Aaron Rodgers contract - An analysis

[Packer_ESP]

With all the turmoil of a not-so-great season going on, a number of people have been talking about potentially trading Rodgers. His latest contract in 2022 has been widely reported to be complicated, so I decided to do a bit of a deep dive and try to piece together the actual picture of his contract situation. This post is basically the director's cut of this overthecap article, so if you are already familiar with it, this might not be as useful for you.

Looking Ahead to the Packers Options with Aaron Rodgers | Over the Cap

1) How do contracts work?

First of all, we can think of contracts as having three different kinds of money:

• Signing bonus: the signing bonus is paid upfront so it's part of what is reported as "guaranteed" money. This is money that the player receives at the time of signing the contract, but the team can spread that cap hit over the life of the contract (including void years) to a maximum of 5 years. For example, a four year contract with a 60M signing bonus means the player gets 60M cash at the time of signing but the team will have a 15M impact on their cap for the next 4 years. When a player is traded or cut, this impact on the cap is "accelerated" to the current year. If you cut/trade the player after June 1st, the impact on the current year remains the same (in our example, 15M) and all future cap hits are accelerated to next year instead. Regardless, the most important thing to remember here is that there is absolutely no way you can escape these cap hits. This is money that the player already received from the team, so sooner or later it has to be accounted for in the cap.
• Future guarantees: these are salary figures (base salary, roster bonuses, whatever) that are guaranteed by the team. Unlike a signing bonus, this money will be paid on the corresponding year of the deal, not upfront. Therefore, these guarantees apply when a player is cut (the team "promised" the player this money so they have to pay it) but do not have a cap impact when the player is traded - rather, the new team is now liable for these guarantees. Also, if the player retires these guarantees do not apply.
• Non-guaranteed salary: pretty self-explanatory, this is just salary (base, roster...) that is not guaranteed and therefore has no cap hit if the player is traded or cut. This is often used to fluff the contracts by agents so they can report much bigger numbers than the player is actually likely to receive.

2) What's Rodgers' contract situation?

I tried to compile all the cap hits from 2022 and onwards from different sites. Here's my view of it, which matches Overthecap, along with the sources for each number:

• $11,500,000 of cap hit from the 2018 signing bonus ($57,500,000 over five years). Source
• $7,673,568 of cap hit from the 2021 restructure bonus ($14,464,706 over two years). Source
• $8,160,000 of cap hit from the 2022 signing bonus (40,800,000 over five years, including two void years). Source
• $1,150,000 of cap hit from his base salary. Source
• $50,000 of cap hit from his workout bonus. Source

That all adds up to the $28,533,568 cap hit of 2022. But what about the future? First, let's look at it following the same breakdown we did in the first part of the post:

• Signing bonus: in 2023, the Packers still have to account for another $7,673,570 from the 2021 restructure bonus plus another $8,160,000 from the 2022 signing bonus. These make a total of $15,833,570 that, as we said above, is completely unescapable by the Packers. In addition, another $24,480,000 of 2022 signing bonus is due for 2024 and beyond.
• Future guarantees: there is a 2023 option with a value of $58,300,000 that is fully guaranteed along with that year's salary (another $1,165,000). This money is due by the Packers only if they cut Rodgers, which is the reason he's realistically uncuttable. However, if Rodgers retires this money is no longer due, and if he is traded his new team would be the one on the hook for this money.
• Non-guaranteed salary: besides the meaningless $50,000 workout bonuses each year, the salary for 2024 as beyond is also non-guaranteed. However, there is a huge $47,000,000 option in 2024 that is not guaranteed now but would become guaranteed if Rodgers is rostered that year, so that is something to have in mind. Also, this bonus is guaranteed for injury, so let's hope for no career ending injuries.

3) What happens if Rodgers retires?

If Rodgers retires the Packers would be on the hook for all the "past money" (signing bonus money that hasn't been accounted for yet), which is $40,313,570. They could choose to have that impact entirely in the 2023 cap or keeping him rostered till June to split the hit: $15,833,570 in 2023 and $24,480,000 in 2024. 

4) What happens if Rodgers is cut?

This is not a realistic scenario, but let's do the numbers anyway. In addition to the retirement figures the Packers would also be on the hook for the 2023 guarantees, for a total cap hit of $99,778,570. If the 2023 bonus is prorated (I'm pretty sure the contract has language to convert it to a signing bonus automatically without needing to negotiate with Rodgers) they could do a post-June thing for a $31,573,570 hit in 2023 and a massive $68,205,000 hit in 2024. Safe to say this is not happening.

5) What happens if Rodgers is traded?

