Packers’ Structuring of Contracts Needs to Change

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Davante Adams: first down

As stingy as Green Bay Packers general manager Ted Thomson has the reputation of being, he sure hands out a lot of money to the team’s stars. The salary amounts, however, don’t bother me as much as the way the team tends to allocate its cap money.

A player’s cap hit is the amount the league counts in computing the cumulative salary paid out to players in any given year. For 2017, all NFL teams have $167 million of available cap space for player salaries.

As I wrote about previously, 40 percent of Green Bay’s 2017 cap is assigned to just five players: Aaron Rodgers, Clay Matthews, Randall Cobb, Jordy Nelson and Mike Daniels. It’s a problem. Below is a look at how some of the team’s top players have had their contracts structured.

The top four players are highlighted below. Numbers 5-10 are Mike Daniels ($10.4M cap hit), Bryan Bulaga ($7.85), Morgan Burnett ($7.0), David Bakhtiari ($6.0), Nick Perry ($5.9), and Martellus Bennett ($3.85).

Aaron Rodgers

His 2017 cap hit is $20.3 million, which is 11.6 percent of the cap. These numbers stem from the five-year $110 million deal Rodgers signed in 2015. His average salary over that period is $22 million. Despite now being 33 years old, Rodgers’ skills show no signs of being in decline, so this has proven to be an excellent deal for the team. In contrast, the Cowboys are about to release Tony Romo because Jerry Jones structured his contract with a cap hit of $24.7 million this year!

Clay Matthews

Matthews’ cap hit in 2017 is $15.1 million, 8.62 percent of the cap allotment. He’ll be 31 in May. Matthews signed a five-year deal in 2014 that averaged $13.2 million annually. Here are the approximate cap hits (in millions) for this contract, from 2014 through 2018: $11.0, $12.7, $13.75, $15.1, and $11.4. Few would argue that Matthews was worth $14 million in 2016 or that he’ll be worth more than $15 million this year.

This puts the team in the undesirable position of keeping Matthews and using over $15 million of cap space, or releasing or trading him. When salaries are this high, few teams would consider a trade. At the moment, there’s little talk of releasing Matthews. I really can’t tell you why the team structured his deal with such a high cap hit at the very time his performance would likely be eroding. Perhaps they expected him to have his last great year this year, which would explain why his cap hit drops almost $4 million next year. Bottom line: in 2017, this is one bad arrangement.

Randall Cobb

Cobb inked a four-year, $40 million deal in 2015, at an average salary of $10 million. This year’s cap hit is $12.7 million, 7.23 percent of cap. While Cobb in not in a decline due to age, he’s gone two consecutive years performing at the level of a $5 million receiver – not all of which is explained by injuries. His very high cap hit is certainly hindering the team’s ability to add high-quality players to the roster.

Jordy Nelson

With a cap hit of $11.55 million (6.6 percent of the cap), and an average salary of $9.8 million, Jordy’s four-year deal signed in 2015 is not excessive and isn’t hurting the overall roster situation at all. The NFL’s comeback player of the year is playing as well as ever.

Julius Peppers

In 2016, Peppers’ cap hit was $10.5 million, 6.82 percent of the cap. In the two years before that, it was $3.5 million and $12 million. Given these odd numbers, I don’t think the Packers originally had any intention of Peppers playing all three of his contracted years. Peppers lost his starting job to Nick Perry in 2016 and for the year he took only 57 percent of the defensive snaps. His 2016 cap hit was way out of proportion to his on-field production.

Josh Sitton

In 2015, as part of a six-year deal signed at the start of the 2011 season, Sitton’s cap hit was $7 million, about the same amount as his salary. In the case of both Sitton and T.J. Lang, I think Green Bay, sometime after contracting the two, radically re-evaluated the guard position and decided guards are worth about $5 million per year (salary or cap hit). Sitton is now making $7 million per year and has a cap hit of $6.8 million for the Bears.

Davante Adams

Adams’ cap hit in 2017 is $1.25 million. So why is he on this list? His rookie contract is up at the end of the year. The Packers like to get key players extended before their existing contracts run out and they’re able to test their marketability as free agents. They got this done regarding Mike Daniels and Jordy Nelson, but were not able to pull it off with Cobb.

It’s very likely the Packers intend to use some of the money they have left under the cap on extending Adams’ contract. Currently, Adams is making $983,000 per year. That number is bound to increase fivefold and the Packers are so infatuated with the guy, it could approach tenfold – which would put him in the vicinity of what Cobb is getting.

Given the way Packers leadership (including Aaron Rodgers) drools over Adams, I’d actually enjoy seeing Adams test the market. Opinions on Adams’ value vary so widely. I fear that the Packers will overpay Adams, otherwise. Of course, Adams also has to weigh his options carefully. If he has a mediocre year in 2017, that would mean he’s had one decent year out of four. If he has a better year than last year, it would mean two good years in a row, a player still on the ascendency, and those first two years would be all but forgotten.

I’m predicting Adams will either test out the free agent waters in 2018 or he’ll accept a very generous offer from the Packers. If the latter, Ted Thompson usually does these deals either just prior to the upcoming season (early September) or in December – when his fourth-year performance is largely on record.

About The Author

Rob is currently twiddling his thumbs on Whidbey Island in Washington. He likes to do research, although he has no shortage of opinions. He saw his first live Packers game in 1958, the only win of the year.

17 Comments on "Packers’ Structuring of Contracts Needs to Change"

  1. Carl M DeLuca

    Maybe you should become an NFL finance administrator and take over for Russ Ball since you seem to know more than him.

