NFL: Mark Sanchez vs. Tim Tebow

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http://www.nydailynews.com/blogs/jets/20...-extension

Quote:Analyzing Mark Sanchez's three-year contract extension
BY MANISH MEHTA
The Jets announcement Friday night that they signed Mark Sanchez to a three-year extension opened plenty of eyes around the league. Why would the Jets extend a quarterback coming off a mediocre season with two years still remaining on his rookie contract?

A league source told the Daily News that Sanchez would earn $20.5 million in guarantees for 2012 and 2013. The fourth-year quarterback is set to earn $40.5 million over the final three years. The total value of his new-look five-year deal is $58.25 million.

Sanchez was going to be a $14.25 million hit on the cap before the extension. The team freed up $6.4 million in cap space this season, according to a detailed breakdown by http://www.profootballtalk.com.

Per PFT, Sanchez’s $11.75 million base salary for 2012 was converted to a $8 million signing bonus. A league source confirmed that Sanchez has a fully-guaranteed $3.25 million base salary for 2012. Sanchez will receive an $8.25 million fully guaranteed base salary in 2013, according to PFT. He has non-guaranteed base salaries from 2014-16.

Now, let’s take a closer look at the nuts and bolts of the deal:

1) Before the extension, the Jets had an $11.75 million investment for 2012 ($8.25 million base salary + $3.25 million in other bonuses) and a $6 million investment in 2013 ($4.5 million base salary and $1.5 million in bonuses). So, if Sanchez played the final two seasons under those terms, he would have earned $17.75 million.

2) Now, the Jets have guaranteed the $11.75 million that Sanchez was going to earn anyway in 2012 (Let’s face it: They weren’t going to cut him this season once it became apparent that Peyton Manning wasn't going to be a Jet) and guaranteed his 2013 salary. They also threw in an additional $2.75 million in guarantees in 2013 to increase the total guaranteed money for 2012 and 2013 to $20.5 million.

3) What do the Jets get in return? Well, the team received an additional three years in exchange for those guarantees in 2012 and 2013. Sanchez will earn $12.5 million/year over the final three years of this deal (not fully guaranteed), which would be below market value for a franchise quarterback in 2014, 2015 and 2016.

4) If Sanchez turns around his play over the next two seasons, the Jets will have an extremely favorable
deal for a very good starting quarterback in this league (12.5M/year for three years with the freedom to cut him at any point without worrying about any fully guaranteed salaries).

5) If Sanchez disappoints in 2012, the Jets may be able to trade him. They aren't necessarily locked into keeping him for the next two seasons. Why would anyone want to trade for Sanchez at that point? Well, teams would only have to make a $8.75 million commitment ($20.5M minus $11.75M paid in 2012) for a four-year contract. That could happen unless Sanchez regresses badly.

The Jets also certainly examined the free agent market for quarterbacks after the 2012 season before making this move. Matt Schaub is the headliner for a relatively thin 2013 free agent quarterback class. If Sanchez struggled in 2012, where would they turn? Would owner Woody Johnson agree to start over with a new quarterback in the 2013 draft?

So, the Jets decided that investing in Sanchez for 2013 would be the strategically sound course of action.

The worst case scenario for Gang Green: Sanchez regresses badly in 2012 and can’t be dealt after the season. If he underperforms again in 2013, the Jets could simply release him.

In short, the team gave Sanchez guaranteed money in 2013 and threw in a little extra cash ($2.75 million) in exchange for getting a potentially favorable deal from 2014-2016.

It’s a risk that the Jets’ braintrust was clearly willing to take.