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Cracking the code on Calvin Johnson’s deal

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On Wednesday, the Lions extended the contract of receiver Calvin Johnson.  Initially reported as a seven-year, $132 million deal, this characterization overlooked the reality that:  (1) it covers eight years; and (2) Johnson already was due to earn $18.5 million in 2012.  Also, the report that Johnson will receive $60 million in guaranteed money is, as reports regarding guaranteed money usually are, inflated.

We heard last night that the numbers may have been grossly inflated.  Here’s the real story on the deal.

It’s an eight-year, $131.95 million contract.  Until, however, the team chooses to fully guarantee $3.5 million in base salary in 2018 and $3.5 million in base salary in 2019, the last two years will void, making it a six-year, $96.7 million deal.

So, basically, the last two years are phony, for now.

Factoring in the $18.5 million Johnson already was due to make in 2012 before the extension, it’s a seven-year, $113.45 million deal.  Dropping the phony-for-now base salaries for 2018 and 2019, it’s a five-year, $78.25 million contract.

Not eight (or seven) years and $132 million.  Five years, and $78.25 million.

Without the phony-for-now final two years, the contract has an average new-money value of $15.7 million.  If the Lions choose to buy back the last two years by guaranteeing $7 million total in salary, the new-money average increases to $16.2 million.

It gets more confusing than usual when trying to decipher the guaranteed money.  Before a non-guaranteed option bonus of $20 million is exercised in 2013, the deal has $48.75 million in fully guaranteed money (not including a $4.5 million roster bonus Johnson already has earned).  After the option is exercised (and including the $20 million option bonus), $37.25 million is fully guaranteed.

The $60 million in guaranteed money arises from a $16 million signing bonus, a fully-guaranteed base salary of $1.25 million, the $20 million non-guaranteed option bonus, and another $22.5 million in fully-guaranteed base salary that becomes guaranteed for injury only after the option bonus is paid.

Though not guaranteed, the option bonus undoubtedly will be paid, because until the option is paid the deal has $31.5 million in fully-guaranteed base salaries.  (It’s an excellent device for ensuring that the option bonus will be paid.)

For the Lions, the contract gives much-needed cap relief, dropping Johnson’s cap number from $21 million to $11.5 million in 2012.  The current cap number for 2013 is $12.2 million.  Ditto for 2014.

The cap number jumps to $19.7 million in 2015 and to $23.15 million in 2016.  It drops to $20.5 million in 2017.  With no remaining bonus allocation in the final two years, the cap numbers match the base salaries.

And now for the nuts and bolts of the deal . . . .

1.  Signing bonus:  $16 million.

2.  2012 base salary:  $1.25 million, fully guaranteed.

3.  2012 roster bonus:  $4.5 million.  (Earned under prior contract.)

4.  2013 option bonus:  $20 million.

5.  2013 base salary:  $5 million, fully guaranteed before option is paid, guaranteed for injury only after option is paid.

6.  2014 base salary:  $5 million, fully guaranteed before option is paid, guaranteed for injury only after option is paid.

7.  2015 base salary:  $12.5 million, fully guaranteed before option is paid, guaranteed for injury only after option is paid.

8.  2016 base salary:  $15.95 million, $9 million of which is fully guaranteed before option is paid, not guaranteed after option is paid.

9.  2017 base salary:  $16.5 million.

10.  2018 base salary:  $17 million, $3.5 million of which is fully guaranteed if the team buys back the last two years.

11.  2019 base salary:  $18.25 million, $3.5 million of which is fully guaranteed if the team buys back the last two years.

If you made it this far, congratulations.  You get a free one-year subscription to PFT.  And all the air you can breathe.

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54 Responses to “Cracking the code on Calvin Johnson’s deal”
  1. jacobslatter says: Mar 15, 2012 11:44 PM

    Man the Raiders really effed up by taking JaMarcus.

  2. noeffinway says: Mar 15, 2012 11:46 PM

    Megatron is also a super human!

