Aaron Rodgers and NFL contract 'rules'

March, 6, 2013
3/06/13
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The Baltimore Ravens have finalized their contract agreement with quarterback Joe Flacco, the record-setting details are out and now the sports business community has turned its attention to the Green Bay Packers and quarterback Aaron Rodgers. There is no evidence that negotiations have begun, but anticipation is growing for the extent to which Rodgers will eclipse Flacco's six-year, $120.6 million deal.

Pro Football Talk suggested the Packers "soon will take care of Rodgers," and CBSSports.com has reported he is unlikely to stage a holdout to force the Packers' hand. The story figures to remain a part of NFL offseason news, especially in the absence of games, training camp practices, mini-camps or even Organized Team Activities.

[+] EnlargeAaron Rodgers
Kevin Reece/Icon SMIPackers QB Aaron Rodgers, a Super Bowl MVP, NFL MVP and three-time Pro Bowl player, is scheduled to earn $9.75 million in 2013 and $11 million in 2014.
We've been discussing this issue since midway through Rodgers' MVP season in 2011. Even then, it was clear that he had far outperformed the six-year, $65 million contract he signed in October 2008. But that deal's post-2014 expiration eliminated any urgency the Packers might have felt to address it, and frankly, they would be within their rights to sit tight for another year. After all, the majority of NFL contracts are extended with one season (or less) remaining. Rodgers has two.

Flacco was a week away from free agency, or a pricy franchise tag, when he and the Ravens struck a deal. New Orleans Saints quarterback Drew Brees signed a five-year, $100 million contract last summer only after receiving a franchise tag. Typically, an NFL team would seek a market discount for extending a player with two years remaining. Would the Packers abandon that leverage and give Rodgers the richest contract in NFL history?

The answer for most players with two years remaining would be no. But it makes sense for the Packers to make an exception, for reasons that include, but are not limited to:

  • A contract is the only tangible representation of a team's commitment to a player, and right now the Packers' commitment is to pay Rodgers less than half of what the NFL's top quarterbacks are making. It doesn't matter how many times general manager Ted Thompson or coach Mike McCarthy offer Rodgers public praise. It sticks only when the commensurate financial figures are on paper. Like it or not, that's how business works. If management holds back, the employee has reason to wonder why.
  • Rodgers hasn't just outperformed a contract that calls for him to earn $9.75 million in 2013 and $11 million in 2014. His deal is so outdated that he isn't even the highest-paid quarterback in the NFC North. That distinction belongs to the Detroit Lions' Matthew Stafford ($12.5 million for 2013), and he is already in line for a new deal himself because of his $20.8 million salary cap number.
  • Without a new contract this offseason, Rodgers might not be the highest-paid player on his own team when the 2013 season begins. Linebacker Clay Matthews, who unlike Rodgers is entering the final year of his contract, might hold that title. An agreement between Matthews and the Packers could average $10 million annually. Again, operating under the assumption that contracts are the only tangible representation of commitment, what message would the Packers be sending if Matthews has a more lucrative contract than Rodgers?
  • The Packers assuredly don't want to set a precedent of renegotiating long-term contracts earlier than one year from expiration. But they could reasonably argue Rodgers as an exception, based on his position and performance as a Super Bowl MVP, an NFL MVP and three-time Pro Bowl player. Franchise quarterbacks have their own financial rules in the NFL. Agents for other players understand that.
  • If the Packers wait another year, chances are the quarterback market will only increase. Flacco, for example, received a bump from Brees' annual average. The difference -- $100,000 in each season -- won't break a bank. But it is a reminder that the market for elite quarterbacks never falls back.

The counterargument, of course, is that Rodgers knew what he was getting into when he signed a six-year deal midway through his first season as the Packers' starter. The benefit of a long-term deal is that it provides more guaranteed money, and the downside (for the player) is that it limits movement and pushes back the timing of the next contract. If Rodgers wasn't willing to accept the potential of several underpaid seasons, the argument goes, he could have declined the long-term deal.

In the end, the most relevant part of contract negotiations is whether they will cause an interruption in a player's career via holdout, trade or release. Based on Rodgers' public comments over the past 18 months or so, there appears little chance of that. Fans will breathe easier when this period is over, but as in the cases of Flacco, Brees, the New England Patriots' Tom Brady and others, an agreement will be reached in time.

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