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Explaining what Tom Brady's contract restructuring means

New England Patriots quarterback Tom Brady restructured his contract, as reported by ESPN NFL Insider Adam Schefter.

Here is what it means:

It creates cash-flow flexibility for the Patriots. On Saturday, the final three years of Brady’s contract -- $7 million in 2015, $8 million in 2016 and $9 million in 2017 -- became fully guaranteed for “skill.” When that happened, it required the Patriots to have a $24 million cash commitment on their budget, and by the end of March, the team would have had to have put that money up with the NFL because of league requirements. With Brady agreeing to change the guarantee from “skill” to only “injury,” it means the Patriots don’t have to do that. So the team gains cash-flow flexibility with this move. It does not affect the salary cap.

It helps the Patriots in other areas. They now have more ready cash. Thus, it potentially puts them in a position where they can get creative with some critical upcoming negotiations, as cornerback Darrelle Revis, safety Devin McCourty, left tackle Nate Solder (fifth-year option), running back Shane Vereen and kicker Stephen Gostkowski are some of the team’s notable players scheduled to be free agents after this season. In a situation where the Patriots could be competing against other teams for those players, the possibility of being able to commit more cash to them in the 2015 calendar year could be an advantage. To a lesser degree, but something that is also important to point out, the restructured contract allows the Patriots to release Brady without being committed to a full, $24 million guarantee. It’s hard to imagine them doing this, given that the contract has been widely viewed as a great value.

Brady gains in the exchange as well. As part of the restructure, the Patriots added $1 million to each of the base salaries in Brady’s contract, per a source. Brady will now get $8 million in 2015, $9 million in 2016 and $10 million in 2017. That is still a significant bargain for the team based on market rates. But more than that for Brady, what he hopefully gains is better players around him as the team can now spend more cash in 2015 on key players.

It's rare to see player and team working together like this. The restructuring reflects, from this viewpoint, a situation in which the team’s star player and management worked together on a deal that can be viewed as mutually beneficial. A situation like this doesn’t happen unless there are a few important factors in play, specifically a star player who isn't holding out for every last dollar, trust between key principles and an agent, Don Yee, who was at one time described by former Patriots executive Scott Pioli as one of the “most respectful and admirable people in the industry.” I see it as a situation that is especially rare in professional football, a result of both sides having an appreciation for a partnership that has been mostly beneficial for all involved in the past 15 years.