The contract between the Bears and quarterback Jay Cutler has been reported and is instructive in its value for the player and the Bears. Let’s take a look:

Signing Bonus: $7 million

Salaries
2009: $10M
2010: $7M
2011: $7.6M
2012: $7.7M
2013: $8.47M

Offseason Workout Bonus:
$500,000 per season 2010-2013

Term

The extension now runs through 2013, adding two years to the original term of Cutler's six-year rookie contract. Cutler and agent Bus Cook chose a shorter term rather than longer for good reason: Cutler's contract will expire at age 30, still a prime age for a quarterback.

Analysis: The relatively short term works for both sides, lessening the guarantee commitment (described below) from the Bears and allowing Cutler another shot at a new contract at a high-earning age. While some of the other young quarterbacks who have signed in the past couple years -- Aaron Rodgers, Matt Cassel, Eli Manning, Philip Rivers, Ben Roethlisberger -- have opted for longer-term deals with greater overall value, Cutler will be a free agent again sooner than any of them. Assuming his career continues to trend upward, the shorter term has potential value for Cutler.

Total Value:

All told, the contract worth is $49.77 million. That factors out to an APY (average per year) of $9.95 million.

Cutler was under contract at the time of the extension for almost three years, through 2011, with an amount of $20.467M left in potential value on the deal. Thus, the “new money” on the deal of the two added years is worth $29.337M, a new money APY of $14.7M per year.

Analysis: The $14.7M new money APY rivals that of the recent deal for Eli Manning, which set a new standard for APY. Manning, however, had only one year left on his deal.

The APY is more comparable to the Matt Cassel deal this year (Cassel had only one year on his contract but it was a franchise tag number) and the Aaron Rodgers deal of a year ago (Rodgers had almost two years left) than to the Manning and Philip Rivers deals earlier this year.

Guarantee

This is where the analysis gets interesting and a bit complicated.

Although $9.67M of Cutler’s 2009 salary is guaranteed, his existing salary of $670,000 was “functionally guaranteed,” meaning it is virtually impossible to not be earned, thus the true guarantee for this year is $9M. Calling this year’s salary guaranteed is still a bit of a stretch, as the chances of Cutler getting released are infinitesimal.

Proceeding, though, with $9M guaranteed in 2009, there is another $10.33M guaranteed between the initial signing bonus of $7M and the $3.33M of the $7M 2010 salary that is guaranteed. So in its best light, Cutler has a guarantee of $19.33M.
A couple of caveats, however. First, the 2010 guarantee is for skill only, meaning if Cutler were to suffer a career-ending injury this season and not be able to play again, the $3.33M will not be guaranteed since it’s not guaranteed for injury.

Also, Cutler previously had a $4M roster bonus in 2010 (as long as he played 70 percent of the plays in 2009) and a $12M roster bonus in 2011. Although neither was guaranteed, an argument could be made that the $16M is “functionally guaranteed,” meaning that the “true” guarantees of this new deal are not what they appear to be.

Analysis: Including this year’s large salary in the guarantee artificially inflates the number for the media and fans. However, that’s quite common among contracts with mega-guarantees, with year one salary guarantees now part of the equation.

What is certainly not common is the fact that Cutler had $16M in future bonuses as long as he was playing and on the roster next year and in 2011. That lessens the meaning of a true guarantee approaching $20M.

It’s true that Cutler could get hurt this season and not earn the $4M roster bonus next year. It’s also true that there could be a lockout in 2011 and his $12M bonus is in potential jeopardy. However, those scenarios, while plausible, are unlikely, making this guarantee appear a bit light under the circumstances.

The Cutler contract appears most comparable to one done almost exactly one year ago and given to Cutler’s present and future rival, Aaron Rodgers. Rodgers, after starting the first seven games of his career, received a six-year, $66M deal with $20M in guarantees, although more than half of that guaranteed amount came in the first year, where the chances of Rodgers not earning the money were miniscule.

An interesting twist about Cutler’s deal comparing so similarly to Rodgers is that not only are the two of them set for a rivalry for many years to come, but this deal was negotiated by Bus Cook, the agent for Brett Favre, the player who was replaced by Rodgers on the Packers and the recent recipient of a two-year, $25M contract with the Vikings. And that Rodgers, seven games into replacing Favre as the Packers quarterback, earned a contract extension that Favre’s agent and the Bears used as a model for another client of Cook’s, Jay Cutler, five games into his being the quarterback for the Bears. Quite an interesting web of relationships in the NFC North.

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