UPDATE: Field Yates has amended his previous report with new figures. These new figures, however, would seemingly put the Eagles in violation of the 30% Rule referenced in this piece. Accordingly, I’m unsure as to the validity of these figures, and/or the likelihood of new information.
Crunching numbers with more accurate information on Wentz' base salaries:— Field Yates (@FieldYates) June 12, 2019
That's $17M not accounted for in the original Tweet.
Also: the $16M is available via escalators, not incentives. https://t.co/OufQEJmCpN
Albert Breer of Sports Illustrated has also thrown his hat into the ring, providing some clarity here:
Here's SOME detail on the Carson Wentz deal ...— Albert Breer (@AlbertBreer) June 12, 2019
2019: $16.37M signing bonus, $720K base.
2020: $30M option, $8M roster bonus, $1.383M base.
2021: $10M roster bonus, $3.9M base (should jump to $15.4M).
2-year cash: $56.47M
3-year cash: $70.3M-$81.8M (likely $81.8M)
That jump from $3.9M to $15.4M is critical, as it would be expressed in terms of an escalator, not in base salary. The escalator does not factor into the calculations of the 30% Rule, as detailed below, and explained in more detail here.
'21 base jumps on "improvement escalator" ... That triggers if he or the team improves year-over-year in any one of a ton of categories, or he makes the Pro Bowl. If he doesn't hit for '21, he gets another shot for '22. (Should be easy for him to get it).— Albert Breer (@AlbertBreer) June 12, 2019
With the new considerations of A) escalator money as reported by Breer and B) base salary money reported by Yates, this is how we can currently view Carson Wentz’s contract:
Original story below.
Earlier this morning, Field Yates of ESPN dropped the first details we’ve seen of the Carson Wentz extension, since it was announced nearly a week ago:
Carson Wentz contract breakdown:— Field Yates (@FieldYates) June 12, 2019
Signing bonus: $16,367,683
Base salary/roster bonuses:
2020: $1.383M & $8M
2021: $3.9M & 10M
2022: $18.5M & $1K
2023: $18M & $5M
2024: $21M & $5M
Team option for 2020: $30M
This is a lot of data, and the structure is tricky. Let’s make sure we understand everything that’s happening here.
Remember, base salary can be either guaranteed or unguaranteed, and essentially informs the weekly game checks players receive. Roster bonus money can either be guaranteed for the year in which the bonus is activated, or prorated across the remaining years of the contract, depending on how the bonus is structured and guaranteed. That isn’t information we have yet, but roster bonuses are typically paid out in the year they’re achieved, so that’s how we will treat them.
As such, we can build out the bones of the contract with the yearly cap hits from those two items. Remember, there’s still residual signing bonus money on Carson’s 2019 year, from the rookie deal he signed when he was drafted.
Now, as is well-known by this point, signing bonus money is fully guaranteed, but is prorated across the course of the contract. However, there is a five-year limit on the proration of signing bonus money, and this contract spans the course of six seasons. So the proration of Carson’s signing bonus, which Field has as $16,367,683, will look like this:
The final item we have to consider is the 2020 option bonus, which can be easily misunderstood. The option bonus is a team option in the sense that the Eagles can technically choose where the money from the option goes: they could lump the entire $30M into the 2020 cap by denying the option, or they could prorate it by accepting the option.
In other words — and I want to make this very clear — the option does not make it any more likely that the Eagles will cut Carson Wentz after 2020. While that is is still objectively possible, it is extremely unlikely.
As a matter of fact, the option bonus is necessary for this contract to follow the CBA’s requirements for contracts that extend beyond the length of the current CBA. Let’s see what it looks like so we can investigate that rule.
In the immediate hysteria of a potential option year for Carson Wentz, two wonderful Twitter follows for cap items — Ian Whetstone and Sam Lynch, who is an Eagles guy specifically — pointed out how the option’s construction works with the CBA guidelines.
