When Peter King broke the news that Tom Brady had signed a contract extension with the Patriots, he wrote that the "new contract with New England will pay [Brady] significantly less money than the market will bear, in large part to help the Patriots stay competitive for the next five seasons."

I was so moved by Brady's selflessness I almost started a pledge drive right here on BTB to help out good old Tom.

But then I decided to look at the contract in a little more detail instead. To understand how destitute Tom really is, you have to go back a while to when he signed a four-year, $72-million contract extension (with $48 million guaranteed) that runs through 2014. This is what that contract looked like:

Year Base Salary Various Bonuses Total Salary Prorated Signing Bonus Cap Hit 2012 5.75 6.25 12.0 3.2 15.2 2013 9.75 5.25 15.0 3.2 18.2 2014 9.75 5.25 15.0 3.2 18.2

Brady had received a $16 million signing bonus for the extension in 2010, which was prorated at $3.2 million over five years from 2010 to 2014. The contract also contained fairly large roster bonuses each year in addition to a relatively puny $0.25 million workout bonus (both summed up here under 'Various Bonuses'). In 2012, the contract already had a pretty big cap hit of $15.2 million, and the Patriots decided to restructure the contract to get some cap relief that year.

To do that, Brady's 2012 base salary was reduced to $950,000, with the leftover amount ($4.8 million) combined with the roster bonus ($6 million) and converted into a $10.8 million signing bonus. This new signing bonus was in turn prorated over the remaining three years of the contract at $3.6 million a year (on top of the $3.2 million proration from the previous extension). The whole thing looked as follows:

Year Base Salary Various Bonuses Total Salary Prorated Signing Bonus Cap Hit 2012 0.95 0.25 1.2 6.8 8.0 2013 9.75 5.25 15.0 6.8 21.8 2014 9.75 5.25 15.0 6.8 21.8

So while Brady's take-home money stayed the same at $12 million (0.95 Base salary, 0.25 workout bonus and the new 10.8 signing bonus) the cap hit for the Patriots changed. The Patriots lowered Brady's cap hit in 2012 by $7.2 million. But those $7.2 million now counted against the 2013 and 2014 cap.

So the Patriots had to get creative again for 2013. The first thing they did is extend Brady until 2017. Then they converted $3 million of Brady's 2013 salary into another signing bonus, prorated over five years at $0.6 million a year. This is on top of the $6.8 million unamortized signing bonuses already on the books in 2013 and 2014.

And then they did something highly unusual: They simply cut Brady's salary in 2013 and 2014 to get to a contract structure like this:

Year Base Salary Various Bonuses Total Salary Prorated Signing Bonus Cap Hit 2013 1.2 5.25 6.4* 7.2 13.8 2014 2.2 5.25 7.4 7.2 14.8 2015 7 5.4 12.4 0.6 13.0 2016 8 5.4 13.4 0.6 14.0 2017 9 5.4 14.4 0.6 15.0

*Remember, the take-home money is the total salary + the signing bonus, so Brady's take-home money will be 9.4 million in 2013.

What this contract means is that Brady will be taking home $16.8 million (6.4 + 3.0 + 7.4) in 2013-2014 versus the $30 million he would have gotten over the same period under his previous contract. Make no mistake about it, Brady took a major pay cut, regardless of what you may read or hear somewhere else.

So how do you get a star quarterback to agree to what looks like a significant pay cut? Do you appeal to the goodness of his heart? Do you ask him for a hometown discount? Do you threaten him with not re-signing Wes Welker and other Patriots free agents?

No. You simply guarantee the rest of his contract. The 35-year old Brady's new deal essentially converts his old deal into a five-year contract with $57 million guaranteed. And you know what that sounds like?

That sounds very much like the $60 million guaranteed that the 34-year Drew Brees got when he signed his five-year, $100 million contract. Or the $58 million ($18 million + $40 million contingent on a health check this offseason) the 36-year old Peyton Manning is guaranteed in Denver.

Be still my beating heart! That doesn't sound at all like Brady gave the Patriots any type of discount "to stay competitive".



As a quarterback in your mid-thirties, your primary concern in your last contract is the amount of guaranteed money you get. That's the hard coin in your contract negotiations. All the rest is just fluff some bleeding heart romantics can use to spin into a feelgood Hallmark story. Brady will get paid. And he will get paid at the exact level that befits his status as one of - if not the - top quarterbacks in the game. There is no discount here whatsoever.

Nice try, Peter King.

This contract also does two things for the NFL. On the one hand, it establishes a value for the top QBs in the league. Every other QB contract will be measured against and evaluated by this contract. On the other hand, and probably more importantly, it further cements the idea of guaranteed money as the true measure of a contract's worth, and defines it in such a way that these types of contracts can be managed in a cap friendly way. Because by guaranteeing money beyond the first year, you're largely doing away with the need for a signing bonus, and the signing bonuses are what gets you in cap hell in the first place (see Brady's $43.6 million combined cap hit in 2013 and 2014, prior to the latest contract extension).

Tony Romo will turn 33 in April. Like Brady, he'll probably be signing his last big NFL contract soon. And like Brady, he'll want to get as much of that contract as possible guaranteed. Brady went for $57 million guaranteed over five years. What'll it be for Tony Romo? Does $45 million guaranteed sound about right compared to Brady, Brees and Manning? Whatever contract number is announced at the end, watch for the guaranteed money part of the contract. That's what this contract negotiation will be about. Everything else is just fluff.