The Salary Cap Impact of Trading for Aaron Rodgers

With the rumor mill circulating about the future of Packers QB Aaron Rodgers I received a number of questions today, mainly from Jets fans, pertaining to his contract and his salary cap charges if he were to be traded.  As I mentioned before when discussing Rodgers, his is a complex contract and the different “if’s and when’s” of the deal make it hard to present on OTC to cover all the various possibilities, so let’s break down the various costs.

A team who trades for Rodgers, as long as he is traded for prior to the regular season, would inherit Rodgers guaranteed 2023 salary, which is $59.465 million. If the team trades for him during the workout portion of the offseason that would be increased by $50,000, which is a workout bonus he will earn if he shows up for three days of the program. The team would also be responsible for a $49.25 million injury guarantee in 2024. That salary would be fully guaranteed if Rodgers is not released a few days following the Super Bowl in February.

Because these salaries are so large there is a great deal of confusion as to how a team could fit Rodgers under the cap, but that is where more of the complexity of the deal comes in. A team that acquires Rodgers (or the Packers if they keep him) has the option to pay Rodgers 2023 salary as a $1.165 million base salary and a $58.3 million option bonus. For salary cap purposes that option bonus is prorated across four years for a charge of $14.575 million per year. In 2024 the team has another option that allows them to split the salary up as $2.25 million in base salary and a $47 million option bonus, which for cap purposes would be prorated over three years at a charge of $15.666 million per year.

Rodgers also has a 2025 and 2026 season in his contract at very low salaries of $20.9 and $15.05 million. For all intents and purposes these are void years as there is no scenario that would see Rodgers playing at these salaries. My assumption is they were only included in the contract to make it easier to work out a retirement on the cap in 2025 and/or drive the APY on the contract lower so it would never look as if Rodgers received a $50M+ per year contract.  

Here is the breakdown of how the trade would look on the salary cap assuming that both options are exercised and he is traded before the workout period this year:

As you can see the salary cap charges are very resonable for the 2023 and 2024 season and low enough in 2023 where arguably any team in the NFL could trade for him and absorb that hit.

The dead money in the deal could become concerning and there is no guarantee that Rodgers would even play more than this season for a team. If Rodgers decided he did not want to play in 2024 the team would sign him to a new contract that is really just for salary cap purposes. The contract would eliminate the 2024 option bonus and allow the team to carry Rodgers on the cap until June at a charge of about $16 million which would reduce to $14.575 million on June 2.  The team would be responsible for $29.15 million in dead money in 2025.

The bigger charge would be if the team decided to walk away from Rodgers rather than allowing the guarantee to kick in. At that point they would lose their ability to June 1 him and instead would take on a cap charge of $43.725 million in 2024.

The dead money numbers get larger if Rodgers were to be on the team in 2024.  At that point the team would have sunk costs of $30.242 million in each of those two “dummy” seasons and likely a player no willing to play for $20 million in salary or simply not play at all. The cleanest option here would be retirement where they would do the same thing mentioned before about taking out all bonuses from that year and process him as a June 1 retirement and take on a $30.242 million cap hit as dead money in both 2025 and 2026. If the two sides part ways then the team would take on a massive $60.483 million cap charge in 2025.

As for the Packers, they would take on $40,313,570 in dead money if they were to trade him. This is the prorated portion of the contract that comes from his $40.8 million bonus received last season and the remaining proration from a $14.26 million bonus from 2019 and a $14.465 million bonus from 2021. These costs do not travel to the new team.

An interesting option for Green Bay would be to delay the trade until after June 1, which would allow the Packers to split the dead money up as $15,833,570 in 2023 and $24,480,000 in 2024. In that scenario they would be required to carry Rodgers until June 1 at his current Packers cap charge of $31,623,570, which certainly does not help for free agency but would when it came time to sign rookies.

While this would be a highly unusual approach, Rodgers would likely not be much of an offseason participant anyway and it would allow the Packers to defer draft compensation until 2024. While I have no idea what a trade package for Rodgers would look like, given his huge salary this year and age, I can’t imagine a team throwing the farm for him since he may very well be a one year rental. Recent trades for Deshaun Watson, Russell Wilson, and Matt Stafford were for much younger players who were likely to sign extensions with their teams. Each was a trade with a logical time horizon of four to five years, not one. The two sides could easily set compensation based on performance in 2023 and Rodgers roster status in 2024.

Rodgers does not have a no trade clause in his contract so the Packers can trade him with or without his permission, but one would think that any team trading for him would need assurances from him that he will play for them. If Rodgers would like to play for one of the teams in the veteran “QB hunt” he would probably need to make a decision sooner rather than later.

Right now teams in the market for a QB are going to monitor Rodgers situation, Lamar Jackson’s situation in Baltimore, Derek Carr’s situation with Las Vegas, and the free agency of Tom Brady and Jimmy Garoppolo.  Carr would be the first domino to fall with a trade either being agreed to right after the Super Bowl or his release coming that week. Teams would be free to sign Carr in February if he were released. Jackson’s franchise tag deadline will be March 7^th. Teams will know at that point if Jackson will receive the non-exclusive or exclusive tag and if he were or were not to be available via trade. Free agency begins on March 15 at which point Brady and Garoppolo will be free to sign with any team they choose. Ryan Tannehill may also be an option at that point as well if he is released by the Titans. Team’s cant really sit and wait on Rodgers if these other options are in any way appealing only to have him decide he only will play for Green Bay in April.