Cam Newton Joins the Big Boy Contracts

The Panthers announced that they have finalized an extension for quarterback Cam Newton. According to ESPN’s Adam Schefter the contract is worth $103.76 million over 5 years and will include $67.6 million paid in the first three years. Schefter indicated that Newton will receive a $22.5 million signing bonus and $7.5 million roster bonus in 2015. Based on the reported numbers the contract is huge and will firmly plant Newton among the top players in the NFL. I think there is some confusion over the valuation of the contract. The reports all seem to be based upon new money, which is common, but the comparisons to the market are not being made using the same valuations.

A rumored $30 year payout by 2016 will tie Newton with Joe Flacco but fall well short of the other four major contracts, all of which were in the $40 million range in new money by the end of their first extension year. My assumption would be that Newton “catches up” in the third year of his contract where his $67.6 million will slightly trail Matt Ryan and Aaron Rodgersand be a few million lower thn Ben Roethlisberger’s $70.4 million.

Newton’s initial compensation this year, which will increase by about $16.4 million is also well short of what the other extended QB’s received in what I cann “year 0 money”. That and the likelihood of a “catch up” contract is the likely tradeoff he accepted to get in this salary range.  Ryan Tannehill and Colin Kaepernick, both less established and regarded than Newton, took similar style deals to get in the $19 million per year range.

These are the relevant figures to compare when Newton’s details fully emerge:

Year 0$0$20,000,000 $0$30,150,000$23,650,000
Year 1$30,000,000$41,500,000$40,000,000$41,750,000$41,400,000
Year 2$51,000,000$53,000,000$50,000,000$54,350,000$53,400,000
Year 3$62,000,000$68,750,000$61,000,000$68,000,000$70,400,000
Year 4$80,000,000$84,500,000$80,000,000$88,900,000$87,400,000
Year 5$100,600,000$103,750,000$100,000,000$110,000,000 –

Based on the numbers tweeted by Schefter, Newtons cap charge this season will be $13 million, a savings of $1.6 million against the cap for the Panthers. If he gets to $30 million in new oney next year that should leave Newton with a cap charge in the realm of $18.2 million.

I said it the other week when looking at the Tannehill deal that the other young and veteran players should have been thrilled to see his contract even though there are team friendly aspects to the contract. Tannehill was the least accomplished QB to ever receive a deal anywhere close to that number and that made it easy for a player like Newton to get a contract this size. I would anticipate Russell Wilson and Andrew Luck to piggyback off this and aim for over $23 million a year since they are more accomplished than Cam. Luck in particular will shoot for the moon and likely get it. Both the Seahawks and Colts, in my estimation, made mistakes by not getting deal’s done early and setting the market.

Whenever the numbers come out Ill update or add a new post detailing the contract and cap implications.