Tom Brady will get his first ever chance at free agency which of course has brought out the Brady discount discussions. The numbers get a bit insane when people get into these discussions. People look at career earnings and see Drew Brees, Peyton Manning, Matt Ryan, etc… above Brady and immediately consider that as a justification to say he’s given up close to $100M in earnings in his career. Those things completely throw out things like where a player was drafted, timing of contracts, the market at the time and so on. So let’s discuss the Brady contracts.
The first areas that should immediately be thrown out when it comes to Brady are his early career earnings. Brady, as a late round pick, essentially earned nothing as a rookie nor did he have any leverage on his early contract extension. This is in contrast to Peyton Manning, Eli Manning, and countless others who have earned more than Brady who were top picks that earned monster contracts right off the bat. Brady’s first contract in the NFL averaged just over $288,000 a year compared to Peyton who averaged $7.7 million a year. Even Drew Brees averaged just over $900,000 a year as a 2nd round pick.
Contract number two came in for Brady in 2002. This was one year after winning the Super Bowl and the Patriots deciding that Brady was their guy instead of Drew Bledsoe who the team has signed just one year earlier to a 9 year contract that averaged $10.6 million a season. Brady of course was far from established at this point in time. Brady’s deal averaged $7.4 million in new money a year but only ran four years. It’s also worth noting that Brady would have been a RFA in 2003 and that tender was in the ballpark of $1.3M. Factoring that in brings us closer to a contract that really was a three year extension worth $9.4 million and change. Regardless of how you wish to value this contract I think its fair to say that this did not represent a discount.
Contract number three came in 2005 following Brady’s third Super Bowl victory and his best season as a pro, throwing for nearly 3,700 yards and 28 touchdowns while running a much more aggressive passing game than they had played in the past. Brady and the Patriots clearly had the number of Manning and the Colts but Manning was also considered the clear cut number one QB in 2005 and anyone thinking otherwise is bringing up revisionist history. Manning in 2004 threw for an obscene 4,557 yards and 49 touchdowns. His only season throwing for less than 4,000 yards was as a rookie in 1998. Manning had signed a contract that ran for 7 seasons and averaged $14 million a year. Brady took a four year extension that averaged $12 million a season, which was $1 million a year more than Brett Favre, $1.5 million more than Steve McNair, and $3 million more than Chad Pennington (oh Jets). On a side note the actual high water mark for contracts was Carson Palmer at just under $16.2 million a year but nobody gave much credence to that contract since it was signed with four years remaining on his rookie contract and would run for 11 years in total.
Would I consider Brady underpaid? Maybe slightly and it depends on how you view Mike Vick, who was a phenom at the time. Vick signed an extension toward the end of the 2004 season that paid him $13 million a year. While Brady should not have been paid higher than Manning I think you can argue he should have made more than Vick. There is also the years factor though and what discount that should be given. Manning and Vick were locked for seven years and Brady just four. Taking that all into account its not much of a give up by Brady.
Contract four was signed in 2010 and by this point in time Brady was not only the established “winner” from his early 2000s run but also considered right up there with Manning as the best player in the NFL. It was reflected in his contract which made him the highest paid player in the NFL at $18 million a year, about $1.75 million more a year than the other Manning who signed a year prior. Peyton, a year later, would sign for the identical $18 million a season. So unless you want to say Peyton was playing for pennies this was clearly not taking less money for the good of the team.
Contract five is where things get interesting and we do indeed get a price break. The Patriots went to Brady in 2013 and got him to agree to a super low three year contract extension in order to help them create cap space in 2013. The contract added three years at just $9 million a year. The number was so low we didn’t even value it on OTC at that number and instead just looked at it as a five year contract that averaged $11.4 million.
The concept at the time seemed to be that the Patriots were grooming a replacement for Brady. He would be 38, 39, and 40 in the extension years and the entire contract was virtually guaranteed (they would have had to cut Brady before the 2014 regular season ended to avoid paying him from 15 to 17). Plenty of quarterbacks broke down around the age of 35 so you could perhaps sell this as something reasonable though it clearly was not.
This is where things get more complicated with Brady’s contracts and the differences between salary cap management and massive discounts being taken. If you follow the cash trail, which is the most important thing for a player, Brady was set to earn $30 million in 2013 and 2014 on his original contract and wound up earning $33 million as part of the new contract. At the same time his cap number fell from $21.8M in 2013 and 14 to $13.8 and $14.8 million respectively. That’s the wackiness of the cap- get paid more but count less.