  3. mikebe1 says: Mar 15, 2012 11:46 PM

    78 or 132 its still great money guy

  4. bucks12965 says: Mar 15, 2012 11:49 PM

    After reading all of this, I still don’t know how many reasons Megatron has to smile…but it’s a lot more than I’ll ever see.

  5. primetime0552 says: Mar 15, 2012 11:49 PM

    I have a headache. GO LIONS!

  6. johnnycash19 says: Mar 15, 2012 11:51 PM

    Wow, my head is spinning. So many numbers.

  7. noeffinway says: Mar 15, 2012 11:52 PM

    Hey Mike….how many guys you got crunching these numbers to make you look smart?

  8. tbf22 says: Mar 15, 2012 11:57 PM

    so if i read this right… he’s making almost $40M the first 2 years of this contract… hot damn.

  9. dumbasdirt says: Mar 16, 2012 12:01 AM

    My head is spinning like a top after reading this.

    So in English he will make more money in 1 year than the combined lifetime salary of every registered member of profootballtalk.com

    Now I understand it.

  10. racksie says: Mar 16, 2012 12:03 AM

    I have a headache. So do teams do this to trick these guy’s into thinking they are getting more money, or do they just like to see that huge number and not care about the reality of the deal?

  11. storebrandcookies says: Mar 16, 2012 12:06 AM

    All I know is that his grandchildren’s grandchildren will be set for life.

  12. andyreidisfat says: Mar 16, 2012 12:07 AM

    You keep saying the last two years are “phony”

  13. mmillensucks says: Mar 16, 2012 12:20 AM

    Thank you Calvin for thinking of the TEAM FIRST and not being like 98% of the other (diva) players in the league by holding out for more money. CJ and the Lions both knew this deal needed to get done quick to allow the team to pursue other FAs while still having some leftover for rookie signings. He went through a few crappy years but realizes he has the quarterback he wants throwing to him for the rest of his career.

    Still a year or so away from being NFC North champs, but gotta love where this team is now.

  14. funktron2x says: Mar 16, 2012 12:20 AM

    The non-guaranteed “phony” years on the deal are there for mutual benefit of both parties. Ultimately, in a deal like this, both sides want to commit to full contract, but acknowledge predicting the future that far in advance is folly. It leaves the door open for contingencies.

  15. mactimo says: Mar 16, 2012 12:21 AM

    I was told there’d be no math:/

  16. steeltuff says: Mar 16, 2012 12:23 AM

    Looks like it’s gonna cost more to buy a beer and a hot dog at Lions’ games.

  17. cuffhimbanano says: Mar 16, 2012 12:30 AM

    Science can build you a nuclear bomb, but Science cannot tell you if a nuclear bomb is a good thing or a bad thing.

    That’s what I take away from this article.

  18. fourthand20 says: Mar 16, 2012 12:30 AM

    And people complain about corporate executive’s salaries.

  19. yogikenobi says: Mar 16, 2012 12:30 AM

    This looks like a great deal for both sides…so I definitely must have read it wrong.

  20. glinksta says: Mar 16, 2012 12:33 AM

    MEMO TO 99% OF YOU POSTING….your not jim rome get a life

  21. huskersrock1 says: Mar 16, 2012 12:34 AM

    You said “grossly inflated” duh, huh, huh, huh, huh.

  22. bigmike7914 says: Mar 16, 2012 12:35 AM

    So the Redskins and Cowboys get punished for basically giving guys most of their money at signing, but the Lions are able to add phony years to contracts so the cap hit isn’t that bad, the NFL gets more and more crazier by the minute…smh

  23. ray0414 says: Mar 16, 2012 12:39 AM

    Calvin gave us a hometown discount,big time. He coulda gotten 20mill a year on open market. Hes a good guy that wants to win and is willing to sacrifice. TEAM PLAYER!

  24. wvfinfan says: Mar 16, 2012 12:44 AM

    No like most NFL Players, he will blow it on friends and family long before his grandchildren see any of it.

