Milwaukee Journal Sentinel - Packer Plus
Contract details answer lingering questions
Green Bay — Did the Green Bay Packers sign quarterback Aaron Rodgers to a three-year, $150.85 million contract Tuesday?
Or was it a five-year deal worth $186.5 million?
Or was it a two-year deal worth $101.4 million?
The answer to those three questions is yes.
In constructing a contract that would both satisfy Rodgers’ demand to become the highest-paid player in the National Football League and help the Packers deal with a bloated salary cap, the two sides came up with a unique way of doing both.
In practical terms, the deal is set up to last two or three years.
It wouldn’t be good for the Packers’ salary cap if Rodgers left after one year, and if he plays beyond three years, the deal must be renegotiated. So, while on paper, it’s a five-year deal, it’s really meant to last two or three.
A league source who viewed the contract provided the Journal Sentinel with details of the deal. The following should help you understand what the two sides did to make this deal happen:
Q: At a minimum, how much will Rodgers make?
A: The Packers guaranteed $101.41 million of the contract upon signing, which means Rodgers gets the money no matter what. Another $49.25 million is guaranteed for injury, which means if Rodgers got hurt and couldn’t play in 2024, he would still get paid. That money becomes guaranteed fully in March 2024.
Q: How is the money paid out?
A: Rodgers received a $40.8 million bonus upon signing and will make an additional $1.15 million in base salary and $50,000 in a workout bonus in ’22 for a combined total of $42 million. His salaries in the following years are as such:
2023 – $59.465 million base salary plus $50,000 workout bonus.
2024 – $49.25 million base salary plus $50,000 workout bonus.
2025 – $15.85 million base salary plus $5 million roster bonus and $50,000 workout bonus.
2026 – $10 million base salary plus $5 million roster bonus and $50,000 workout bonus.
Q: How much was Rodgers scheduled to make in ’22 and what was his salary-cap number before this deal?
A: In the final year of his contract, Rodgers was due $26.47 million in base salary and $500,000 in a workout bonus. His salary-cap number was $46.14 million.
Q: What is Rodgers’ salary-cap number now?
A: It is $28.53 million.
Q: How in the world did it go down when he was just guaranteed $42 million for this year?
A: It all comes down to accounting. For salary-cap purposes, the NFL allows signing bonuses to be spread out evenly over the length of a contract at a maximum of five years. It works well for both players and owners because the more money paid in a signing bonus, the easier it is to defer salary-cap charges and what player wouldn’t want his money right now as opposed to three or four years down the road? So, only one-fifth of the $40.8 million he received at signing counts against the cap.
Q: So, how does his salary-cap number break down?
A: Rodgers had $19.173 million of previous signing bonus charges on his contract that must be counted this year. Add his new base salary plus the workout bonus and $8.16 million in signing bonus charges (one-fifth of the $40.8 million bonus) and you get $28.53 million.
Q: What happens in the second year of the deal?
A: The club can exercise an option to turn the $59.465 million base salary into a signing bonus for cap purposes, thus spreading it out over the remaining four years of the deal. This again allows the Packers to defer salary-cap money into future years and lower his ’23 figure to a very manageable $31.6 million.
Q: Why is that important?
A: The lower Rodgers counts against the cap, the easier it will be for the Packers to re-sign some of their players who will be free agents in the future such as guard Elgton Jenkins, outside linebacker Rashan Gary and running back A.J. Dillon.
Q: What about the third year?
A: Same thing. The Packers have the option of converting Rodgers’ base salary of $49.25 into signing bonus and spread it out for cap purposes over the remaining three years of the deal, leaving him with a $40.74 million cap number. If the Packers choose to release or trade Rodgers after the second season, they don’t have to pay the $49.25 million.
Q: How does Rodgers’ contract compare with other players?
A: The three-year average of $50 million surpasses the previous high of $45 million that Kansas City Chiefs quarterback Patrick Mahomes is receiving. The $101.41 million in fully guaranteed money surpasses the all-time high of $95 million that Dallas Cowboys quarterback Dak Prescott received.
Q: What is the downside to this deal?
A: When Rodgers is cut, retires or is traded, all that salary-cap money that has been pushed out into future years becomes due at once. If it happens after two years, the Packers must count around $68 million of Rodgers’ charges onto their ’24 cap. That would mean about a quarter of their cap would be devoted to someone who wasn’t there. If it happens after three years, the Packers must count Rodgers $76.8 million against their cap.
Q: What could that mean for the team?
A: The salary cap is expected to rise considerably in the next few years but having one player count for even a fourth of the cap means there will be players the Packers can’t re-sign and will have to replace with low-salaried rookies. It will be a challenge for them to be competitive after he leaves.
Q: Is there anything else of interest in the contract?
A: Yes. The workout bonuses Rodgers received require him to show up for three days during the entire offseason program. In most years, he had to show up for a large percentage of the workouts, including OTAs, to earn his bonus. It means he probably will stay home during the offseason and let backup Jordan Love get all the snaps. Rodgers skipped all the workouts last year during his dispute with general manager Brian Gutekunst and still won the MVP award.