The Tim Tebow Contract
I rarely get emails that don’t involve someone asking me to hold millions of dollars for them while they find their way to the United States. Because of that, it surprised me when I got two this week with very similar questions. Both were from Tim Tebow fans wanting to know more about the former Florida star’s contract. Did he do well? Did the Denver Broncos treat him fairly? How does his deal compare to Sam Bradford’s? Things like that.
My initial thought is that Tebow did well for someone picked in his spot at his position. If you look at the incentives that were added to the contract, he may have done exceptionally well. The contract breaks down like this (courtesy of The Denver Post):
• From 2010 to 2013, his base salary is guaranteed each year: 2010: $1.295 million, 2011: $1.61875 million, 2012: $1.9425 million, 2013: $2.26675 million.
• In 2014, Tebow’s base salary is $2.5905 million of which $567,500 is guaranteed.
• Advances are worked in so Tebow actually receives portions of his base salaries ahead of time.
• If Tebow plays 35% of the Broncos snaps in 2010 or 45% in any of the remaining contract seasons, he’ll receive $1.5375 million. That bonus rolls over each year until he earns it.
• Although the five-year deal is actually valued at $9.7125 million, the above bonus is added in to get to the $11.25 million amount you’ve seen publicized. That $11.25 million can be doubled if Tebow plays 55% of the Broncos snaps in two of his first three seasons or 70% in 2013 and if Denver makes the playoffs and Tebow reaches certain milestones.
• There are additional milestones Tebow can reach to achieve a maximum contract value of $33 million.
At first glance, what he can achieve makes it a very desirable contact for the 25th pick in the draft. $33 million over five years is great for someone selected near the bottom of the first round, but it’ll be very hard for Tebow to reach some of those milestones. Because of that, we can’t really look at those at all. They’re bonuses. He can earn them, but he may not, so for argument’s sake they shouldn’t be part of the discussion.
Tebow’s contract is realistically this: five years, $9.7125 million. Denver will make every effort to turn him into an every down quarterback which means the additional $1.5375 million is extremely possible, but you never really know. If Tebow can’t make the transition to NFL QB, he may never see those snaps. Let’s hope that’s not the case. But the NFLPA includes that bonus in and typically does, so we’ll go with the $11.25 million. That and most first-rounders have similar bonuses which most of them earn.
There are two contracts to compare him to: last year’s #25 and Sam Bradford.
Last year’s 25th pick was Vontae Davis. The Miami Dolphins signed the cornerback to a five-year deal worth $10.25 million. Comparing Tebow to Davis and everything seems right on target. What Tebow got was what he should have based on the same draft spot one year later.
When you look at Sam Bradford’s deal with the St. Louis Rams (five years, $86 million with $50 million guaranteed), well, that’s where Tebow fans get upset. To them, Tebow is better the Bradford. But take the #15 glasses off for one second and think about it objectively. Bradford was a good quarterback in his own right. We may like the former Gator more than the former Sooner, but Bradford was quite the college QB himself. One that the NFL deemed worthy enough to be the #1 overall pick. And that’s where you have to end the comparison.
NFL teams base their rookie contracts heavily on what similar picks for the previous year signed for. Part of it is position – hence the reason Tebow got more bonus opportunities than a 25th selection at a different position may have received – but a lot weighs in to where you were picked. The second the Rams selected Bradford, it was easy to guess what his contract would be. Or at least be in the ballpark. You can compare Bradford at Oklahoma to Tebow at Florida. In a few years, you’ll be able to compare Bradford with St. Louis to Tebow with Denver. You can’t really compare the contracts. It’s the way the league works.
So as a Tebow fan there are a few things you can know and be comfortable about. He got a deal that was what we should have expected with the chance to earn a number of additional bonuses and he’s playing for a team and a coach that seem determined to give him every opportunity to succeed.