Why Aaron Rodgers' contract limits Packers' options and what could come next

GREEN BAY, Wis. -- At the time, it seemed like an easy call: If Aaron Rodgers wanted to return to the Green Bay Packers for an 18th season -- and possibly a 19th and 20th -- then general manager Brian Gutekunst and contract negotiator Russ Ball would do the deal.

The result was a three-year, $150 million contract extension signed this past March that contained massive amounts of guaranteed money.

Even after the Packers’ fifth straight loss, a 15-9 defeat to the struggling Detroit Lions on Sunday, Rodgers said he has not second-guessed his decision to return.

“When I decided to come back, it was all-in, and I don’t make decisions and then hindsight, 20/20, have regrets about big decisions like that,” Rodgers said.

What if the Packers don’t feel the same way?

The team has some tough decisions to make in terms of Rodgers' future with the team, 2020 first-round quarterback Jordan Love and their salary cap due to the contract. Because of the intricacies of the deal, it would be difficult for the Packers to move on from Rodgers after this season if the decision were theirs alone -- especially if it were before June 1 of 2023.

That’s in large part because Rodgers has a $58.3 million option bonus in 2023 that is fully guaranteed. It’s an option because, according to a source familiar with the contract, it can be exercised by the Packers anytime between the first day of the 2023 league year in March and the day before the Packers’ first game of the regular season. The option bonus makes up most of his 2023 pay, totaling $59.515 million (including a $1.165 million base salary and a $50,000 offseason workout bonus). The timing is important because if the Packers were to trade him, they’d want the team that trades for him to pay it.

Then there’s the Love factor. The Packers must decide by May whether to exercise the quarterback’s fifth-year option for 2024 (which would be worth nearly $20 million fully guaranteed). Earlier this year, Gutekunst told the Green Bay Press-Gazette that it would be “very difficult to envision” a scenario in which Rodgers and Love are both on the roster in 2024.

Gutekunst and coach Matt LaFleur have not seen enough of Love in game action (42-of-71 for 484 yards, 2 TDs, 3 INTs in 8 games) to know whether he’s a viable replacement for Rodgers, whether it’s in 2023 or later.

“I think they have to play Jordan Love once they’re eliminated, and here’s why -- and it has a little something to do with my history with the Packers,” said ESPN NFL front-office insider Mike Tannenbaum, a former GM who’s perhaps best known to Packers fans for making the 2008 trade to bring Brett Favre to the Jets.

“I heard in [then-Packers scout] John Schneider’s voice and [then-Packers GM] Ted Thompson’s voice that they knew what they had in Aaron Rodgers when they were trading Favre to us.”

According to Tannenbaum, the worst-case scenario is not that Love isn’t a good player, it’s that he’s a good player for another team, which is why he said they need to know by the end of this season what they have in Love.

“At the end of the day, Brian and Matt, their responsibility is the next 10 years,” Tannenbaum said. “They’re not going to win the title this year, so as hard as it is to look Aaron Rodgers in the eye and say, ‘We’re benching you,’ the alternative is he comes back and they trade Jordan Love to [a team like] the Falcons for a third-round pick and Jordan Love is a consequential starter in the league for the next 10 years.

“Then Aaron graduates after the ’23 season, and now you’re sitting there with no hope, no plan, and your young quarterback, with whom this whole thing got started, is crushing it in Atlanta, which you can’t have happen.”

Here are the possible scenarios for Rodgers and the Packers, and how it would impact their salary cap:

Rodgers plays for the Packers next season

Because of the aforementioned option bonus and guaranteed money, it was widely assumed when Rodgers signed the deal that he would play through the 2023 season.

In 2024, his $49.25 million in salary and bonuses is guaranteed only against injury (and not a decline in skills or if he is released for salary-cap reasons). It would become fully guaranteed if he is on the Packers’ 90-man roster on the fifth day following the Super Bowl played after the 2023 regular season.

If the contract is not adjusted further, Rodgers would count $31,623,570 on the Packers’ 2023 salary cap, which is less than $3 million more than his cap charge this season. The option bonus would actually be paid in two installments: $28.3 million within 10 days of the option being exercised and $30 million on or before Sept. 30. The timing of the payments does not impact the cap charge.

Rodgers retires this offseason

This is the easiest -- but seemingly least likely -- scenario because Rodgers would forfeit the $58.3 million option bonus and any further compensation from the deal.

In the unlikely event Rodgers would walk away from that money, the Packers would likely keep him on the roster through June 1 for cap purposes. At that point, they could spread out the remaining proration of his signing bonus over the 2023 and 2024 salary caps, meaning his cap charge for next season would be slightly less than $16 million.

Two recent quarterback retirements were handled that way. Drew Brees retired in March 2021, but because his retirement did not become official until after June 1, the New Orleans Saints kept his $12.225 million charge on their 2021 cap through that day before it was reduced by $1.1 million after June 1. Ben Roethlisberger retired this past January, but his paperwork was expected to be delayed until after June 1 as well for the Pittsburgh Steelers’ cap purposes.

Rodgers gets released

This is the least likely scenario, especially before June 1, because they would still have to pay Rodgers the option bonus and his 2023 base salary.

They would also have to count more than $99 million in dead money on their 2023 cap, which is untenable. Waiting until after June 1 would actually provide a net salary-cap savings of $50,000, even though the dead-money hit would be more than $31.5 million in 2023 and more than double that in 2024.

It would also mean the Packers would receive no compensation (e.g., draft picks) if Rodgers were to play for another team after his release.

Rodgers gets traded

A trade would have similar ramifications for their salary cap to what would happen if the Packers cut Rodgers, depending on whether he were traded before or after the 2023 option bonus was exercised and whether it happened before or after June 1.

If the Packers trade him, they most likely would do it before they paid his option bonus. However, the team that acquired him would take on the remainder of his contract. Unlike when players are released before June 1 but can be designated as a post-June 1 release for cap purposes, trades consummated before June 1 cannot be counted as post-June 1 moves.

Just how much of a cap hit the Packers would take would depend on the timing of the deal, but according to OverTheCap.com, it would range from between $40.3 million (pre-June 1) and $15.8 million (post-June 1). In the post-June 1 scenario, the Packers also would have to count $24.4 million on their 2024 cap.

That’s why in 2021, the Atlanta Falcons waited until June 6 to trade receiver Julio Jones to the Tennessee Titans. It allowed Atlanta to split Jones’ dead money over two salary-cap years instead of one.

One source familiar with the contract believes the best way to trade Rodgers, especially before June 1, would be for a player with a similar contract because of all the dead money involved and suggested a player like Russell Wilson would fit that description.

“The only real way to trade him before June 1 is for another player with a bad contract,” the source said. “And that won’t happen.”