Now that Matt Ryan is the NFL’s first $30 million a year player, everything is in place for the Green Bay Packers to extend Aaron Rodgers’ contract.
What will that historic deal look like?
The short answer and best guess is that Rodgers’ impending contract extension will average between $31 million and $32 million in new money to Ryan’s $30 million, and include a full guarantee in the $110 million range, which would top Ryan’s $100 million guarantee.
Could Rodgers squeeze more out of the Packers? Maybe. He ranks with Tom Brady as the two best quarterbacks in the game.
But Rodgers also has to ask himself, how much more money is worth it? Players want to be paid what they can get, but legacies are burnished by Super Bowls above all else, and the higher his salary, the more it cuts into the Packers’ ability to put talent around him. That’s what Rodgers and his agent, David Dunn, have to weigh in their negotiations.
DOUGHERTY: Aaron Rodgers' road to record-setting deal
“You have to look at it as a player, how much is enough?” said an agent who works for one of the NFL’s biggest representative firms. “But at the same time you have to protect yourself. Any amount you give up by taking that (discount), you can’t ever get back.”
That leaves a couple of questions worth asking about Rodgers' new deal: Namely, why do the Packers and Rodgers want to do an extension now, when he still has two years left on his contract? And what will signing him to the biggest contract in league history mean for the team’s future salary caps?
The answer to the first question can lead down a mind-numbing, numbers-filled rabbit hole. So let’s make it as simple as possible.
The Packers want to do an extension now because it makes sense financially and competitively.
Theoretically, they could just pay Rodgers the $42 million he’s scheduled to make over the next two years, and then put the franchise tag on him for three years, by which time he’ll be 39. But that would be risky financially and potentially disruptive to the goal of winning Super Bowls.
I did the math, and without going into the many details, including which tag they might use (exclusive or non-exclusive), the financial gist is this: Going that route they’d at minimum have to pay Rodgers just about $30 million a year over the next five years, and it very well could be a lot more, in the $35 million range.
Besides the financial risk – the tag route pays off only if an injury wrecks Rodgers' career, in which case they won’t have to pay him – there’s also the whole thing about trying to win championships.
Elite quarterbacks allow teams to compete for the Super Bowl every year. They’re really hard to find. Because of rules that protect them in today’s game, they also have a much better chance of playing good football up to age 40 and perhaps beyond. Rodgers is 34.
Would team president Mark Murphy and GM Brian Gutekunst even consider messing with a good thing when odds are it wouldn’t save any money and very well might blow up in their faces if salaries stay on their current trajectory? That would be crazy.
The Packers are much better off locking in Rodgers’ salary and cap numbers for the next six years and ensuring the most important person in the organization is fully invested in the franchise’s success. To do that, they need to fully invest in him.
Rodgers, likewise, could roll the dice, go year-by-year, and hope quarterback salaries explode with stars such as Carson Wentz, Jared Goff and Russell Wilson up for contract extensions in the next year.
But there’s nothing like the security of guaranteed money. One easy prediction on Rodgers’ new deal: He’ll top Ryan’s record $100 million in fully guaranteed money.
Then there’s the issue of the Packers’ future salary caps, and whether Rodgers should take a discount to help build a team around him, as Brady has done in New England. The short answer is, no, it’s expecting too much for him to go that far, though Rodgers also has to realize that it would be counterproductive to push his bargaining power to the limit.
Brady has had a financial advantage over all the other quarterbacks in the league. His wife, the model Gisele Bundchen, makes even more money than he does. According to Forbes she earned $30.5 million just in 2016. Brady could take a little less pay – his contract averages $20.5 million to Rodgers’ current $22 million – and not notice the difference. Then again, judging by what’s been going on in New England recently, he appears to be feeling a little unappreciated himself these days.
Also, Rodgers might very well have big plans for life after football. He recently became a minority owner of the Milwaukee Bucks. If he entertains notions of moving up in the world of sports franchise ownership when he’s finished playing, he’s going to need a lot of capital.
But he has to weigh those aspirations against competing for championships in the final third of his career. The more money he makes, the less there is for the Packers to retain their best players and pursue free agents.
The salary cap is expected to go up at the rate it has been, at least $10 million a year, through the end of the CBA, which runs through the 2020 season. That should put it at about $200 million by then. A $29 million cap number for Rodgers in 2020 – I’ll explain a little later the reason for using that number – would be about 14.5 percent of the Packers’ cap. That’s not out of line with his last contract, which had a high of 13.2 percent in 2014.
Will a new CBA in 2021 and future TV deals change things in the latter years of Rodgers’ deal? Unlikely. Other quarterbacks will push Rodgers down the salary list, and his cap percentage will go keep going down as he gets nearer the end of his contract.
“The total (media) money involved will continue to go up because of the value,” the agent said. “There’s going to be the streaming component, there’s going to be all the different viewing options, but the total money is going to increase.”
Which means Rodgers can become the league’s highest-paid player, at least for now, without putting the Packers on any worse cap footing than they were when they extended his contract in 2013.
Here’s a best guess as how this will turn out: Rodgers will sign a four-year extension that pays $125 million to $130 million in new money, which will give him an average of $31.25 million to $32 million in new money. That would top Ryan’s $30 million.
But combined with the $42 million left on his deal, Rodgers in reality will be making somewhere between $27.8 million and $28.3 million a year over the six years of the contract, which means his cap numbers will average in that range.
That’s in the ballpark of Ryan’s $28.2 million over the six years of his deal (add his $150 million, five-year extension to the year he had left on his old contract, and Ryan will make $171.6 million over six years).
As for the full guarantee, Ryan set an NFL record as well. Officially it’s $94.5 million, but another $5.5 million becomes fully guaranteed next March. If the Falcons cut him before then, they’ll have paid him $94.5 million for one season. That’s not happening. So in effect he has $100 million guaranteed.
The Packers have to top that. Something in the $110 million range seems likely. And the higher the guarantee, the lower the average per year, which frees up cap space. Of course, it also leaves them on the hook if Rodgers suffers an injury that ruins his career. That’s the risk of doing business in the NFL.
The Packers and Rodgers are in position to do a deal now that Ryan’s is done.
The Packers have the money. They have the will. Now it’s time to pony up.