Looking at the Contracts of Rob Gronkowski and Aaron Hernandez

With the Patriots star Tight End duo in the news I figured I would do a quick once over of the details I had on their contracts to point out some of the options for the players in the event of the worst case scenarios and clear up some misconceptions about the guarantees in their contracts and potential future cap treatments.

Rob Gronkowsi signed an extension in 2012 that contained  about $13.2 million in full guarantees and another $5 million guaranteed for injury only. His cap numbers the next two seasons are very manageable at $2.75 and $5.4 million, neither of which rank in the top 10 of the position. His salary is fully guaranteed in 2014. The protection for the Patriots comes in 2015. Gronkowski’s base salary is guaranteed for injury only in 2015 and does not vest to a full guarantee until the 5th day of the 2015 League Year.

To collect on an injury guarantee Gronkowski would need to be incapable of playing in the NFL that season due to his injury, so provided he can pass a physical the Patriots can release him anytime between the end of the 2014 Super Bowl and the 5th day of the 2015 League Year with no financial penalties. If Gronkowski remained on the Patriots his cap charge would be $8.65 million, highest in the NFL, making it a unlikely number if he is a diminished player from all the injuries. If released prior to  the start of the league year his dead money cap charge will only be $3.3 million making it cost effective for the Patriots to release him.

The Patriots have even further protection in the form of a $10 million dollar option bonus due in 2016 in the event they want to give Gronkowski a look in 2015 even at the high cap number.  The option is unique in that it is accounted for against the cap starting in 2015 despite actual payment not being due until 2016.  The reason for this is that the decision date on the option is the final day of the 2015 League Year which occurs long after the season and Super Bowl are played. If the Patriots were to release him prior to the bonus the dead money in 2016 would only be $1.65 million and they would receive a $2 million cap credit for money accounted for but not paid in 2015.

So the fact is the Patriots have little to worry about when it comes to injuries with Gronkowksi from a financial standpoint. His cap hits are low the next two seasons and they have a large number of options in 2015 to move on with little financial penalty over the next two seasons.

Aaron Hernandez’ situation is a bit different as we are now looking at a potential off the field issue rather than an injury issue. I don’t think anybody knows what is really going on right now and its only fair to speculate that whatever is happening could prove to be a distraction to Hernandez. Hernandez already has a partial guarantee on his salary in 2014 and, unlike Gronkowski, no future options or vesting guarantees. He received a $12.5 million dollar signing bonus so the cost to release or trade next year would include $7.5 million in dead money just from that bonus.   If the situation proves to be serious and Hernandez is unable to play in the NFL the Patriots would have the right to recover money already paid earning credits each year he is unavailable to the team. So the Patriots have plenty of protection in the event of the worst possible scenarios as we wait to learn more about what this ongoing investigation is really about.

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