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The Implications Of Nick Foles' Contract Extension

This week, Nick Foles was benched in favor of Case Keenum, who will start for the Rams in Baltimore this Sunday. If the Rams decide that Foles is not the long-term solution at the QB position, is the contract extension Foles was signed to in August a proverbial albatross around the Rams' salary cap neck?

Brace Hemmelgarn-USA TODAY Sports

Looking to gain a measure of stability at the QB position, the Rams extended Nick Foles' contract on August 8, 2015, without Foles having played a single game in a St. Louis Rams uniform. The extension involved the last year of his rookie contract (2015) and added two years with a potential worth of $24.5 million. This week, Foles was benched in favor of Case Keenum, who will start for the Rams in Baltimore this Sunday. If the Rams decide that Nick Foles is not the long-term solution at the QB position, is the contract extension a proverbial albatross around the Rams' salary cap neck?

Nick Foles' Contract Extension

The accompanying chart details the contract extension signed by Nick Foles in August:

Year Base Salary Prorated Bonus Roster Bonus Cap Hit Dead Money Savings
2015 1,022,000 1,000,000 2,020,000 4,042,000 12,022,000 -7,980,000
2016 1,750,000 1,000,000 6,000,000 8,750,000 8,000,000 750,000
2017 10,750,000 1,000,000 1,500,000 13,250,000 1,000,000 12,250,000

Contract Details

Foles' contract calls for $12.02 million in fully guaranteed earnings. His $1.02 million 2015 base salary, $3 million signing bonus plus a $2 million 2015 roster bonus and $6 million 2016 roster bonus are all fully guaranteed. Foles can earn an additional $4.5 million in playing time/performance incentives and also has the option of voiding his contract in 2017 (again based on playing time and performance). If on the roster, Foles' $1.75 million 2016 base salary becomes fully guaranteed on the 5th day of the new league year (March 20, 2016).

Contract Analysis

The Rams structured Foles' deal with only the short-term in mind. It's structured in such a manner as to create very little in the way of salary cap pressures beyond next season. All but $1 million of the contracts' guaranteed monies will be accounted for against the salary cap by the end of 2016. This was accomplished by front-loading the guaranteed money and eschewing a large signing bonus in favor of yearly roster bonuses and a small signing/prorated bonus. This approach is part of a league-wide trend among cap-savvy teams:

The Rams prefer this pay-as-you-go approach to contract structuring. It's a sure-fire method of avoiding "cap hell" in future years. Roster bonuses afford the Rams flexibility in managing their salary cap. They can be converted to prorated bonuses if the Rams need to create additional salary cap space. Signing/prorated bonuses, once paid, can not be altered, and can create the dreaded words "dead money". When re-signing/extending veteran players, prorated bonuses are the equivalent of financing part of a used car purchase by credit card.

Options For The Rams & The Bottom Line

The Rams have many options to consider when assessing Nick Foles' future with the team. Those options run the gamut from releasing Foles in the next couple of weeks to keeping him right through the 2017 season (and longer) (and many options in between).

The Rams remaining committed to Foles at least through the 2016 season is the most probable scenario. The Rams are unlikely to contemplate releasing/trading him before then. It allows the team another whole season to assess the long-term viability of Foles as their starting quarterback. Foles' salary cap hit is relatively modest for 2016 ($8.75 million) and the Rams could part ways with him after next season, counting only $1 million in dead money on the books. It also buys time for the Rams, allowing them to further assess both Case Keenum and Sean Mannion and/or acquire another quarterback through the 2016 NFL Draft. Foles' low-risk contract isn't a bad one for the Rams, especially when compared to other QB contracts around the NFL.

On the other end of the spectrum, the Rams could release Foles in the next couple of weeks, hoping that another team will pick up the remainder of his contract and all guaranteed money obligations. Of course, the Rams lose a potential starting-caliber QB if he's claimed. If he's not claimed, the remainder of his guaranteed and prorated money ($8 million) accelerates onto this years salary cap as dead money. The Rams simply don't have the salary cap space to accommodate and/or risk such a transaction occurring.

If the Rams release Foles in 2016, the salary cap savings would be minimal ($750,000). Foles' 2016 salary cap hit would be eliminated ($8.75 million); however, $8 million in dead money would offset all but $750,000 of the salary cap savings.

The Rams could attempt to trade Foles after the season (the 2015 trade deadline has already passed), but before the $6 million roster bonus is paid (March 18, 2016). The salary cap savings for 2016 would be $6.75 million (Foles' $8.75 million salary cap hit less $2 million in dead money). A team wanting to trade for Foles would go in with the knowledge that his 2016 base salary ($1.75 million) and roster bonus ($6 million) would be fully guaranteed, which may not be attractive to certain teams.

Case Keenum could have something to say about how the Rams' QB situation transpires, especially if he exceeds expectations for the remainder of the season.

My suspicion is we'll be seeing Nick Foles in a Rams uniform at least until the end of the 2016 season, although nothing is a sure thing when it comes to the Rams and quarterbacks.