Brady reworks deal (again)

Titoschew

Member
SoSH Member
Jun 28, 2006
3,283
Chip Woolley's Trailer
Per Schefty on FB:
 
 
In a deal turned into NFL today, Tom Brady restructured his contract to give NE $24 million more in cash to spend this winter, per sources.
Under the new deal, Brady changed the $24 million in “skill” guarantee to only “injury” guarantee, meaning that Brady now would get the guaranteed money only if he were injured. Brady also now can be released from the Patriots without any liability, but he then would become an unrestricted free agent, free to command the type of guaranteed money he has agreed to surrender. This frees up cash for the Patriots to use on other players. New England needs the cash to help re-sign some of its own free agents such as Darrelle Revis, Devin McCourty, Nate Solder and Shane Vereen, amongst others.
 
 

PC Drunken Friar

Member
SoSH Member
Sep 12, 2003
14,542
South Boston
Holy shit. Can someone much more well versed in this type of thing put it in even more lay men's terms? Or, more directly, is this something that happens in the NFL often? What are the ramifications beyond next year?

And I hate myself for instantly thinking of "fuck you Mazz!!!"
 

Morgan's Magic Snowplow

Member
SoSH Member
Jul 2, 2006
22,345
Philadelphia
Brady is awesome.  I don't completely follow how this really helps the Patriots though.  Basically, as I understand it, his 2015-17 salaries would become fully guaranteed under his contract on the last day of the 2014 league season.  He's basically giving that up and making them only guaranteed for injury.  But his cap numbers aren't going to be lower, and the cash will still be paid out during the same time frames, so I don't really understand how this helps the team navigate free agency.  Maybe there is some kind of accounting thing going on that helps in that respect.  But its not clear to me why this change would make it easier for us to resign free agents.
 
Edit: SF121's post makes this more clear.  Basically, its just about cash on hand for business operations. 
 

bougrj1

Member
SoSH Member
Jul 14, 2005
190
Seriously, all of the Mike Florio's of the world who said that when he redid his deal last time it wasn't a big deal and he shouldn't get any credit because he'd get the all of the cash guaranteed, can suck a giant bag of dongs.
 

Stitch01

Member
SoSH Member
Jul 15, 2005
18,155
Boston
This saves cash, not cap space, correct?
 
Still helps, but not like suddenly $24MM more cap space.  Thought he might convert some salary to a bonus this offseason to free up a little space as well.
 

Ed Hillel

Wants to be startin somethin
SoSH Member
Dec 12, 2007
43,597
Here
Morgan's Magic Snowplow said:
Brady is awesome.  I don't completely follow how this really helps the Patriots though.  Basically, as I understand it, his 2015-17 salaries would become fully guaranteed under his contract on the last day of the 2014 league season.  He's basically giving that up and making them only guaranteed for injury.  But his cap numbers aren't going to be lower, and the cash will still be paid out during the same time frames, so I don't really understand how this helps the team navigate free agency.  Maybe there is some kind of accounting thing going on that helps in that respect.  But its not clear to me why this change would make it easier for us to resign free agents.
 
Edit: SF121's post makes this more clear.  Basically, its just about cash on hand for business operations. 
 
Isn't he kind of insane for doing this? Brady is giving up all of that security for cash spending? What's the major benefit to the team?
 


Thought he might convert some salary to a bonus this offseason to free up a little space as well.
 
I wonder if this is some prerequisite for essentially giving Brady an entire new contract to create space?
 

IdiotKicker

Member
SoSH Member
Nov 21, 2005
10,785
Somerville, MA
Stitch01 said:
This saves cash, not cap space, correct?
 
Still helps, but not like suddenly $24MM more cap space.  Thought he might convert some salary to a bonus this offseason to free up a little space as well.
 
Correct. Essentially what this means is that the Pats don't have to pay the $24 million to escrow up front. It doesn't really change anything in the overall cap picture, but if you do think you're going to need cash flow to pay an up-front bonus to someone else coughReviscough then it helps out with the actually dollars in that sense.
 

Stitch01

Member
SoSH Member
Jul 15, 2005
18,155
Boston
Brady has said in the past he'd retire if he sucked.  Im guessing if we got to the point where the Pats outright wanted to release Brady making $7-$9MM/year in a world where average QBs like Flacco, Cutler, and Dalton command multiples of that salary that he'd retire anyways. 
 
