Tom Brady Gives Patriots A Favorable Contract

This story was interesting. Tom Brady gave the New England Patriots a favorable contract extension. By taking a lower salary, he gives the Patriots more cap room to sign other players.

The deal wasn’t completely one-sided. Tom Brady accepted less salary, but a higher amount is guaranteed.

In a salary cap league (NBA, NHL, NFL), when a superstar player signs a huge contract, that gives the team less money to sign other players. Most superstar players say “I want to win!” If winning is their sole concern, they should sign a minimum contract, so their team has cap room to sign other players. If a player worth $20M/year plays for the minimum salary, that gives his team a huge advantage. I’ve never seen a superstar player take a minimum contract, just so his team has cap room to sign other players.

Tom Brady took a lower salary than he might have earned otherwise, so that the Patriots can sign other players. The extension includes more guaranteed money, which is insurance if he gets injured.

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