What is the benefit of renewing a contract before it is expired?

[Brandon]

I don't understand the business up-side of doing this. So we want to lock Aaron Rodgers up obviously, get him in a long-term contract where he will undoubtedly be the highest paid player in the league. But why do it before his current contract is up?

I mean maybe it's just me, but the whole point of signing a contract is that no matter how good (or bad) you might be, you get what the contract says you get. So why pay Aaron Rodgers a ton of money now? Why not wait until next year and then sign him? Is he under-paid? Certainly.. but what's the point of a contract to begin with if you can change it at will?

It would be like me contracting a construction worker who I know nothing about, sign him on for $40.00/hr for 2 years, but low and behold he is a miracle worker with his hands and blue-print knowledge and he blows away my other workers. He wants a pay-raise and he's earned it, but hey, he's locked in for 2 years... his contract that he signed says so. I will happily give him double what he's making after those 2 years, and since he's locked into a contract he can't sign anywhere else.. so where is my motivation for paying him early?

 

[Brandon]

I don't understand the business up-side of doing this. So we want to lock Aaron Rodgers up obviously, get him in a long-term contract where he will undoubtedly be the highest paid player in the league. But why do it before his current contract is up?

I mean maybe it's just me, but the whole point of signing a contract is that no matter how good (or bad) you might be, you get what the contract says you get. So why pay Aaron Rodgers a ton of money now? Why not wait until next year and then sign him? Is he under-paid? Certainly.. but what's the point of a contract to begin with if you can change it at will?

It would be like me contracting a construction worker who I know nothing about, sign him on for $40.00/hr for 2 years, but low and behold he is a miracle worker with his hands and blue-print knowledge and he blows away my other workers. He wants a pay-raise and he's earned it, but hey, he's locked in for 2 years... his contract that he signed says so. I will happily give him double what he's making after those 2 years, and since he's locked into a contract he can't sign anywhere else.. so where is my motivation for paying him early?

Also I do realize that there is that potential that the player/worker might not 'appreciate' being under-paid for what they have done, but in the end it's still a contract that THEY SIGNED, so what business do they have arguing the terms?

 

[El Guapo]

These contracts aren't structured anything like a construction contract. You also have to realize that teams can cut players prior to the expiration of a contract, so you've got to know that this door swings both ways. Players are typically "bound" to contracts that they sign but also have leverage in terms of holdouts, public acrimony, etc. The restructuring of AJ Hawk's contract in the opposite direction demonstrates another facet of contracts as they exist in the NFL.

The word contract is a misnomer. They should actually be called Financial Agreements Subject To Change.

 

[metallicblaze]

Don't have to worry about someone else trying to sign the guy you want and/or need.

 

[Tbone]

You really want ARodg on the open market! If they don't sign him this season then there isn't a ton of incentive for him to sign next off season. The risk of injury in 32 games is much high than 16. For Aaron it's worth taking the money now just in case of injury. There would be a lot of teams willing to throw a ton of cash at Rodgers.

Also, TT likes to front load contracts; he did the same thing with Rodgers' previous contract. His cap number is 10 million this year and 11 next. To beat Flacco's contract they need to offer 6 years 122 million. My guess is the packers will give him another 12 this year and 12 next year. So 22 and 23 million the first two years. They'll then "only" have to pay him 17 or 18 the next couple of years. I really don't think he'll get much more than Flacco, 20 million is 17% of the cap.

They'll need 5 million for rookies which leaves another 5 for Clay. Now you start to see why TT is being cheap on the FA market.

 

[Raptorman]

Ask the Ravens front office. They now know for sure what the benefit is.

 

[HardRightEdge]

There's is no guaranteed money in the latter years of these contracts. Renegotiating into a new deal with fresh guaranteed money is a powerful incentive to the player. In Rodgers case, he's got 2 years left on his old deal. If he tears a rotator cuff, suffers a spinal injury, whatever, this season he might not see a single dime past his 2013 pay. That's a lot of exposure.

In return for an early deal and guaranteed money, the team expects to get a better deal than 2 years down the line in FA where there is open bidding. Or you hit him with the franchise tag and everybody is unhappy.

These re-negotiations are not some kind of gift or "thank you".

Another factor peculiar to this year and next is the big bump in salary cap expected in 2015 when the new TV deal revenues are supposed to kick in. Elite players' salaries expand into whatever cap is available or can be cleared. Locking up elite players before then would be prudent.

That said, if they couldn't get a deal done now it wouldn't be the end of world. Next offseason would be critical. Matthews is the more urgent matter; if he's not extended by opening day he just might hit the free agent market. If Matthews hit FA with no hamstring issues in 2013, he's looking at something approaching Mario Williams money.

 

[J Mills]

I don't understand the business up-side of doing this. So we want to lock Aaron Rodgers up obviously, get him in a long-term contract where he will undoubtedly be the highest paid player in the league. But why do it before his current contract is up?

I mean maybe it's just me, but the whole point of signing a contract is that no matter how good (or bad) you might be, you get what the contract says you get. So why pay Aaron Rodgers a ton of money now? Why not wait until next year and then sign him? Is he under-paid? Certainly.. but what's the point of a contract to begin with if you can change it at will?

It would be like me contracting a construction worker who I know nothing about, sign him on for $40.00/hr for 2 years, but low and behold he is a miracle worker with his hands and blue-print knowledge and he blows away my other workers. He wants a pay-raise and he's earned it, but hey, he's locked in for 2 years... his contract that he signed says so. I will happily give him double what he's making after those 2 years, an, since he's locked into a contract he can't sign anywhere else.. so where is my motivation for paying him early?

The longer you wait on Rodgers the more you are going to have to pay him. Look at the explosition in QB contracts. In Aug 2009 Eli signed a 6yr $97 million contract, 3.5 years later Joe Flacco gets 6yrs $120 million. When Matt Ryan's deal tops Flacco's it will drive up the market again. The sooner you lock him up the cheaper the contract will be in the long run.

 

[The_Virus]

Signing a player before the players contract expires benefits the team mainly because it takes Free Agency out of the picture. You DO NOT want a player like Rodgers sniffing on the open market.

 

[adambr2]

Signing a player before the players contract expires benefits the team mainly because it takes Free Agency out of the picture. You DO NOT want a player like Rodgers sniffing on the open market.

It would never happen, even if it got to that point. They would hit him with the exclusive rights tag and make sure he couldnt even talk to anyone else. But you definitely wouldnt want it to get to that point either way.