Also the sum total of the cash is about three months pay for Gisele.
 

Morgan's Magic Snowplow

Member
SoSH Member
Jul 2, 2006
22,345
Philadelphia
Ed Hillel said:
 
Isn't he kind of insane for doing this? Brady is giving up all of that security for cash spending? What's the major benefit to the team?
 
 
I'm sure there is some kind of wink wink deal with Kraft and Belichick  Also, he's basically uncuttable before 2017 anyway.
 
Don't get me wrong.  I think its great that Brady is willing to do whatever it takes to help the team.  But this little tweak to his deal doesn't seem like a huge deal to me, at least compared to signing such a massively below market deal in the first place.
 

Koufax

Well-Known Member
Lifetime Member
SoSH Member
Jul 15, 2005
5,936
So Brady has more cash on hand than Kraft?  Maybe his wife does.
 

IdiotKicker

Member
SoSH Member
Nov 21, 2005
10,785
Somerville, MA
Morgan's Magic Snowplow said:
 
I'm sure there is some kind of wink wink deal with Kraft and Belichick  Also, he's basically uncuttable before 2017 anyway.
 
Don't get me wrong.  I think its great that Brady is willing to do whatever it takes to help the team.  But this little tweak to his deal doesn't seem like a huge deal to me, at least compared to signing such a massively below market deal in the first place.
 
On a scale from 1-10, it's probably 6. But it's also something that a lot of other players wouldn't do this easily and this quietly. With how easy it already is for players to be cut, giving up guaranteed money is the last thing any of them want to do.
 

bankshot1

Member
SoSH Member
Feb 12, 2003
24,662
where I was last at
Saving the opportunity cost of $24MM (in a low-rate environment) for a $2 billion organization seems like a pretty modest benefit for the Pats.I'd bet something else is going on.
 

Ed Hillel

Wants to be startin somethin
SoSH Member
Dec 12, 2007
43,597
Here
Chuck Z said:
 
Correct. Essentially what this means is that the Pats don't have to pay the $24 million to escrow up front. It doesn't really change anything in the overall cap picture, but if you do think you're going to need cash flow to pay an up-front bonus to someone else coughReviscough then it helps out with the actually dollars in that sense.
 
Why are there rules preventing billionaire owners from being able to pay bonus money up front?
 

IdiotKicker

Member
SoSH Member
Nov 21, 2005
10,785
Somerville, MA
bankshot1 said:
Saving the opportunity cost of $24MM (in a low-rate environment) for a $2 billion organization seems like a pretty modest benefit for the Pats.I'd bet something else is going on.
 
Patriots revenue for last year was $428 million. So you're talking about deferring about 6% of revenue going out over a 12 month period instead of being due all at once. That's a pretty big deal to any business.
 

IdiotKicker

Member
SoSH Member
Nov 21, 2005
10,785
Somerville, MA
Ed Hillel said:
 
Why are there rules preventing billionaire owners from being able to pay bonus money up front?
 
Largely because "guaranteed for injury" provides a middle ground so that both players and owners can say they won the negotiation.
 

Otto

Well-Known Member
Lifetime Member
SoSH Member
Aug 30, 2001
1,736
Anytime, USA
Need more information about the new deal to say specifically, but generally speaking, any amounts guaranteed "for injury only" are not treated as fully guaranteed amounts (which are locked in from day one, spread over the years equally for cap purposes).  For example, a 2016 "injury only" guarantee won't affect the cap in 2015 - a 2016 fully guaranteed amount would.
 

Leather

given himself a skunk spot
SoSH Member
Jul 18, 2005
28,451
Chuck Z said:
 
Patriots revenue for last year was $428 million. So you're talking about deferring about 6% of revenue going out over a 12 month period instead of being due all at once. That's a pretty big deal to any business.
 
Hell, even if they simply invested the money, they'd probably earn about a Million on it.
 

bankshot1

Member
SoSH Member
Feb 12, 2003
24,662
where I was last at
Chuck Z said:
 
Patriots revenue for last year was $428 million. So you're talking about deferring about 6% of revenue going out over a 12 month period instead of being due all at once. That's a pretty big deal to any business.
They're going to spend the money ($24MM) over a short period of time. The real pick-up is the opportunity cost (interest lost) on the $24MM escrow amount.The savings in a low-rate environment (~2%) seems very modest. For an organization that probably has all sorts of bank lines and access to credit, freeing up this $24MM from escrow seem modest.
 

