Contract tweak will benefit both Tom Brady and Patriots
Once again, Tom Brady has endeared himself to Patriots fans while upsetting agents and other star quarterbacks around the league.
And he just might have gamed the system once again, setting himself up to cash in on another payday in 2016 while creating more cap space for the Patriots.
A source confirmed to the Globe that Brady tweaked his contract to free up cash flow for the Patriots front office, as first reported Monday by ESPN.
Brady’s contract, which he agreed to before the 2013 season, called for him to have his salaries from 2015-17 become fully guaranteed ($24 million in total) this past Saturday. But Brady agreed to take away the full guarantees and convert them to guarantees for injury only. For his trouble, Brady got an extra million in salary in each of the three years — now $8 million in 2015, $9 million in 2016, and $10 million in 2017.
The move has several practical implications both for the Patriots and for Brady’s long-term future. The cap stuff can be mind-numbing, so let’s try to explain this in plain English:
■ Salary-capwise, the move doesn’t have much of an effect. Brady’s cap numbers now increase by $1 million per season — $14 million in 2015, $15 million in 2016, and $16 million in 2017.
■ The move frees up cash for the Kraft family to spend in the 2015 offseason. NFL rules require teams to keep the full amount of a guarantee in reserve, so by removing the full guarantee, the Kraft family no longer has to put $24 million in escrow for Brady this offseason. Instead they can use that cash on signing bonus payments for their upcoming free agents, which include Darrelle Revis, Devin McCourty, Stephen Gostkowski, Shane Vereen, and possibly Nate Solder. Since Brady received an extra $1 million for next year, the Patriots really freed up $16 million in cash (because Brady is owed $8 million).
“They’re not really changing the cap hits, just the cash flows,” said Joel Corry, a salary cap expert for CBS Sports and a former longtime NFL and NBA agent.
■ Removing the full guarantee certainly benefits the Patriots, but also sets a terrible precedent for other star quarterbacks and franchise players around the league. Brady already takes a hometown discount to play for the Patriots, and now has further upset the NFL’s salary structure.
“It goes against all agent advice and infuriates all the agents in the business,” Corry said. “The older quarterbacks like Eli Manning, Philip Rivers, Ben Roethlisberger, they’re now going to be asked if they’d be willing to do something like Brady just did.
“Most people who are in the business won’t like what he does, but he doesn’t have to make friends in the agent community.”
However, there is more to this move than Brady simply giving the Patriots more financial flexibility to re-sign Revis and other free agents this offseason.
Few league insiders expected Brady to play out his current contract, which is significantly undervalued for a franchise quarterback — the bar is set at about $20 million per year, while Brady was set to make $24 million over three years.
“There was always that speculation that there’s no way he was going to play for $7 [million], $8 [million], and $9 million,” Corry said.
It’s possible that by removing the guarantees, Brady is paving the way for his eventual release. But the far likelier scenario is that the Patriots have now made it much easier to restructure and extend Brady’s contract before the 2016 or 2017 seasons.
■ Let’s say the Patriots want to create salary cap space in 2016, in which Brady is set to have a $15 million salary cap number. They could designate Brady a post-June 1 cut, which would give the Patriots salary cap charges of $6 million in both 2016 and 2017. The Patriots could then re-sign Brady to a five-year deal through 2020, which would put more money in his pocket in the short term in a signing bonus, but would lower his cap number in 2016 by spreading the bonus out over five years. He did a similar thing in 2013, converting salary into signing bonus to help ease the cap charges.
Or the Patriots could wait until 2017 to restructure and extend Brady’s contract if they don’t want to toy around with cutting and re-signing him.
“Being in the business, I know there’s more than meets the eye with these things,” Corry said. “You extend [the contract] out so you’ve got five years, give him a signing bonus where he makes more than the $8 million, and pay Brady closer to what he actually deserves.”
■ And here’s another aspect to chew on: The Patriots recently extended director of player personnel Nick Caserio’s contract through 2020. It also prompted the thought that Bill Belichick plans to stay with the Patriots through 2020 as well, giving him a cool two decades on the job with the Patriots.
Is it possible that Brady’s contract tweak was made with the idea of keeping him with the Patriots through 2020, too? If he restructures his deal before 2016, he would almost certainly sign a new five-year deal that takes him through . . . wait for it . . . 2020.
Brady wants to play into his 40s, and the Patriots would be happy to have him as long as he’s playing at a high level. And the two sides may have just figured out a way to make it happen, while giving the Patriots cap flexibility and keeping Brady happy and well-paid.