A 10-year, $100 million contract averages $10 million per year. Obviously, however, it doesn’t mean the employee will get $10 million every year.
As noted Friday, both here and in the PFT PM podcast, a decade-long deal provides plenty of space for creativity when it comes to crafting a perception that a coach is getting paid more than he is. And as it relates to the contract given by the Raiders to former and future coach Jon Gruden, the deal is backloaded, with less than $10 million per year being paid in the early years.
How much less? One league source said that my round-number example of $25 million over the first five years and $75 million over the final five years from PFT PM isn’t that far off the mark. More specifically, the source says the early years are much closer to $5 million annually than $10 million.
One big reason for that relates to state income tax. In California, where the Raiders will be at least for a year, the maximum rate is 13.3 percent. In Nevada, there is no state income tax.
The bigger question is whether and to what extent the deal is guaranteed. Surely, if Gruden has three or four non-playoff seasons and if the Raiders aren’t on the hook at Day One for anything after Year Four or Year Five, it would be a lot easier to act on any inclination to make another change.