Ed Hillel

Wants to be startin somethin
SoSH Member
Dec 12, 2007
43,597
Here
Listening to WEEI, and Miguel is on hold while Nick from Weymouth just took about 5 minutes to ramble incoherently about how he doesn't like how the NFL is scheduled.
 
Miguel is on!
 

soxhop411

news aggravator
SoSH Member
Dec 4, 2009
46,279
“@BillSimmons: Here's the point - it's much easier for Pats to release TB this spring now. It was impossible if they paid him the 24m. This worries me.”

You are better then this Simmons.
 

Ed Hillel

Wants to be startin somethin
SoSH Member
Dec 12, 2007
43,597
Here
Miguel said he thinks Revis is going to get a gigantic bonus now, with smaller base salaries.
 

Darnell's Son

He's a machine.
Moderator
Lifetime Member
SoSH Member
Apr 23, 2010
9,532
Providence, RI
soxhop411 said:
“@BillSimmons: Here's the point - it's much easier for Pats to release TB this spring now. It was impossible if they paid him the 24m. This worries me.”

You are better then this Simmons.
He's really not though.
 

the1andonly3003

New Member
Jul 15, 2005
4,373
Chicago
So Patriots have cash flow problems and needed to do this? Expected a restructure to help the cap (unless it's crap according to one guy named Felger!)
 

Shelterdog

Well-Known Member
Lifetime Member
SoSH Member
Feb 19, 2002
15,375
New York City
soxhop411 said:
“@BillSimmons: Here's the point - it's much easier for Pats to release TB this spring now. It was impossible if they paid him the 24m. This worries me.”

You are better then this Simmons.
 
No he's not.
 
Anyhow, isn't the most logical explanation that they have a particular way they like to run their businesses (e.g., try to have positive cash flows every year or try not to use credit markets for normal operational expenses) and this fits into that model?
 

H78

Fists of Millennial Fury!
SoSH Member
Jul 22, 2009
4,613
I'm shocked he would give them this flexibility when the cash saved in the Mankins deal went directly into Kraft ' s pocket. All he's done is take a beating since the last time the owner decided against investing into the team, Mike.

/Mazz
 

Morgan's Magic Snowplow

Member
SoSH Member
Jul 2, 2006
22,345
Philadelphia
Chuck Z said:
 
On a scale from 1-10, it's probably 6. But it's also something that a lot of other players wouldn't do this easily and this quietly. With how easy it already is for players to be cut, giving up guaranteed money is the last thing any of them want to do.
 
That's true but Brady is a pretty unusual circumstance due to his relationship with ownership and importance to the franchise.
 
Put it this way: I doubt there is any real chance of him actually losing money in this deal.  He can't really be cut before 2017 for cap reasons, the chances of the Pats cutting him ever are almost nil for broader reasons related to his importance to the team, he has always said that he'd walk away from the game on his own terms if he was ready to leave (which would mean giving up his salary, guaranteed or not), and if somehow circumstances worked out that he was going to lose money because of accepting this restructure, there's a good chance that Kraft would find some way of making it up to him.  Giving up guaranteed money is still a very unusual thing to do but the circumstances with him are very unusual in general.  He's still fucking awesome for doing this.  Its just not really on the same level of awesomeness as signing his below market deal in the first place.
 
The best thing about this for me is that it suggests the team wants to back up the truck for Revis.
 

amarshal2

Member
SoSH Member
Oct 25, 2005
4,913
He and Tim Duncan really are brothers from another mother

Edit: I realize this changes nothing for Tom but always like to make the comparison
 

IdiotKicker

Member
SoSH Member
Nov 21, 2005
10,785
Somerville, MA
bankshot1 said:
They're going to spend the money ($24MM) over a short period of time. The real pick-up is the opportunity cost (interest lost) on the $24MM escrow amount.The savings in a low-rate environment (~2%) seems very modest. For an organization that probably has all sorts of bank lines and access to credit, freeing up this $24MM from escrow seem modest.
 
This is all about freeing up the cash due to escrow for bonuses for new contracts for Revis and McCourty. Freeing up 6% of yearly cash flow allows them to do that much more cleanly than if they had this all due at once.
 

