Kicker Stephen Gostkowski's four-year contract extension through 2014, which according to an NFL source is worth around $3.5 million per season, is an example of what happens when both sides compromise.
For Gostkowski, he could have commanded more on the open market as an unrestricted free agent in 2011 (assuming free agency rules revert to what they were). Oakland's Sebastian Janikowski is the league's highest paid kicker at approximately $4 million per season, and Gostkowski could have potentially landed a similar deal next year if he was coming off a strong season.
But by going in on his extension one year early, and eliminating the risk of making it through another season healthy and that free-agency rules would change and make him an unrestricted free agent, Gostkowski knew his deal would come in a bit lower. That was the main part of his compromise.
Meanwhile, the Patriots had no urgency to complete a deal with Gostkowski at this time. He was under contract for $1.79 million and potentially could have remained under the team's control with the franchise tag next year (assuming there will be a tag). That was the club's main compromise in this situation, as the risk of Gostkowski remaining healthy now shifts to the team side.
This is the essence of how most deals in the NFL are struck.
Both sides give a little and find a middle ground.