    He’ll be near bankrupt like Moss, and Owens.

    Money doesn’t make the smarter! They are generally to dump with money they higher a financial adviser who will screw them out of more money than he makes for Megatron…

  25. roamingabriel says: Mar 16, 2012 12:46 AM

    CNCL.

    Could Not Care Less……..

    Still stuck in Detroit………..

  26. movementarians says: Mar 16, 2012 12:49 AM

    Unless injuries mount by that point in his carrer, the lions would probably pick up the final two years of the contract. He will average slightly more than larry fitzgerald over the length of the contract. Also, by the time his salary escalates, the cap should be much higher. I would say that calling an option on the last two years is not the same as it being “phony.” Lets not get all crazy with hyperbole here.

  27. Soulman45 says: Mar 16, 2012 1:03 AM

    What are they doing with all that money he save the team?

  28. carryingweight says: Mar 16, 2012 1:26 AM

    Good signing clones.

  29. pturner81 says: Mar 16, 2012 1:28 AM

    This article is sweet. Thank you

  30. spasticpickle says: Mar 16, 2012 1:34 AM

    Wait a second, something’s not right here… You were just making it look like it was an 8-year contract.. The last two years of this contract are a phony! Hey everybody, the last two years of this contract are a big fat phony!

  31. funktron2x says: Mar 16, 2012 1:44 AM

    I’ll bet you a cookie Calvin and his intelligent, hard workin and level-headed family do not squander their riches. This aint your normal NFL player.

  32. phillyswagchamp says: Mar 16, 2012 1:53 AM

    @wvdinfan
    You are such a clown. Get a spell check before you spew your garbage constantly on this site. And also, Dolphins blow. So continue to type your nonsense about playoff teams and look retarded you bafoon. I also read that junk you posted about Desean not Deshawn Jackson earlier too. Does looking stupid ever get old to you?

  33. phillyswagchamp says: Mar 16, 2012 1:54 AM

    It’s hire not higher d bag

  34. gavriloprincip33 says: Mar 16, 2012 2:14 AM

    glinksta says:
    Mar 16, 2012 12:33 AM
    MEMO TO 99% OF YOU POSTING….your not jim rome get a life

    ————

    ha ha ha

    “You’re” not either…

  35. timegambit says: Mar 16, 2012 2:36 AM

    Unstoppable = Payday…in every business.

    I hate that he’s in my division, but he’s a mix of Randy Moss and Rob Gronkowski ….Unstoppable!

  36. fievel03 says: Mar 16, 2012 3:45 AM

    roamingabriel – You obviously cared enough to post a paltry attempt at being witty. “Still stuck in Detroit” had some weight as a negative for a long time up through the 0-16 season. Now it’s an honor to be “stuck” in Detroit. You may not like it, but it’s the fact of the matter now. Get used to it.

  37. edweird0 says: Mar 16, 2012 4:26 AM

    “Money doesn’t make the smarter! ”

    It sure as hell doesn’t…

  38. bboysho says: Mar 16, 2012 4:37 AM

    Like al Davis said calvin didn’t wen them a super bowl yet either mean yes I picked jr but the lions aren’t winning superbowls either

  39. kungfubillysims says: Mar 16, 2012 4:54 AM

    props once again fine sir. you are the master of breaking these things down. Is it cool if I call you MF Doom? It’s complementary.

  40. staffordsyear says: Mar 16, 2012 5:57 AM

    I suck at math..its like trying to decipher alien language for me,im just happy that calvins a lion for life!

  41. tramonisland says: Mar 16, 2012 5:59 AM

    @mmillensucks

    Sorry, but as long as I’m playing, your lions are a lot more than a year or so away from being NFC N champs buddy.

    -Aaron Rodgers

  42. truthserum4u says: Mar 16, 2012 6:19 AM

    Oh great! Now I’ve got this mess to clean up after my head just exploaded trying to follow all of that!