IdiotKicker

Member
SoSH Member
Nov 21, 2005
10,785
Somerville, MA
Morgan's Magic Snowplow said:
 
That's true but Brady is a pretty unusual circumstance due to his relationship with ownership and importance to the franchise.
 
Put it this way: I doubt there is any real chance of him actually losing money in this deal.  He can't really be cut before 2017 for cap reasons, the chances of the Pats cutting him ever are almost nil for broader reasons related to his importance to the team, he has always said that he'd walk away from the game on his own terms if he was ready to leave (which would mean giving up his salary, guaranteed or not), and if somehow circumstances worked out that he was going to lose money because of accepting this restructure, there's a good chance that Kraft would find some way of making it up to him.  Giving up guaranteed money is still a very unusual thing to do but the circumstances with him are very unusual in general.  He's still fucking awesome for doing this.  Its just not really on the same level of awesomeness as signing his below market deal in the first place.
 
The best thing about this for me is that it suggests the team wants to back up the truck for Revis.
 
Yeah, I think this is about how I would go about explaining it. Your last sentence in particular is spot-on to what this actually means.
 

Shelterdog

Well-Known Member
Lifetime Member
SoSH Member
Feb 19, 2002
15,375
New York City
Chuck Z said:
 
This is all about freeing up the cash due to escrow for bonuses for new contracts for Revis and McCourty. Freeing up 6% of yearly cash flow allows them to do that much more cleanly than if they had this all due at once.
 
Don't forget the Solder extension we're all going to be bitching about in a couple of months.
 

bankshot1

Member
SoSH Member
Feb 12, 2003
24,662
where I was last at
Chuck Z said:
 
This is all about freeing up the cash due to escrow for bonuses for new contracts for Revis and McCourty. Freeing up 6% of yearly cash flow allows them to do that much more cleanly than if they had this all due at once.
 
Right-I said in my original post, that "something else is going on"
 
 

LoneWarrior1

Member
SoSH Member
Obviously I don't know the man, but I'd speculate that Brady's biggest motivation at this point, and for a while, is legacy. He wants to be remembered as the best QB that ever played the game and realizes that is dependent in large part on how many Super Bowls wins are attached to his name. While he wants to be paid relatively comparable to his talent level, I think he realizes that pushing for his personal max may come at the cost of his legacy. Right now, Brady is in the conversation for GOAT, but he's one short of Montana and staring down a 10 year Super Bowl drought. Moves like this one may increase his odds of closing those gaps.
 

Ed Hillel

Wants to be startin somethin
SoSH Member
Dec 12, 2007
43,597
Here
LoneWarrior1 said:
Obviously I don't know the man, but I'd speculate that Brady's biggest motivation at this point, and for a while, is legacy. He wants to be remembered as the best QB that ever played the game and realizes that is dependent in large part on how many Super Bowls wins are attached to his name. While he wants to be paid relatively comparable to his talent level, I think he realizes that pushing for his personal max may come at the cost of his legacy. Right now, Brady is in the conversation for GOAT, but he's one short of Montana and staring down a 10 year Super Bowl drought. Moves like this one may increase his odds of closing those gaps.
 

He should be in more commercials then.
 

Gunfighter 09

wants to be caribou ken
Moderator
SoSH Member
Jul 31, 2005
8,548
KPWT
But the downside for Brady, not the Pats, is suddenly Brady is tradeable, correct?  He now is only an $18M cap hit, which is pretty similar to what you see with a guy like Larry Fitzgerald, who will get traded. If I am interpreting this correct, I am sure BB must have assured Brady this won't happen. 
 

Shelterdog

Well-Known Member
Lifetime Member
SoSH Member
Feb 19, 2002
15,375
New York City
Ed Hillel said:
 

 

He should be in more commercials then.
 
 
I know you're kidding but he probably has to be picky about commercials (and his clothes and his hair and what he says in public) so his wife can continue making the real endorsement money.  I'm not sure Chanel hires women whose husbands hawk Papa John's.
 

Stitch01

Member
SoSH Member
Jul 15, 2005
18,155
Boston
Not sure it makes Brady more tradeable, the signing bonus money wouldn't have transferred to the new team anyways and the Pats would have to accelerate his $30MM signing bonus and take a huge cap hit this year (and a big but less huge one in '15 and a meaningful one in '16)
 
Honestly I think this is like a 1.5 out of 10 in terms of importance to the team.