A Closer Look at Russell Wilson’s Massive Contract

The numbers are now in on the Russell Wilson extension thanks to Ian Rapoport and it’s a big one.

Clearly there is some give and take on both sides, which I discussed today at the Sporting News, but now let’s focus on the cash flow of the contract to see just how big this deal is compared to the market.

Wilson will receive a $31 million signing bonus as part of the contract. That is the 3rd largest signing bonus in the NFL behind that of Drew Brees and Aaron Rodgers and it is absolutely massive. The signing bonus will bring his first year cash to $31.7 million a raise of over $30 million on the year, a record setting number for a player. Here is the running cash breakdown:

PlayerYear 0Year 1Year 2Year 3Year 4

These numbers should jump off the page because while Wilson is not going to be the highest paid quarterback based on the annual value of the deal, he will surpass any other player in every new money metric there is, leading into that fourth season.

His contract prepayment of $30.16 million will eclipse Aaron Rodgers $30.15 million that he received as part of his negotiation in 2013. This allows Wilson to bring that cash total in line with the full (not new) money received by Cam Newton, which was a sticking point in these talks. Considering Cam was starting with over $14 million this was an impressive job by Wilson and his agent.

In year 1 Wilson maintains his position as top earner with $42.5 million compared to the $41.75 million earned by Rodgers. In year 2 he maintains that $750,000 edge with a $55.1 million takehome. Ben Roethlisberger was the standard in three year value and Wilson eclipses that by $200,000.

It is at that point that the contract falls below Rodgers and maintains the small edge over Roethlisberger. Either way it is impressive and should be looked at as the top contract over the important three year period most look at. Given the length of the contract compared to Rodgers multiple year extension, you can make a strong argument that this is the best contract in the NFL.

From a cap perspective this is different (there is $2,000 missing in the report which is likely in this season) because Wilson’s initial contract costs nothing compared to this group of players.

PlayerYear 0Year 1Year 2Year 3Year 4

While Seattle did make concessions in that Year 0 salary to match the big deals they avoided falling into this trap of somehow using full salary paid over three years as some new metric which has recently been pushed by some media outlets. It would be near impossible to do.

The lower overall cost does help with the cap charges for Wilson as the team was able to dump about $7 million in charges into this season and then deal with the rest over the next four years. Had they waited until next season to do the deal they wouldn’t have been able to have cap charges as reasonable as they have now, at least on a four year contract.

  • Kirk Vollmer

    Question. . . I was under the impression that when you extend you can’t overwrite the money on your current deal you could only add too it. How did Wilson’s salary go down from 1.5 M to 700k?? Did they convert some of it into that signing bonus or can they overwrite the year 0 salary and insert a new one?

    • NW86

      The rest of the salary is just included in the signing bonus, so while it is advertised at $31M, it’s really more like $30.2M in new money. This is almost always done with every contract extension in order to minimize the first year cap hit. For example, Roethlisberger also got an identical “$31M” signing bonus, but he had more existing 2015 salary to include in the bonus, so it was only $23.65M in new money.

  • McGeorge

    This seems like a reasonable deal for both sides.
    I can’t wait to see how much Andrew Luck gets paid.
    The Colts are going to regret not getting a deal done with luck at the start of the season.
    In a year or two he’s going to be making at least 25MM, and with the cap going up, could be pushing 30MM.

    If the Colts lose Luck, they are a godawful team.

  • Derek

    Where are the reported ~$60m guarantees coming from? How much is real and how much is injury only?

  • Bob Grayson

    I notice that very few of these salary cap experts actually address the REAL, take-home money involved. For example: Rodgers will average $22,000,000 per year paying 7.65% in Wisconsin state income tax. Wilson will average $21,900,000 with ZERO Washington state income tax.

    Colin Kaepernick really takes a beating: $19,000,000 while paying a 13.3% California state tax!

    • sunrise089

      That isn’t really correct. When Wilson is playing on the road he will pay taxes to the states he’s playing in, so the effect is only about half as large as you’re claiming, and less as a percentage of total taxation since federal taxes dwarf those of the states anyways.

      • Derek Clark

        I am not an NFL tax lawyer but I believe the rule is they pay 2 days worth of salary in taxes for away games and the rest is taxed from their home state. So 16/365 of their salary is subjected to outside sales tax not half.

        • Ben Peterson

          In addition to that, the signing bonus is entirely in Washington, so he gets all of that.

          • sunrise089

            Do you know this to be the case? I’m not saying it’s not, but signing bonuses are often still paid out over a longer term so I wonder if other states would still try and grab a piece…

          • Derek Clark

            Signing bonuses are paid immediately, the cap hit from the signing bonuses are spread out.

        • sunrise089

          We’re actually both wrong I think, but you’re probably closer. I had mainly seen away taxation of athletes in the context of baseball where there are far fewer non-game ‘work’ days. Apparently the rule is you’re taxed based on pro-rated ‘duty days,’ which includes practice and camp but not days where you’re not working on football. That’s something like 180 days, and so I think the final figure would be ~16/180 taxable.

      • Bob Grayson

        Upon further review, you might very well be correct. Rodgers would still be paying over $350,000 a year to the state of Wisconsin – that, my friend, is not pocket change. I’ll bet the state gets 7.65% of all of Rodgers’ other income such as endorsements. Wilson still pays ZERO on that type of income.

        I’m sure you had a good reason to bring up Federal taxes, but they apply to all players. Sure, they are confiscatory & much higher than any state income tax. So what bearing does that have on state income tax issues I mentioned?

        • eddiea

          I don’t know how/if this comes into play,but he does have a state income tax to pay. He still lists VA as his home state and they do have a state tax. Although I’m pretty sure he changed it before signing this contract, but I’d like someone to explain this more. Also,in some states,like MD & Ohio,thd “Jock Tax” has players paying State/County/City taxes.

          • mike jones

            I did some contracting work in WI 3 years ago over a 2 month period. WI don’t joke around about going for money earned in their state, not even for relative peons like us. Rogers is paying up, every dime. They reside their for 6 months while practicing, playing, promoting.

        • sunrise089

          Bob, I considered not bringing up federal taxation, so apologies if it came off as irrelevant to our discussion.

          I wish this wasn’t the case, but I don’t feel most people know what they pay annually in income taxes. I think instead they focus on their take-home pay per period. Seattle could absolutely argue that Wilson keeps XXX,XXX due to a more favorable tax regime, but I could see another team making the point that the state tax difference only amounts to some small fraction of the over tax and deduction burden, and providing examples of take home pay totals in each state and arguing that both numbers are very large, hoping the player won’t multiply out the difference.

        • mike jones

          Rogers pays $841,500 a year to WI on his $22,000,000.

      • David Shawn

        hes not hired to in other states his emplyment is in washington, whoever told u he has to pay taxes to play in another state done bumped their stupid ass minds

        • sunrise089

          This is not correct, and also isn’t very polite :( Look up ‘jock taxes’