- Messages
- 92
- Reaction score
- 147
Posted elsewhere and sharing here,
With all the turmoil of a not-so-great season going on, a number of people have been talking about potentially trading Rodgers. His latest contract in 2022 has been widely reported to be complicated, so I decided to do a bit of a deep dive and try to piece together the actual picture of his contract situation. This post is basically the director's cut of this overthecap article, so if you are already familiar with it, this might not be as useful for you.
Looking Ahead to the Packers Options with Aaron Rodgers | Over the Cap
1) How do contracts work?
First of all, we can think of contracts as having three different kinds of money:
I tried to compile all the cap hits from 2022 and onwards from different sites. Here's my view of it, which matches Overthecap, along with the sources for each number:
If Rodgers retires the Packers would be on the hook for all the "past money" (signing bonus money that hasn't been accounted for yet), which is $40,313,570. They could choose to have that impact entirely in the 2023 cap or keeping him rostered till June to split the hit: $15,833,570 in 2023 and $24,480,000 in 2024.
4) What happens if Rodgers is cut?
This is not a realistic scenario, but let's do the numbers anyway. In addition to the retirement figures the Packers would also be on the hook for the 2023 guarantees, for a total cap hit of $99,778,570. If the 2023 bonus is prorated (I'm pretty sure the contract has language to convert it to a signing bonus automatically without needing to negotiate with Rodgers) they could do a post-June thing for a $31,573,570 hit in 2023 and a massive $68,205,000 hit in 2024. Safe to say this is not happening.
5) What happens if Rodgers is traded?
For the Packers, the cap hit is exactly the same as if he retires, so refer to section 3 for that information. However, I wanted to use this section to analyze what the contract would look like for the acquiring team, because this is what is going to determine whether this is a realistic scenario or not.
5.1) One year rental
If the acquiring team intends to keep Rodgers for just one year, they would have to pay him his full 2023 salary, including the roster bonus (which can be prorated) and the base salary. This is a total of $59,515,000 for one year. The 2023 cap hit would be lessened by converting the roster bonus to signing bonus, but the 2024 cap hit would be significant.
There are three options to do this:
5.2) Two year rental
If the acquiring team intends to keep Rodgers for 2024 too, they will probably have to renegotiate the contract with him because, as is, it's kind of expensive. Besides the aforementioned 60 million dollars for 2023 the team would also pay the 2024 option ($47,000,000) and the 2024 salary ($2,300,000) for a total of $49,300,000. This means the two year rental has a total value of $108,815,000. Again, hard to swallow for a 40 year old QB.
I'm not going to go into all the ways you could do this with the combinations of converting / not converting the 2023 and 2024 roster bonuses, doing or not doing post-June, etc. Any way you slice it the team has to get these 110M in their cap, so it's a tough sell. Here's what I think would be the most likely way, which is converting each roster bonus to signing bonus and doing a normal cut after (not post-June).
4) Final musings
This is all probably too much information, sorry about that. For me, there are three clear takeaways:
With all the turmoil of a not-so-great season going on, a number of people have been talking about potentially trading Rodgers. His latest contract in 2022 has been widely reported to be complicated, so I decided to do a bit of a deep dive and try to piece together the actual picture of his contract situation. This post is basically the director's cut of this overthecap article, so if you are already familiar with it, this might not be as useful for you.
Looking Ahead to the Packers Options with Aaron Rodgers | Over the Cap
1) How do contracts work?
First of all, we can think of contracts as having three different kinds of money:
- Signing bonus: the signing bonus is paid upfront so it's part of what is reported as "guaranteed" money. This is money that the player receives at the time of signing the contract, but the team can spread that cap hit over the life of the contract (including void years) to a maximum of 5 years. For example, a four year contract with a 60M signing bonus means the player gets 60M cash at the time of signing but the team will have a 15M impact on their cap for the next 4 years. When a player is traded or cut, this impact on the cap is "accelerated" to the current year. If you cut/trade the player after June 1st, the impact on the current year remains the same (in our example, 15M) and all future cap hits are accelerated to next year instead. Regardless, the most important thing to remember here is that there is absolutely no way you can escape these cap hits. This is money that the player already received from the team, so sooner or later it has to be accounted for in the cap.
- Future guarantees: these are salary figures (base salary, roster bonuses, whatever) that are guaranteed by the team. Unlike a signing bonus, this money will be paid on the corresponding year of the deal, not upfront. Therefore, these guarantees apply when a player is cut (the team "promised" the player this money so they have to pay it) but do not have a cap impact when the player is traded - rather, the new team is now liable for these guarantees. Also, if the player retires these guarantees do not apply.
- Non-guaranteed salary: pretty self-explanatory, this is just salary (base, roster...) that is not guaranteed and therefore has no cap hit if the player is traded or cut. This is often used to fluff the contracts by agents so they can report much bigger numbers than the player is actually likely to receive.