I have seen people who are concerned about Wentz's option bonus in 2020. These are just the second stage of two-stage signing bonuses; they are fully guaranteed. These have been standard parts of contracts for decades now. Donovan McNabb had one in his 2002 extension for example.— Sam Lynch (@shlynch) June 12, 2019
Sam highlights something that’s been done for quite a while now in contract management, and has been especially utilized by Roseman in recent contract negotiations. As I discussed in my piece on Roseman’s construction of the Winning Window, Roseman uses option years to create what are, as Sam says, two-stage signing bonuses.
Remember, as I said above, there is a five-year limit on the proration of bonus money — on this six-year deal, constructing an option bonus in Year 2 allows for further prorated money in years with potentially much larger cap ceilings, and allows the Eagles to keep 2019 and 2020 cap hits down.
Jason Kelce was used as the example contract in that piece, but Brandon Graham and Fletcher Cox also have option years in their contracts, as well as DeSean Jackson, Malik Jackson, and Isaac Seumalo.
As Ian points out, this option bonus also helps the Eagles follow what is called the 30% rule. In his words:
I crunched the numbers, it's definitely a 30% Rule maneuver. The payouts past 2020 barely fit under the rule, and wouldn't without that $6M option proration in 2020 boosting the maximum.— Ian Whetstone (@IanWhetstone) June 12, 2019
The 30% Rule is a structure that manages some of the hypothetical spending-spree hysteria of the end of the CBA — it was an important mechanism during the 2010 uncapped year. It dictates that the yearly salary of a contract signed through the final year of an existing CBA cannot have an annual increase of more than 30% of the salary of the final capped year.
Everything in the contract goes into the calculations of the 30% Rule, save for signing bonus. So, when we look at Carson Wentz’s deal within the context of the 30% Rule, we exclude his signing bonus, but include his option bonus in the calculations. This can help us understand why Carson has such a huge option bonus in 2020 — it allows his contract growth to fit underneath the 30% Rule’s ceiling. Note: escalators and incentives are also not considered in these 30% Rule calculations, so we can disregard them for now.
Let’s calculate out Carson’s 30% limit, shall we? The final capped year of his contract is in 2020, so his 30% figure is set at 30% of the sum of his base salary ($1.383M), roster bonus ($8M), and, critically, his option bonus ($6M).
So $4,6114,900 is the magic number — that’s the limit on how much Carson’s contract can increase yearly.
So, if not for the $6M option bonus in 2020, the sum of Base Salary + Roster/Option Bonus could only grow yearly by a rate of $2,814,900 for its duration. This would put the Eagles in a tough bind, as they would have had to greatly increased Carson Wentz’s signing bonus (thus adding to the 2019 cap hit) and added a ton of escalators into 2024, to create a contract that Carson’s camp would have agreed to.
If you look at the difference in cap hits throughout Carson’s current contract structure, you can see how this $4.611M figure dictates the contract growth. From 2020 to 2021, Carson’s contract grows by $4.517M. From 2021 to 2022 it grows by $4.601M. From 2022 to 2023, it grows by $4.499M.
If the Eagles were to deny the option bonus — which again, they will not — that $30M hit in 2020 would massively balloon the 30% rule ceiling, yes — but all of the subsequent cap figures would be tiny in comparison. 2020 is not currently an uncapped year, so it is unreasonable to expect the Eagles would pour a huge cap figure into that year arbitrarily.
We do not yet know where Carson Wentz’s $16M in cap incentives are located, and how they are to be earned. Incentives can be Likely To Be Earned (LTBE) or Not Likely To Be Earned (NLTBE), and how they count against the cap is calculated according to those designators that we do not yet have.
As such, this is the best image of Carson Wentz’s contract that we have.
As it seems, he won’t count more than $30M against the cap until 2023, [EDIT: Given the new numbers reported in the update above, Carson’s extension is now over $30M starting in 2021. The chart below reflects the updated contract.] at which time we should expect many more QB contracts with an average/year at or above that number. Like most of Howie’s contracts, this deal is structured to create/preserve cap space in 2019 and 2020, as the Eagles look to load their roster for another Super Bowl run.
Special thanks again to Ian Whetstone and Sam Lynch for walking me through some of those cap snarls. Give ‘em a follow on Twitter!