  43. jimbo75025 says: Mar 16, 2012 6:43 AM

    wvfinfan says:
    Mar 16, 2012 12:44 AM
    No like most NFL Players, he will blow it on friends and family long before his grandchildren see any of it.

    He’ll be near bankrupt like Moss, and Owens.

    Money doesn’t make the smarter! They are generally to dump with money they higher a financial adviser who will screw them out of more money than he makes for Megatron…

    ___________________

    I doubt it-Megatron seems like he has a decent head on his shoulders and comes from a strong family background. I haven’t heard any stories of him dropping 500K on bling have you? In addition, having gone to Georgia Tech, I can tell you that even the football players have to take accounting classes (mgt is the “easy” major there instead of engineering) so I would hope he learned something.

  44. renmasters says: Mar 16, 2012 6:55 AM

    Why are you factoring in the 18.5 for 2012? There is no guarantee the Lions were going to pay it so you can’t include it in your analysis.

    I’m glad most people stopped looking at your crap numbers in the first place.

  45. lionsfanatic84 says: Mar 16, 2012 7:06 AM

    Wvfinfan-
    Did u see the press conference, megatron is very humble, heck he was in casual attire to sign the one of the biggest NFL contracts ever.
    You must know as much about football as you do English…. its “hire a financial adviser” not “higher a financial advisor” lol

  46. wtfru2 says: Mar 16, 2012 7:18 AM

    Bet Randy Moss wishes he had been born 15 years later…

  47. Mr. Wright 212 says: Mar 16, 2012 7:56 AM

    wvfinfan says:
    Mar 16, 2012 12:44 AM
    No like most NFL Players, he will blow it on friends and family long before his grandchildren see any of it.

    He’ll be near bankrupt like Moss, and Owens.

    Money doesn’t make the smarter! They are generally to dump with money they higher a financial adviser who will screw them out of more money than he makes for Megatron…

    ———-

    Nor does posting here make YOU “the smarter”.

    And you need to “HIGHER” an English tutor.

    You holier than thou types make me wanna vomit.

  48. lks311 says: Mar 16, 2012 7:57 AM

    wvfinfan says:
    Mar 16, 2012 12:44 AM
    No like most NFL Players, he will blow it on friends and family long before his grandchildren see any of it.

    He’ll be near bankrupt like Moss, and Owens.

    Money doesn’t make the smarter! They are generally to dump with money they higher a financial adviser who will screw them out of more money than he makes for Megatron…
    ______________________________

    Maybe the dumbest post I’ve ever seen from someone trying to articulate how stupid players are. So poorly written that I’m hoping it was meant to be parody. But, my guess is, I’m giving you too much credit.

  49. lolb23 says: Mar 16, 2012 8:45 AM

    CNCL.

    Could Not Care Less……..

    Still stuck in Detroit………..
    ______________________________

    Could be worse. He could have been traded to the Rams!

  50. lionsplayoffs says: Mar 16, 2012 8:50 AM

    This makes him the 4th highest paid Detroit athlete then…behind Prince, Miggy and Verlander.

  51. cubear34 says: Mar 16, 2012 8:56 AM

    The cap is only 120.6 mil. That makes megaron taking roughly 15% of available cap space. Now add avril, suh, stafford etc. and it’s easy to see this team is going to have some cap trouble long before this contract expires.

  52. cowboysfan18 says: Mar 16, 2012 9:24 AM

    You tell’em wvfinfan, school is for fools. Yuo argh the most smartest guy eye no. I wood like to “higher” you to be my see Pee aye.

  53. fordman84 says: Mar 16, 2012 9:31 AM

    $16M signing bonus. That still floors me. So does that mean that he signs the contract yesterday or whenever, and this morning he saw a 16 and six zeroes behind it sitting in a checking account?

    Goodness gracious that is mind boggling.

  54. mjkelly77 says: Mar 16, 2012 9:42 AM

    Yada yada yada … Calvin’s a rich man.

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