I tried to compile all the cap hits from 2022 and onwards from different sites. Here's my view of it, which matches Overthecap, along with the sources for each number:
- $11,500,000 of cap hit from the 2018 signing bonus ($57,500,000 over five years). Source
- $7,673,568 of cap hit from the 2021 restructure bonus ($14,464,706 over two years). Source
- $8,160,000 of cap hit from the 2022 signing bonus (40,800,000 over five years, including two void years). Source
- $1,150,000 of cap hit from his base salary. Source
- $50,000 of cap hit from his workout bonus. Source
- Signing bonus: in 2023, the Packers still have to account for another $7,673,570 from the 2021 restructure bonus plus another $8,160,000 from the 2022 signing bonus. These make a total of $15,833,570 that, as we said above, is completely unescapable by the Packers. In addition, another $24,480,000 of 2022 signing bonus is due for 2024 and beyond.
- Future guarantees: there is a 2023 option with a value of $58,300,000 that is fully guaranteed along with that year's salary (another $1,165,000). This money is due by the Packers only if they cut Rodgers, which is the reason he's realistically uncuttable. However, if Rodgers retires this money is no longer due, and if he is traded his new team would be the one on the hook for this money.
- Non-guaranteed salary: besides the meaningless $50,000 workout bonuses each year, the salary for 2024 as beyond is also non-guaranteed. However, there is a huge $47,000,000 option in 2024 that is not guaranteed now but would become guaranteed if Rodgers is rostered that year, so that is something to have in mind. Also, this bonus is guaranteed for injury, so let's hope for no career ending injuries.
If Rodgers retires the Packers would be on the hook for all the "past money" (signing bonus money that hasn't been accounted for yet), which is $40,313,570. They could choose to have that impact entirely in the 2023 cap or keeping him rostered till June to split the hit: $15,833,570 in 2023 and $24,480,000 in 2024.
4) What happens if Rodgers is cut?
This is not a realistic scenario, but let's do the numbers anyway. In addition to the retirement figures the Packers would also be on the hook for the 2023 guarantees, for a total cap hit of $99,778,570. If the 2023 bonus is prorated (I'm pretty sure the contract has language to convert it to a signing bonus automatically without needing to negotiate with Rodgers) they could do a post-June thing for a $31,573,570 hit in 2023 and a massive $68,205,000 hit in 2024. Safe to say this is not happening.
5) What happens if Rodgers is traded?
For the Packers, the cap hit is exactly the same as if he retires, so refer to section 3 for that information. However, I wanted to use this section to analyze what the contract would look like for the acquiring team, because this is what is going to determine whether this is a realistic scenario or not.
5.1) One year rental
If the acquiring team intends to keep Rodgers for just one year, they would have to pay him his full 2023 salary, including the roster bonus (which can be prorated) and the base salary. This is a total of $59,515,000 for one year. The 2023 cap hit would be lessened by converting the roster bonus to signing bonus, but the 2024 cap hit would be significant.
There are three options to do this:
- Full cap hit of $59,515,000 in 2023 by not converting the roster bonus and paying it outright.
- Converting the roster bonus to signing bonus and cutting him in 2024 with no post-June designation for cap hits of $15,790,000 in 2023 and $43,725,000 in 2024 (this method is the one described in the screenshot above).
- Converting the roster bonus to signing bonus and cutting him in 2024 with post-June designation for cap hits of $15,790,000 in 2023, $14,575,000 in 2024 and $29,150,000 in 2025.
5.2) Two year rental
If the acquiring team intends to keep Rodgers for 2024 too, they will probably have to renegotiate the contract with him because, as is, it's kind of expensive. Besides the aforementioned 60 million dollars for 2023 the team would also pay the 2024 option ($47,000,000) and the 2024 salary ($2,300,000) for a total of $49,300,000. This means the two year rental has a total value of $108,815,000. Again, hard to swallow for a 40 year old QB.
I'm not going to go into all the ways you could do this with the combinations of converting / not converting the 2023 and 2024 roster bonuses, doing or not doing post-June, etc. Any way you slice it the team has to get these 110M in their cap, so it's a tough sell. Here's what I think would be the most likely way, which is converting each roster bonus to signing bonus and doing a normal cut after (not post-June).
4) Final musings
This is all probably too much information, sorry about that. For me, there are three clear takeaways:
- We cannot cut Rodgers.
- It will be very hard to find a trade partner, and if we do, the haul will probably be a lot lower than many of you expect. With a choice of 60M for one year or 110M for two years plus all the questions about this year's performance, I think we'd be lucky to see a first rounder.
- If Rodgers does not want to retire and we find no trade partners, the Packers are pretty much doomed. We'd be forced to carry him next year with a 31M cap hit and be saddled with a colossal dead cap of 68M in 2024, assuming we get rid of him then.
