Financially Assessing the Aaron Rodgers Trade

Michael Ginnitti
Michael Ginnitti, Managing Editor & NFL/MLB ExpertApril 25, 2023
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It was no longer a matter of if, but when Aaron Rodgers was going to be acquired by the New York Jets. That question has now been answered, as the Packers and Jets agreed to terms on a deal that will send the 39-year-old QB to NY for the 2023 season. Here’s how the contract has been affected via the move.

Note: At this point we’re assuming that no salary has been retained by Green Bay to facilitate this trade.

How the Trade Compensation Affects 2023 Financially

The Jets

  • Take on Aaron Rodgers’ $59.515M guarantee
  • Move down from #13 to #15 (saves $850,357)
  • Give up pick #42 (saves $4,219,261)
  • Give up #207, receive #170 (adds $96,707)

In short, the Jets will now owe $54.5M of cash in 2023 thanks to this deal. From a salary cap perspective, the draft pick movement frees up $1.77M for 2023, essentially lowering the Rodgers cap hit to $14.02M for the upcoming season.

 

The Packers

  • Relinquish $59.515M of guaranteed cash
  • Move up from #15 to #13 (adds $850,357)
  • Acquire pick #42 (adds $4,219,261)
  • Give up #170, adding #207 in return (saves $96,707)

In short, the Packers have saved themselves $54.5M of cash in 2023 thanks to this deal. From a salary cap perspective, Green Bay has added $10.5M to their 2023 books, thanks to the $40.3M of dead cap, moving up in the 1st round, and adding a 2nd round pick this week.

Green Bay's Dead Cap

Thanks to $7.6M of bonus proration from his 2018 contract, and another $32.6M from his 2022 roster bonus (treated as a signing bonus), Green Bay is left with a sizable $40,313,568 cap hit for the 2023 season.

Since the trade will be processed before June 1st, that entire amount will be taken on this season, with no further dead cap to be dealt with for the Packers. The $40.3M figure is actually $8.7M more than the original cap hit Aaron Rodgers held for the 2023 season. This move drops Green Bay’s Top 51 cap space down to an estimated $12.6M (still plenty to account for their now inflated draft class).

Largest Single Season Dead Cap Hit

  1. Matt Ryan (ATL, 2022): $40,525,000
  2. Aaron Rodgers (GB, 2023): $40,313,568
  3. Carson Wentz (PHI, 2021): $33,820608
  4. Russell Wilson (SEA, 2022): $26,000,000
  5. Jared Goff (LAR, 2021): $24,700,000

New York's Acquired Contract

Again, assuming no salary has been retained as part of this trade, the Jets acquire Aaron Rodgers on a 4 year, $144,765,000, with $59,515,000 fully guaranteed (all in 2023), and another $49.25M guaranteed for injury right now. VIEW THE FULL CONTRACT

2023
Base Salary: $1,165,000 (guaranteed league minimum)
Option Bonus: $58,300,000 (guaranteed, exercised as part of the trade)
Workout Bonus: $50,000 (guaranteed)
Cap Hit: $15,790,000

2024
Base Salary: $2,250,000 (injury guaranteed now, fully guarantees 2/16/2024) Option Bonus: $47,000,000 (injury guaranteed now, fully guarantees 2/16/2024)
Workout Bonus: $50,000
Cap Hit: $32,541,667

2025
Base Salary: $15,850,000
Roster Bonus: $5,000,000 (due 4/15/2025)
Workout Bonus: $50,000
Cap Hit: $51,141,667

2026
Base Salary: $10,000,000
Roster Bonus: $5,000,000 (due 4/15/2026)
Workout Bonus: $50,000
Cap Hit: $45,291,667

 

A Few Potential Out Scenarios

  1. Aaron Rodgers plays out the 2023 season, then retires (and can pass a physical)
    The Jets will have $43,725,000 of dead cap to deal with, thanks to the remaining 3 years of proration from the $58.3M option bonus that was exercised in 2023. They can choose to take all of that on in 2024, or wait to process his retirement until after June 1st, thus splitting that figure up into $14,575,000 for 2024, & $29,150,000 for 2025. Rodgers will be walking away from $49.3M of guaranteed cash in this scenario.
  2. Aaron Rodgers plays out 2023 then the Jets release him (he’s healthy enough to pass a physical in February)
    The Jets will have $43,725,000 of dead cap to deal with, thanks to the remaining 3 years of proration from the $58.3M option bonus that was exercised in 2023. Since $49.25M of 2024 compensation becomes fully guaranteed on February 16th, the Jets will need to release him prior to that date, thus taking on the full $43.725M hit in the 2024 season. It would represent the highest single season dead cap figure in NFL history.
  3. Aaron Rodgers plays out 2023 & 2024, then retires
    First let’s get this part out of the way: If Rodgers plays out the next two seasons, he’ll earn $108,815,000 for his efforts. It’s a staggering number for someone in their age 39 & 40 seasons, and for all intents - it’s the most likely scenario here as well (especially based on the draft compensation that was given up in the trade).

    From a cap perspective, the numbers don’t get much better here. Bonus proration from his 2023 & 2024 option bonuses will leave behind $60,483,334 of dead cap to the Jets after 2024. Assuming New York decides to make this a Post 6/1 retirement, that means $30,241,667 of 2025 dead cap, & $30,241,667 of 2026 dead cap.

Concluding Thoughts

Despite a trade package that suggests “more than a rental”, the Jets should be walking into this relationship thinking one-and-done - at least as it pertains to this contract.

New York has now signed up to relinquish:

  • 2 spots in the 2023 1st Round (13->15)
  • The #42 pick
  • A 2024 2nd or 1st Round pick
  • $54.5M cash

They hold the 7th best odds to win the 2023 Super Bowl, 4th best odds to win the AFC right now (Draftkings Sportsbook).

Both the Buccaneers and Rams put themselves in a scenario to win a championship immediately with their veteran QB. Both teams tried to run it back the year after, and saw massive loss on investment, with the mindset that they’re now playing with house money.

Of course, winning will make all of these questions much easier to answer. But if the Jets don’t win the 2023 Super Bowl, will they be inclined to run it all back in 2024? As the #3 scenario above shows, that currently means another $49M+ of cash, and over $60M of dead cap thereafter.

Will Rodgers perform well enough to put the Jets in a position to want to keep him in this contract? Will they flex their muscles and force him to restructure the deal to make their dead cap path a little easier after 2024? Will Rodgers make a decision before the February 16th vesting deadline for his 2024 compensation, or will the Jets have to make one for him?

If you think this trade means we can finally just get back to football with Aaron Rodgers - you’re incredibly wrong.


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