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How Raiders QB Derek Carr’s mega-extension could affect Patriots QB Tom Brady in 2018

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The Patriots quarterback is likely to sign an extension next offseason.

The New England Patriots are a season away from meeting with QB Tom Brady to discuss a new contract extension. While Brady isn’t scheduled to be a free agent until after the 2019 season, the quarterback previously signed extensions with the Patriots with two-years remaining on his contract prior to the 2005 season, the 2013 season, and the 2016 season. That puts the 2018 offseason on notice.

Brady has only reached the final year of his deal on his original rookie contract in 2002 and again in 2010. Both times he signed a deal around the opening week of the year, never actually reaching free agency. And while there was tension from letting Brady reach the final year of his contract in 2010, it made sense as Brady was just one season removed from tearing his ACL at a point in history where that injury was a death knell for a career.

What this means is that barring injury or an incredible decline in production, Brady will negotiate a new extension after the 2017 season. And Brady and the Patriots both sat up in their chairs after the Oakland Raiders inked QB Derek Carr to a 5-year, $125 million contract with $70 million in guarantees and $40 million guaranteed at signing.

There is always a discussion around Brady taking less money from the Patriots than what he could get on the open market and there are certain truths to that. Part of the Patriots extending Brady a few years prior to free agency is that the team gets a discount of guaranteeing money for a player now in exchange for paying less overall. But Brady still gets solid contract values.

In 2005, with two years left on his contract, Brady restructured to become the 6th highest paid quarterback in the league. That one time Brady reached the final year of his contract in 2010, the Patriots had to give him a 4-year, $72 million deal that made him the highest paid player in the entire league.

And when Brady signed his latest 2-year extension for $41 million in new money, that $20.5 million per season (APY) trailed eight quarterbacks: Ravens QB Joe Flaccon ($22.1 million APY), Packers QB Aaron Rodgers ($22.0 million APY), Seahawks QB Russell Wilson ($21.9 million APY), Steelers QB Ben Roethlisberger ($21.9 million APY), Giants QB Eli Manning ($21.0 million APY), Chargers QB Philip Rivers ($20.8 million APY), Panthers QB Cam Newton ($20.8 million), and Falcons QB Matt Ryan ($20.8 million APY).

The difference between Brady and the top spot (a horrendous contract with Flacco) is $1.6 million- a drop in the salary bucket at this point in Brady’s career. And when you add in the reasons why the other non-Rodgers players received such big deals- Flacco’s cap hit was going to average nearly $30 million the next two years so he held all the leverage; everyone else was in the final year of their deal and got the same value bump that 2010 Brady received- and Brady’s early extension looks roughly in line with the top of the market.

Our own Brian Phillips did a great job of analyzing how Brady is currently the second-biggest bargain at quarterback in the NFL and the biggest bargain for a quarterback on a veteran contract. Brady is slated to have a cash flow of just $1 million in 2017 per his contract structure, although he received $14 million of his $28 million prior year signing bonus in March.

Brady and the Patriots have actually held discussions about a new extension to further boost Brady’s cash flow in 2017. After seeing the team hand out deals to TE Rob Gronkowski, WR Julian Edelman, and SS Patrick Chung, it’s not out of the question that the Patriots could simply add incentives to Brady’s 2017 deal.

But as his deal currently stands, Brady is tied with Mike Glennon for 19th in cap hit, ahead of only players on rookie deals, Tyrod Taylor, or journeymen like Josh McCown, and Brian Hoyer. In 2018 and 2019, Brady’s base salary spikes to $14 million and he enters the top ten cap hits at the position as his 2016 extension is realized.

Since Brady signed his latest extension, Carr, Colts QB Andrew Luck, and Saints QB Drew Brees have pushed the market at the position and there are more deals to come. We’ll definitely see a lot more $24-$25 million per year deals for quarterbacks with Kirk Cousins, Matthew Stafford, and Matt Ryan as in-the-prime quarterbacks due for new contracts over the next two years (they should see bigger paydays than Carr), and by the time Brady would be a free agent after the 2019, almost every current starting quarterback (other than Carr, Luck, Newton, Flacco, Bengals QB Andy Dalton, and Dolphins QB Ryan Tannehill) will be up for a new deals.

So while Brady won’t get Carr-level money, he’ll be in line for a deal that values him towards the top of the league and the fact that Carr signed his deal with a minimum of two years left of team control on the table (2017 rookie contract, 2018 franchise tag) actually makes Carr a better comparable than Cousins or Stafford in their final years.

If Brady puts together a season similar to 2016, it wouldn’t be a surprise to see him sign an extension in the $23-24 million per season range- but it’s important to remember that a lot of that value comes in the base salary for the extension years, which isn’t actually expected to be realized as a base salary.

In Brady’s 2010 extension, he was scheduled to have base salaries of $9.75 million in 2013 and 2014, a big spike over his projected $5.75 million base salaries in 2011 and 2012. Prior to the 2013 season, the Patriots signed Brady to a 3-year extension that included a reduction in 2013 and 2014 base salary to $1 million and $2 million, respectively. The extension included base salaries of $7 million, $8 million, and $9 million from 2015-17. Again, with two years left on his deal prior to the 2016 season, Brady signed an extension to reduce his 2016 and 2017 base salaries to $1 million.

So Brady’s final two base salaries can boost up his overall new money contract value with the understanding that it will be converted to a signing bonus at a future date if Brady is still playing at a high level; $16.5 million of base salary in 2013 and 2014 turned into a $30 million signing bonus in 2013, while $17 million of base salary in 2016 and 2017 turned into a $28 million signing bonus in 2016 (Brady previously restructured his contract to increase his base salaries in 2016 and 2017 by $1 million), with roughly a 75% premium in both cases.

In Brady’s case, that means if he is trying to convert $26 million of his projected $28 million in base salary over 2018 and 2019 into a signing bonus, leaving $1 million per season to serve as his base salaries, he could be in line for a $45 million signing bonus. If you slot Brady in for $14 million base salaries in 2020 and 2021, matching his current base salaries for 2018 and 2019, then the new money in Brady’s extension would be valued at $47 million, or $23.5 million APY, right on target.

But while it’s important to note the total value of Brady’s contract, it’s also important to remember that the Patriots are entering the end-game with Brady. If Brady stops being Brady and abruptly retires, the Patriots don’t want to be stuck with $40 million in dead cap space in 2019 (yes, they could use a post-June 1st designation to split the cap hit). So instead of converting the entire base salary into a signing bonus, perhaps they leave part of the salary in place as a roster bonus due in the March of each year.

There are plenty of options on how to structure Brady’s next deal, but Carr’s contract is the first of many that will potentially drive up the projected cost because even if Brady won’t receive the top dollar that he actually deserves, he’ll still sign a deal that places him towards the top of the league.