However Brady would have been looking at a new contract in 2015 had he not signed this deal and even at an older age he would have done well for himself. He essentially gave that up for $10 million in 2015 and just a few bucks in 16 and 17. Now Brady never got to the franchise tag in his career and most QBs don’t get there so to estimate how much he game up we really have to go back and look at the market in 2014, which is when he would have signed an extension. The QB market in 2014 was still pretty stagnant and showed no movement until 2016 when values started to jump past $24 million. I’d say as a rough estimate he would have come in just under Rodgers at something like $21.5 or $21.75M a year on a four year contract. That does seem like a big difference.
Still its not as cut and dry as comparing those two sets of numbers because the Patriots, other than in 2015, kept tweaking his deal to push cash forward to keep the earnings more in line with reality. First they added an extra $3M in salary to the contract starting in 2015. Then in 2016 the Patriots signed Brady to a two year extension worth $20.5 million a season. In this one he ended up earning $30 million in the “old years” that were left from his old contract (2016 and 2017) rather than the original negotiated rate of $17 million. That’s still a discount for Brady but its not as bad as it originally looked.
In 2018 the Patriots added another $5 million in incentives to the deal to give him a chance to earn $20 million rather than $15 million though he failed to earn the bonus money. In 2019 they more or less made good on it giving him an $8 million raise to bring his salary to $23 million which was somewhat in line with the $25 million that was paid to Drew Brees.
The right way to compare the contract outcomes is to look at what he likely would have earned signing a real market contract in 2015 after playing out the 2013 and 2014 years versus what he actually earned. This table shows the estimated running cash flows that would have occurred vs what actually did occur.
The difference here is $31 million, with the majority of the discount coming from 2015 to 2018, a savings of nearly $8M a year during that timeframe. The $23M he earned in 2019 matches Brees’ 2019 salary but was $2M under Brees annual contract value. So the ultimate discount he gave New England is about $33 million, maybe a few million more if you want to give him a bump for coming in under Vick early in his career.
If you compare Brady’s career starting in 2005 with Manning’s starting in 2004 (the year both signed new contracts and when Brady was considered a top line QB) its true that Manning had far better contracts but it was not until the final years of Manning’s career in Denver where he grossly pulls away from Brady. That coincides with those big discount years for Brady that began in 2014. The difference was as big as $39.4 million and wound up at $29.4 million. But its important to see how while there were always fluctuations in Manning’s favor the bottom line amount was a $9.4 million difference before the few true discount years for Brady took off.
So Brady certainly has helped out the Patriots but it hasn’t been during his entire career. For the most part it was over a three or four year period and its certainly nowhere near the numbers that seem to get thrown around that Brady has sacrificed over $60 million to help the Patriots. A lot of what the Patriots have done is to use Brady to manipulate the salary cap which makes the impact look bigger than what it is. This is a gamble that mainly paid off but very easily could have been a catastrophe like what occurred with Dallas and Tony Romo. The Patriots as it stands now may carry $13.5M for Brady if he does not return this year and that’s because of the way they have kept aggressively pushing the cap off for Brady.
The team has also used this narrative to push the “Patriot way” on other players as often team friendly aspects of a proven QB contract can easily be driven onto others on the team. Unlike Brady those players did not receive raises or new deals at various stages of their contracts. This is one of those soft benefits of what Brady did that probably had a bigger impact than the Brady “pay cuts” did on their own. You cant really measure this but I think it exists.
In hindsight Id think the Patriots strategy with Brady was to use that one contract in 2013 to get their salary cap and contracts in order with a plan in mind to keep finding ways to give Brady raises to keep him reasonably compensated during most of his time with the team. My guess is they also thought he would at some point break down and actually finish his career earning a lower salary (in the $8 to $13M range) to balance out all the prorated money that they pushed in his contract deep into his 40s. That part never really happened though.
While its fair to say that Brady never pushed the issue in his career how many quarterbacks have? Most of the time QB contracts are fairly simple. Almost nobody gets to free agency. Few even get to the tag. We sometimes speculate about how nasty things could get but it never gets that bad. How many nasty negotiations can you think of in the last 10 years? Kirk Cousins with the Redskins. Who else? Maybe Brees’ first big deal with the Saints was a little testy. E. Manning, Ben Roethlisberger, and Philip Rivers all got done easy enough. No problem with Aaron Rodgers. Ditto Andrew Luck, Matt Stafford, Jared Goff, Carson Wentz, Russell Wilson and everyone else.
Regardless of what people like me say about how a player is worth so much based on his impact the fact is the QB position is paid a ton of money and they have long careers that usually span multiple contracts. When you get into the kind of money we are talking about for the Brady’s of the world there comes a point where its all going to sound fine and they just want to get out there and play football. Its different than the other positions on the field where the job security isn’t there. Most of the good players at QB are going to play until their mid to late 30s and get paid incredibly well while also getting the majority of the endorsements in the local and national campaigns.
Brady has likely taken the biggest discount and for a majority of his career and has probably had the most chummy relationship ever with a team but this has become somewhat overblown over time.