For the Packers, the cap hit is exactly the same as if he retires, so refer to section 3 for that information. However, I wanted to use this section to analyze what the contract would look like for the acquiring team, because this is what is going to determine whether this is a realistic scenario or not.

5.1) One year rental

If the acquiring team intends to keep Rodgers for just one year, they would have to pay him his full 2023 salary, including the roster bonus (which can be prorated) and the base salary. This is a total of $59,515,000 for one year. The 2023 cap hit would be lessened by converting the roster bonus to signing bonus, but the 2024 cap hit would be significant.

There are three options to do this:

• Full cap hit of $59,515,000 in 2023 by not converting the roster bonus and paying it outright.
• Converting the roster bonus to signing bonus and cutting him in 2024 with no post-June designation for cap hits of $15,790,000 in 2023 and $43,725,000 in 2024 (this method is the one described in the screenshot above).
• Converting the roster bonus to signing bonus and cutting him in 2024 with post-June designation for cap hits of $15,790,000 in 2023, $14,575,000 in 2024 and $29,150,000 in 2025.

Any way you split it, it's 60 million dollars for one year, which seems kinda expensive. If a team does this it has to be a team that believes has all the pieces for a one year run and is ready to commit to cap hell and rebuilding in 2024. Not saying it's impossible, but these cap hits will undoubtledly have an impact on the draft picks a team is willing to part with for such a deal.

5.2) Two year rental

If the acquiring team intends to keep Rodgers for 2024 too, they will probably have to renegotiate the contract with him because, as is, it's kind of expensive. Besides the aforementioned 60 million dollars for 2023 the team would also pay the 2024 option ($47,000,000) and the 2024 salary ($2,300,000) for a total of $49,300,000. This means the two year rental has a total value of $108,815,000. Again, hard to swallow for a 40 year old QB.

I'm not going to go into all the ways you could do this with the combinations of converting / not converting the 2023 and 2024 roster bonuses, doing or not doing post-June, etc. Any way you slice it the team has to get these 110M in their cap, so it's a tough sell. Here's what I think would be the most likely way, which is converting each roster bonus to signing bonus and doing a normal cut after (not post-June).

4) Final musings

This is all probably too much information, sorry about that. For me, there are three clear takeaways:

• We cannot cut Rodgers.
• It will be very hard to find a trade partner, and if we do, the haul will probably be a lot lower than many of you expect. With a choice of 60M for one year or 110M for two years plus all the questions about this year's performance, I think we'd be lucky to see a first rounder.
• If Rodgers does not want to retire and we find no trade partners, the Packers are pretty much doomed. We'd be forced to carry him next year with a 31M cap hit and be saddled with a colossal dead cap of 68M in 2024, assuming we get rid of him then.

Honestly, I always liked Gute but looking at the details of this contract, it's extremely hard to defend it. This contract will single handedly destroy the Packers for the next 2-3 years unless Rodgers retires or we find a trade partner.

[dll2000]

Given this. Assuming it’s accurate.  

How many fans want him to retire after this season? 

It seems best scenario at moment.  

Also, not out of realm of possibility he plays much better next season and team overall is much better.  

Interesting to hear where you guys are at with this at the moment.

[Packerraymond]

The blueprint was laid last week vs Dallas on how we can still be an elite offense with Rodgers, the blueprint has been there all season. We have to run the ball effectively and Rodgers has to hit the deep ball. Our offense needs to meld better as well, we're way more effective passing under center and have been way more effective running from gun. 

I'd rather Rodgers retires and we move into that next era, but I see a path forward for this offense with Rodgers if we add a TE that can threaten a defense. Rodgers is going to need to eat a little humble pie though and give more creative control to LaFleur than he currently has.

[{Family Ghost}]

51 minutes ago, dll2000 said:

Given this. Assuming it’s accurate.  

How many fans want him to retire after this season? 

It seems best scenario at moment.  

Also, not out of realm of possibility he plays much better next season and team overall is much better.  

Interesting to hear where you guys are at with this at the moment.

Trade him for as much as you can get.  There are desperate teams out that will move heaven and earth to get Rodgers on their roster.  Love needs to be the starter in 2023 .. should have been the starter this year if the Packers brass wasn't chicken shat.

Edited November 21, 2022 by {Family Ghost}

[MacReady]

My analysis of his contract is a lot more user friendly to read:

It’s bull****.

[pgwingman]

Yeah I'm torn on this. Andrew Brandt has been insisting that this contract is "one year, and then we'll see" for the Packers, but I just don't see it. When I look at it, it looks like we gave up control and paid a huge price for the privilege of doing so. 