  2. PF4L

    Keep in mind, Bennetts cap hit will rise 4.7 mill. Perrys will rise 5.125 million. Bakhtiari will rise 6.029 million. That is some serious movement in 1 season. That’s a difference of almost 16 million in cap increase, for 3 players who are already under contract, in 1 year. That’s insane

    The TOTAL cap space for those 3 is an astonishing 30.4 million for 2018. that rises to 35.3 million for 2019. WOW!!
    Of course, Ted will be gone then so he won’t have to deal with it.

    It’s VERY possible that this will be Cobb’s and Mathews last season as the Packers can trim 20 million off the salary cap. The sad part is….16 million is already spent to cover the increase of Bennett, Perry, and Bakhtiari.

    The average fan doesn’t know the business side of these details. Some of those fans don’t understand why some fans criticize the Packers, or Ted, or whoever. It’s simple….the fans who criticize are more knowledgeable than the average fan. This is not a knock on the average fan, but it is what it is.

    So with the 5 players Rob mentioned, plus the 3 players i discussed…those 8 players will be occupying over 55-60% of the salary cap next season. 8 players?…That’s fucking suicide. Keep in mind, Mark Murphy is allegedly a “businessman”. But as he states, he doesn’t 2nd guess Ted Thompson. I guess it’s entirely possible that Murphy doesn’t even know any of this.

    Once again, Rob steps up to the plate and writes an article of substance that initiates intelligent dialogue.

    Ted went all in and over spent on Perry imo, if Perry doesn’t produce because of any reason, he looks like a moron. Despite a Super Bowl win, i think Ted Thompson is a train work of a General Manager. This team is in horrible shape. Fiscally and talent wise.

  3. icebowl

    “Once again, Rob steps up to the plate and writes an article of substance that initiates intelligent dialogue”….. totally agree…

    Good job Rob, good addition, yet scary research PF….

  4. icebowl

    “Once again, Rob steps up to the plate and writes an article of substance that initiates intelligent dialogue”….. totally agree…

    Good job Rob, good additional, yet unsettling research PF….

  5. Poppa San

    Okay, so you lay out the numbers and don’t offer alternatives besides “do something?” Would you say a healthy Sam Shields would not be worth his $10 million cap hit this past season or next season? I’ve seen many teams have balloon seasons at the end of the contract. Most release the players as cap casualties. Packers typically have a bare cupboard behind the player and are almost forced in to keeping an overpaid aging player. The last time I recall the Packers having a significant cap casualty was Darren Sharper. AJ Hawk renegotiated to keep playing.

  6. Mike

    “I really can’t tell you why the team structured his deal with such a high cap hit at the very time his performance would likely be eroding. Perhaps they expected him to have his last great year this year, which would explain why his cap hit drops almost $4 million next year. Bottom line: in 2017, this is one bad arrangement.”

    Really ????????

    You are putting up a blog post about NFL contracts and you don’t know why teams backload contracts. I’d suggest you read up a little about the subject first before this kind of post. Bit of research never hurts.

    1. There is an expectation that the salary cap will rise so its sensible to have bigger cap hits in future years.
    2. Backloading a contract means that you are able to cut a player towards the end of the contract and avoid having to pay a signifcant portion of it. If the player is still a stud at this point then you pay the 15m. If he has started to regress then you cut him with a relatively painless dead money hit. Signing this kind of contract is a win for the agent as they can shout about the big number they have negotiated. Its also a win for the team as if player regresses they can get out of the deal with a a big portion of it unpaid.

    Same with Cobb – he had a few cheap years followed by a hike in salary which the Packers don’t have to pay if he didn’t perform.

    So its pretty abundently obvious why the contracts have been structured like they have and the way they have been structured is pretty sensible. The question really is given that these contracts seem to have been structured so that if matthews regresses then the logical move is to cut (or re-work the player), why aren’t the players being cut ? Or being asked to take a pay cut ?

  7. Sal1961

    Ted should hang Mathews, Cobb and the other underachieving players on a available list during the draft to see what they get offered. You never know what desperate team will come running.

    • PF4L

      Might as well get something, because chances are, they might not be around next year being SCC. Especially if a new GM comes in.

  8. PF4L

    I agree with you on cutting the player, asking for a contract restructure, even possibly looking to trade.

    But Ted doesn’t do much of any of that. He has a tendency of holding on to overpaid, underperforming players. Unlike some other winning franchises.

    Rob’s article does have merit and you could learn from it if you opened your mind.. Rob isn’t just talking about an isolated player. His point being, the Packers have a collection of a handful of players, taking up too much cap space, some performing, some not. It’s sometimes not as simple as cutting players because their contracts are backloaded. Especially when they still have a lot of dead money you have to absorb.

    As i pointed out, this cap space is going to grow at an alarming level next season. And as Rob said, Adams will be looking for his big contract, and he’ll get it, further bloating the high level of cap space.

    Next season alone…Bakhtiari, Perry, and Bennett will use up over 30 million of cap space, now you add Rodgers – 21 million, Cobb – 12,7 million, Jordy – 12.5, Clay – 11.4 million, Bulaga – 8.3 million.

    That’s 95.9 million for 7 players. Think about it.

    You’re welcome.

  9. Packers

    For those of you wondering about what will happen with Ted Thompson:

    “Mark Murphy has made it abundantly clear that Ted Thompson will finish out his contract, which reportedly runs through the 2018 draft. So you’re going to have to hang on for bit longer, Randal.”

    It runs through the 2018 draft, which should be after next season. It doesn’t run through 2019 draft. Should be a interesting off season next year. Hopefully Wolf takes over.

    When the new GM comes, hopefully I hear players like Rodgers, Cobb, Bulaga, and Matthews take pay cuts so we can FINALLY sign big name free agents without overpaying. I also want the new GM to extend Haha Clinton-Dix but not overpay him.

    Hopefully the new GM (Wolf for example) can actually be better than Ted while #12 is still playing at a high level in his prime.

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