Packers sign Rodgers to a record-setting, five-year, $110 million extension
By Tom Silverstein of the Journal Sentinel
~Just as they did with Brett Favre 14 years ago, the Green Bay Packers have signed their franchise quarterback to a record-setting contract. An NFL source said Aaron Rodgers’ new deal announced this afternoon is worth $110 milllion over five years.
Rodgers, entering his ninth season with the Packers and sixth as starting quarterback, will speak to the media shortly, the club announced.
The $22 million average tops the $20 million per year the Baltimore Ravens gave quarterback Joe Flacco earlier this year.
The Packers recently signed linebacker Clay Matthews to a five-year, $66 million contract, the average of which will likely be just over half of what Rodgers is expected to receiver.
The two deals represent an unprecedented amount of money sunk into two players for the Packers organization, which is always claimed to be at a disadvantage due to being in a small market. But the Packers have been wildly profitable, even in the midst of a tough economy, and in 2011 netted a profit of $42.7 million.
(With $239 million in a reserve fund, the Packers have plenty of cash to handle the big contracts, which together will cost them $176 million over the next five years. They will shell out a large portion of that money in guarantees that are paid this years to both players, which will help them from a salary cap standpoint)
The Packers completed negotiations with Rodgers and his agent, David Dunn, this week after at least two months of talks aimed at securing Rodgers for the long-term. The new deal adds four years to the two years remaining on Rodgers’ current contract, which goes from expiring after the 2014 season to after the 2018 season.
Despite having two years left on his contract, the Packers felt they needed to sign Rodgers to a long-term extension that would bring his yearly income in line with the recent explosion in quarterback salaries.
In just the last five years, there have been six contracts worth $93 million or more given to NFL quarterbacks, three in the last two years that have averaged $19 million or more.
Two years ago, the Denver Broncos handed free agent Peyton Manning a five-year, $96 million contract ($19.2 million average) and New Orleans gave Drew Brees a five-year, $100 million deal ($20 million average).
Then in March, Super Bowl champion Baltimore made Joe Flacco the highest-paid player in the NFL by signing him to a six-year, $120.6 million contract.
All of that created the backdrop for negotiations with Rodgers, a three-time Pro Bowl selection, an MVP award winner and the MVP of Super Bowl XLV. Rodgers, who came into this season due to make $9.75 million, ranked around 10th among quarterbacks in average salary at $12.7 million.
Signing Rodgers to a $22 million-a-year deal assures the Packers that they will have their best player on board through the prime of his career.
When Favre signed a 10-year, $101.5 million deal in 1999, he was 31, two years the senior of Rodgers. Favre had been to two Super Bowls, won one of them, and been named league MVP three times, one as a co-winner with Detroit’s Barry Sanders.
Favre fulfilled seven of the 10 years on the contract before being traded to the New York Jets.
From a salary cap standpoint, the Favre deal worked out perfectly for the Packers because when Favre left the organization there was only $1.4 million of pro-rated signing bonus that needed to be accounted for. The Packers transitioned easily – at least financially – into the Rodgers era.
The enormous salary Rodgers will receive means he’s likely to account for about a fifth of the team’s entire salary cap. Until details of the contract are known, it’s unclear how much of the $17.779 million the Packers were under the cap was used on in the first year of the deal.
Even if a lot was devoted to this year, if Rodgers flames out or suffers a career-ending injury, the Packers’ cap situation will go from manageable to a catastrophic mess. If Rodgers remains healthy and productive, the enormity of the deal will still make it hard for Thompson to retain some of his own free agents or sign other teams’.
Flacco’s deal, for instance, calls for him to count $28.55 million against the cap in 2016 and $31.14 million in ’17. Brees’ deal calls for him to count $26.4 million against the cap in ’15 and $27.4 million in ’16.
The Packers will be counting on the salary cap going up after the 2015 season due to new television contracts going into effect. Some have predicted that the current collective bargaining agreement has set things up so that the increases will be gradual and there will be no huge jump down the road.
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