Thoughts on the Tom Brady Restructure with Patriots

[adsenseyu1]

According to ESPN’s Adam Schefter and Mike Reiss Tom Brady resturctured his contract with the Patriots to convert his guarantees from skill, injury, and cap to injury only in exchange for an extra $1 million per year. This is not really a salary cap maneuver but simply a move made to improve the cash situation of the Patriots next year.

Teams that have a skill guarantee with a player prior to the season will be required to set aside that money such that it is guaranteed to be covered in the event the player is terminated from his contract. For the Patriots that meant in March they would have to deposit $24 million, Brady’s full guarantee, in an account that they could not touch. Once converted to injury only the Patriots are not required to deposit the money unless Brady was so injured that the injury guarantee could kick in. This is one of the reasons some teams will use vesting guarantees in a contract when the guarantees seem as if they are fully guaranteed upon signing.

Brady’s actual salary this year was set to be $7 million and it will now increase to $8 million, so the real cash flow gain for the season by the Patriots is going to be $16 million rather than the $24 million being reported. Based on the reports this move will reduce New Englands available cap space next year by $1 million. For Brady this is a no risk restructure as he would likely earn at least what he gave up if he was released and put on the open market.

Brady’s relationship with the Patriots is one of the most interesting dynamics in all of sports. His willingness to do these things almost creates an unfair advantage as no other high end QB has ever played ball to this level with a team.  Brady’s initial $24 million extension was signed at a time when he would have likely commanded between $55 and $60 million over the same timeframe on a regular contract extension.

Brady’s $8 million salary in 2015 ranks 17th in the NFL, a ranking that will fall further once quarterbacks are extended and other drafted in the top 5. His cap charge of $14 million also ranks 17th. Meanwhile his closest contemporaries of Peyton Manning, Drew Brees, and Tony Romo will carry cap charges of $21.5, $26.4, and $27.7 million and actual salaries of $19, $19 and $17 million. There is likely no other player in the NFL that would work with a team in this manner and the Patriots should be thankful for having a player like Brady.

[adsenseyu4]