[NFLGURU]

Rodgers will play out the contract.  Gute needs to find Rodgers replacement.

[{Family Ghost}]

7 minutes ago, NFLGURU said:

Rodgers will play out the contract.  Gute needs to find Rodgers replacement.

If Love is a bust then I don't want Gute selecting our next QB.  He apparently though highly of Kizer and he was awful.  

[NFLGURU]

4 minutes ago, {Family Ghost} said:

If Love is a bust then I don't want Gute selecting our next QB.  He apparently though highly of Kizer and he was awful.  

I dont think Love will be a bust, just not enough of what you need to win consistently.  

Agree on Gutes QB track record, but he's the GM for now. 

[15412]

Murph and Gute were beyond stupid for not trading Ol Rodg when he was pouting.  They could have got a kings ransom at that point and this team would have been just fine in the short term and rockin it long term.  They should be held accountable.

If Rodg wants out and is willing to go to a certain team by all means move him.  No doubt we'll get little for him with the part of the contract they would eat.  Maybe a 3rd Round pick and a bag of Doritos.  Fun size bag, we won't get the family size at this point.  Rodgers hasn't gotten us to the big game in his prime for over a decade while on many capable and talented teams.  He's now regressed with age and attitude.  

[Toddfather]

The season has been really disappointing, but I'm still down for another year with 12. I think there is a lot to our issues, and I do wonder how bad the thumb injury is. This team still has talent, and I think we can get the young guys some good experience and add more pieces. Find a real DC (I know, that has been a goal for like 20 years). While I have made strides that I think some of you are proud of me for 😀, I'm still a homer that wants to see another ring with 12. Not guaranteed it will happen, but I'm in for another year. Hey! Maybe he will come to camp! 

[ThatJerkDave]

4 hours ago, Packerraymond said:

The blueprint was laid last week vs Dallas on how we can still be an elite offense with Rodgers, the blueprint has been there all season. We have to run the ball effectively and Rodgers has to hit the deep ball. Our offense needs to meld better as well, we're way more effective passing under center and have been way more effective running from gun. 

I'd rather Rodgers retires and we move into that next era, but I see a path forward for this offense with Rodgers if we add a TE that can threaten a defense. Rodgers is going to need to eat a little humble pie though and give more creative control to LaFleur than he currently has.

I agree with most of this.  I do want him to play out this contract though.  I think that Rodgers will rebound if he returns.  He will have more time in with these new WRs, and will have (hopefully) a better line as well.  TE room has to change, and I would bet that the RB room looks a lot different as well.  

As for Love, I think it was just a poorly timed move.  At this point, I feel like he can be a middling QB if he gets the chance, but I haven't seen anything that wows me.  And if he moves on, and is good, then good for him.  I will only dislike him if he goes within the division.

[chefj85]

The Packers are in a real mess here. I'm not sold on Love being the guy so I'm not necessarily sold on wanting Rodgers to retire either. It might be insane, but I think a lot of us thought Rodgers best days were behind him in 18, and then he wasn't impressive in 19, then won back to back MVP's. I think its very possible that this is a situation where the rumors of his demise have been greatly exaggerated. The FO **** the bed on the WR position. The OL has been a mess this year. MLF has been in over his head after losing two of his top offensive assistants. There's a lot of reasons the offense isn't performing. Rodgers can't fix all that on his own and I think he's just frustrated with it. That frustration is leading to a very cloudy headspace which is making things worse. 

The bigger question for me is this... Regardless of whether Rodgers is back next year or not, how are they going to fix all the other problems on this team? There's a host of issues on offense, without even getting into defense and special teams. This just isn't a championship caliber team with how it's built right now. Losing Rodgers doesn't somehow fix that. So, in ways, Rodgers is really the least of this teams issues as far as I'm concerned. 

[Toddfather]

1 hour ago, chefj85 said:

 

The bigger question for me is this... Regardless of whether Rodgers is back next year or not, how are they going to fix all the other problems on this team? There's a host of issues on offense, without even getting into defense and special teams. This just isn't a championship caliber team with how it's built right now. Losing Rodgers doesn't somehow fix that. So, in ways, Rodgers is really the least of this teams issues as far as I'm concerned. 

I wonder how they handle the cap hit? Dive on the sword, or actually try to stay competitive while dealing with it for a few years. I think you just swallow it one year and net a nice draft pick.

[chefj85]

1 minute ago, Toddfather said:

I wonder how they handle the cap hit? Dive on the sword, or actually try to stay competitive while dealing with it for a few years. I think you just swallow it one year and net a nice draft pick.

Yeah, I think you just get it over with. Don't prolong it.