped with that.

It’s like the Gold Glove firstbaseman who routinely snags wide/high throws or digs them out of the dirt but with 2 outs in the bottom of the 9th he fails to do so, it’s going in the books as E-6, or E-5. Well that throw was more E-12 than E-83.

So while Florio simply has his controversy panties and has taken a shot or two at Tom Brady that he usually reserves for his hated Peyton Manning, it’s still absurd to say Brady isn’t in the top 5. 

Who’s going to replace him?  Roethlisberger? Eli? Stafford? Foles? 

Would you put one of the overrated young QB’s in the top 5 over Brady? Rusty Wilson? No. Andrew Luck? Not a chance? RGIII? Nope. Coloringbook Kaeperinick? No. Hail-mary Flacco?  Not a chance.

It’s all about stirring up controversy/interest. Then again, I don’t know one single person that visits profootballtalk for Mike Florio’s witless editorials, but I’ll give credit where credit is due. He’s good at copy and pasting.

He’s damn good at copy and pasting.