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FORMULA 1
- PVF
- OLYMPICS
Understanding the Financial Ramifications of Tom Brady’s Retirement
Current Contract
Tom Brady’s contract has 1 year, $27.2M cash left, including a $20.2M cap figure for 2022. This includes an $8.925M base salary & $1.4M roster bonus, neither of which will be paid out now. It also includes $15M of signing bonus that was deferred from March 2021 to February 4th. We’ll get to this more in a moment.
Dead Cap Scenario
Brady’s contract carries $32M of dead cap for 2022, all of which would hit the Buccaneers cap table if the retirement is processed before June 1st. As this represents $12M of lost cap, this seems unlikely.
The most likely path forward is likely an immediate restructure to the remaining cash portion of this contract, reducing the base salary from $8.925M to $1.12M, removing the $1.4M roster bonus, and eliminating the $1.875M of likely to be earned incentives. This drops the cap figure from $20.2M, down to $9.12M. The Buccaneers will carry this cap hit on their active roster until June 1st, after which they can place Brady on the reserve/retired list.
By waiting until June, the Buccaneers will allow the $32M of dead cap to split up much more favorably across 2022 & 2023, to the tune of:
2022: $8M
2023: $24M
While the $24M dead cap hit for 2023 seems large (and it is), the NFL League Salary Cap is expected to rise immensely next season (and beyond) thanks to a huge influx of revenue from the recently agreed to Network/Streaming contracts.
The Original Signing Bonus
The only real point of financial contention with Tom Brady retiring is the $20M signing bonus, of which Tampa Bay now has the option of recouping a maximum of $16M from. If the Buccaneers go this route, Brady would be required to pay back $4M in each of the next 4 seasons (2022-2025), with Tampa Bay getting $4M of cap relief in each following respective season.
However, as noted above, $15M of that $20M signing bonus has yet to be paid out, so there’s a path for Tampa Bay to simply not pay this out, and move forward from here.
My two cents? It’s a big chunk of change, but a $16M parting gift to Tom Brady for choosing their franchise and immediately taking them to the promise land seems like pretty good optics and business for the organization.
Career Earnings
Brady's final earnings won't be fully known until we understand how the Buccaneers will treat the signing bonus. If they recoup all $16M, the $292.9M figure currently showing on Spotrac will actually drop to $291.9M. If Tampa Bay elects to pay out the entire bonus as a gesture, his final on-field earnings will increase to $307.9M, easily the most all-time (for a minute).
CATEGORIES
- NBA 93
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AUTHORS
- Michael Ginnitti NFL, MLB
- Keith Smith NBA
- Scott Allen Contributor
- Taylor Vincent NWSL
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