After spending the first 20 years of his NFL career in New England, Tom Brady took the plunge and signed a contract with the Tampa Bay Buccaneers in the 2020 offseason. Let’s take a look at the contract Tom Brady signed, his impact on the Buccaneers’ salary cap in 2021, and what would happen if he decided to retire in 2022.
Tom Brady initially signed a two-year contract in Tampa Bay
In March of 2020, Tom Brady and the Buccaneers agreed to a two-year, $50 million contract. The contract was virtually fully guaranteed at signing, with a further $9 million available in incentives. Interestingly, there was no signing bonus in the contract, as the Buccaneers did things a bit differently.
How did Brady’s contract break down?
There is a nice symmetry to Tom Brady’s contract. Brady will earn $15 million in salary in both seasons, with a $10 million roster bonus. Three days after signing, Brady was paid his 2020 roster bonus, and at the same time, his 2021 roster bonus became guaranteed. In essence, Brady, therefore, received a $20 million signing bonus with $10 million deferred for a year.
In 2020, Brady counted $25 million against the cap. That was set to increase to $28.375 million in 2021, due to likely-to-be earned incentives.
On March 12, 2021 Brady and the Buccaneers agreed to a four-year contract extension that voids after one season.
What is the impact of Tom Brady’s contract on the Buccaneers’ salary cap?
In 2021, Brady was set to count for 14.7 percent of the Buccaneers’ salary cap. However, the Buccaneers made moves to reduce Brady’s cap hit prior to the 2021 NFL league year.
Can the Buccaneers reduce Brady’s cap hit in 2021?
The short answer is that without an extension, there was not a lot the Buccaneers could really do. They could have released Brady, but they would have held $25 million in dead money, saving just $3.375 million. That seemed unlikely, to say the least.
As 2021 was set to be the final year of Tom Brady’s contract, they could not simply restructure the deal. However, it appears as though both sides were comfortable with an extension.
The Buccaneers and Brady agreed to extend his stay in Tampa another year. This allowed them to shift the majority of the roster bonus and base salary into 2022 and beyond. The specifics of the deal are not yet fully known in terms of guaranteed money. However, we do not that Tom Brady’s new contract is a two-year deal worth $50 million, and contains three void years.
The Buccaneers utilized three void years in Tom Brady’s contract extension
Essentially the Buccaneers have added a third year onto Brady’s time in Tampa at a similar value to his first two ($25 million per year). Tom Pelissero reported that Brady is due to receive $41.075 million in cash in 2021. Additionally, the extension has saved $19.3 million against the cap for the Buccaneers. Therefore, the Buccaneers have reduced Brady’s salary to around the veteran minimum ($1.075 million). They have then given him a $40 million signing bonus, with the remaining $8.925 million set to be paid in 2022.
That signing bonus prorates across 2021, 2022, and the three void years (2023-2025). Therefore, the cap number in each individual season from that prorated bonus is $8 million. If we then add the $1.075 million in salary, Brady will count around $9.075 million against the Buccaneers salary cap in 2021. His cap number for 2022 is set to be $16.925 million as it stands.
Would Brady retiring cripple the Buccaneers’ salary cap in 2022?
This contract extension likely changes the relationship between Tom Brady and the Buccaneers. Brady could have walked away from the deal with Tampa and left little cap damage behind him. However, with this contract extension containing a signing bonus, it changes that significantly. There is a mechanism in the deal where if Brady were to retire, he would return $16 million of the cash from the signing bonus.
If Brady was now to retire after the 2021 season, he would leave at least $16 million in dead money in 2022. If Brady plays through the next two seasons and leaves when his contract voids ahead of the 2023 season, then he will leave behind $24 million in dead money in 2023.
For a team that prides itself on limiting dead money, they are certainly proving they are willing to do what they need to in order to go all-in on Tom Brady bringing them another Super Bowl or two.