The Mirage Of An NFL Contract Extension

Contract vs. Contract Extension

How you determine how much money a player is making per year depends on if he signed an extension or a contract. An extension is signed when a player still has a year or more left on his current deal. A contract is signed when a player has become a free agent or is about to become a free agent at the end of the league year.

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If a player signs a “contract” it is very easy to determine there APY (average per year) because is all you have to do is divide the number of years by the total dollar amount. When the player signs an “extension” you have to count in the remaining year(s) of his current deal to determine the APY.

For example we can take two current Seahawk contracts and explain the difference. Richard Sherman signed an extension for 4 years $56 million when he had one year left on his rookie contract. If you only look at the extension you would think that Sherman is making $14 million a year, but when you add the last year of his rookie deal into the equation it’s not so. He was set to make $1.431 million in the last year of his deal, when you add that to his extension you get a total dollar amount of $57.431 million. Then you divide that by five and you get an APY of $11,486,200.

Then you look at Michael Bennett’s contract which he signed as a free agent. He never actually made it to free agency but he was technically a free agent because his current contract had expired. His APY is much easier to determine because you just have to divide the years (four) by the total dollar amount ($28,500,000) and you get an APY of $7,125,000.

If Russell Wilson is indeed extended this off-season his deal would be considered an “extension”. This is important because it can determine how much his total compensation could be. Let’s look at some comps from the other quarterbacks in the league.

Aaron Rodgers is widely regarded as the best quarterback in the league, and when you look at just his extension, the highest paid player in the league as well. He signed a five-year extension in 2013 for $110 million. His APY from the extension is $22 million, but he had two years left on his previous deal. He was scheduled to make $9,750,000 in 2013 and $11,000,000 in 2014. Instead the Packers gave him an extension with a signing bonus of $33,250,000 and reduced his 2013 salary down to $4,500,000 and $900,000 in 2014.

So when you look at Rodgers deal as a whole, it’s not a five-year extension, it’s really a seven-year contract. The total money he is going to make over those seven years is $129,000,000. Now its easy math, when you divide those numbers you get an APY of $18,428,571. That’s pretty good money but he isn’t actually making $22 million a year as it appears.

Drew Brees signed a five-year $100 million extension with two years remaining but his final two years were voided essentially making his extension a contract.

Then there is Joe Flacco’s contract which he signed as a free agent. His is much easier to determine, you just divide his years (6) by total value ($120,600,000) and you get an APY of $20,100,000, higher than Brees and Rodgers. When you do this for some recent quarterback contracts/extensions it looks like this:

[table id=57 /]

Now Ndamukong Suh isn’t a quarterback but I just wanted to put it in their to show you the top contracts. You can see here that there is only two players that really average $20 million or more and that’s Drew Brees and Joe Flacco. So where should Russell Wilson’s future contract slide into this?

There has been reports that he was offered a contract of four-years $80 million. On the surface this looks like $20 million a year which would put him right at the top, but when you add the last year of his rookie deal it would essentially make it a five-year $81.5 million deal making his APY $16.3 million. That seems a little low for a guy who has been to two Super Bowls in his first three years. Danny O’Neil recently wrote a good article about this.

There has also been reports that Wilson wants to be the highest paid player in the league and by the sounds of it the Seahawks aren’t quite ready to do that at this stage of his career. If Wilson really wants to play hard ball they might have no choice. If he takes the Seahawks to another Super Bowl the price tag is only going to get higher.

One option they could come to is to just make him the highest paid player in the NFL and give him a four-year extension worth $92 million ($23 million per year). If you add the $1.5 million (2015 salary) to his extension and turn his four-year extension into a five-year contract this would make his APY $18.7 million. That would rank him fifth in actual APY and give him what he wants being the “highest paid player in the league”.

If there is an extension this off-season it will be very interesting to see what the final numbers are. Go hawks!

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