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Tom Brady’s Contract Details, Salary Cap Impact, and Bonuses

With Tom Brady playing as well as ever, what is his contract situation, and what happens to the Buccaneers’ salary cap if Brady retires?

Tom Brady's Contract Details, Salary Cap Impact, and Bonuses
LANDOVER, MARYLAND - JANUARY 09: Quarterback Tom Brady #12 of the Tampa Bay Buccaneers warms up before playing against the Washington Football Team at FedExField on January 09, 2021 in Landover, Maryland. (Photo by Patrick Smith/Getty Images)

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 this season.

Tom Brady 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 does 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 will increase to $26.63 million in 2021, due to likely-to-be earned incentives.

What is the impact of Tom Brady’s contract on the Buccaneers’ salary cap?

In 2021, Brady will count for 14.7 percent of the Buccaneers’ salary cap. The Buccaneers are currently projected to have over $30 million in cap space in 2021. However, with just 31 players under contract, they will need to add several players. That limits them somewhat when it comes to chasing marquee free agents.

Can the Buccaneers reduce Brady’s cap hit in 2021?

The short answer is that without an extension, there is nothing the Buccaneers can really do. They could release Brady, but they would hold $25 million in dead money, saving just $1.63 million. That seems unlikely, to say the least.

As 2021 will be the final year of Tom Brady’s contract, they cannot restructure the deal either. However, if both sides are comfortable, an extension is an option.

The Buccaneers could add an extra year to Brady’s deal. They could then shift the majority of the roster bonus and base salary into future seasons. They would likely have to guarantee all of that money and add to it to get Brady to agree. However, the possibility is there to save as much as $20 million on Brady’s cap number.

The other possible outcome for the Buccaneers and Brady is retirement. Let’s say Tamp Bay wins the Super Bowl this season. Brady may decide he has accomplished all he needs to in the NFL. What then happens to the Buccaneers’ salary cap? Would they be left with moderate dead money in the same way the Saints are with Drew Brees’ contract?

Would Brady retiring cripple the Buccaneers’ salary cap in 2021?

To answer this question, we have to go back to the lack of signing bonus in Tom Brady’s contract. At the time, that seemed intriguing. However, it now makes a lot of sense.

When a player receives a signing bonus, that money is prorated onto the cap across up to five years, or the length of the contract, if it is shorter.

Therefore, let’s say Brady had received a $20 million signing bonus. That money would count as $10 million in 2020 and $10 million in 2021. If Brady retired, that $10 million in 2021 would remain on the Buccaneers’ salary cap. They could request half of the money back, but they would not get cap relief (referred to as credits) until 2022 at the earliest.

However, because the Buccaneers instead gave Tom Brady two $10 million roster bonuses, they are protected. Brady can retire and effectively sacrifice all $25 million, assuming he retired before March 22 when the bonus is due. Brady gets that $10 million if he is cut, but not if he walks away voluntarily. Therefore, if Brady retires, the Buccaneers would carry absolutely zero in dead money in 2021.

The same goes for if Brady is traded. Brady does have a no-trade clause in his deal, as well as a no franchise/transition tag clause. Yet, if he wanted to be traded, he could waive that clause. With no signing bonus, all of the $26.63 million in Tom Brady’s current contract would go with him to the new team.

Tom Brady’s contract is perfect for Tampa Bay. If Brady remains, they are paying a QB still performing well just $26.63 million. If he decides to walk away, the Buccaneers can move on with no damage to their salary cap.

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