Matthew Stafford’s Contract Is an $80 Million Puzzle—Here’s How It Works
Decoding the Matthew Stafford contract.
Hey everyone, TC here,
We finally made it through the NFL offseason. That portion of the football calendar is always hectic. Preparing data for free agency, calculating contract data, inputting the date…then the draft class contracts (which are still on-going). It is a lot to say the least.
In today’s newsletter, I want to look at Matthew Stafford’s new two-year contract with the Los Angeles Rams.
Before the start of free agency in March, news broke that the Los Angeles Rams and quarterback Matthew Stafford had agreed to terms on a new contract. The details of the contract were not made available at the time of the story.
Turns out the two sides were hammering out the details on the contract. I am sure there was some vacation family time buried in the delay, but almost two months later, the contract was finally signed by both parties.
I have reviewed the contract, and here are the details.
The new money value is $80 million over two years with a total paper value of $84 million. Stafford has a fully guaranteed amount of $40 million at signing with the possibility of locking in another $40 million in 2026.
The contract does not include any upfront money, such as a signing bonus. The value of the contract will be earned through weekly or bi-weekly salary game checks.
Sounds pretty straightforward? Well, not really after digging into the details. The cash flow is pretty standard. The salary cap allocation of the cash is a whole different story.
For the 2025 league year, the contract contains 4 independent team options, and the same is in place for the 2026 league year. Each option can add one year to the contract strictly for salary cap purposes.
For the sake of clarity, on OverTheCap.com, we have the contract set up assuming all 8 of the options are exercised. The league office, management council, will view the contract in the same way until told otherwise.
Option Bonus Structure
Each option is due to be exercised by no later than “prior to the 1st regular season game”. Presumably, that would be the league day before the start of the regular season for the team.
Given this structure, the Rams can decide how many of the four options they will elect to activate. The number of options will determine the salary cap charge for Stafford in 2025, 2026, and 2027.
Essentially, the team can choose the cap number from four options.
From a cash flow perspective, for Stafford, the money flows into his bank account all the same regardless of whether Los Angeles elects to activate zero, one, or four of the options.
Each option is worth $6 million, to be paid concurrently with the base salary payments. AKA no up-front or lump sum payments to be made to Stafford upon activation of option years.
Below is an illustration of how the cap charge would change based on the number of options used each year.
Without any options, the contract is a two-year contract for $84 million through the 2026 season. Each option used adds one year to the contract.
Option #1 adds the 2027 year to the contract. Option #2 adds the 2028 year to the contract. Option #3 adds the 2029 year to the contract. You get the idea.
With each option worth $6 million, activation lowers Stafford’s base salary by the same $6 million. That $6 million is then treated like a signing bonus, prorated over the life of the contract (up to 5 years).
The Rams can choose their cap charge for Stafford, and will need to make that decision by no later than the day before the 1st regular season game. The expectation is that the team would utilize all 8 of the options, but if their situation changes, allowing a larger cap charge in the current year, then the team has the flexibility to do so.
For the sake of additional clarity, if an option is declined, each subsequent option bumps up one year.
Guarantee Structure
The contract contains $40 million in new money guaranteed at signing, excluding the $4 million roster bonus previously paid in March. Stafford, absent a default, will earn that $40 million.
Stafford can lock in the next $40 million for 2026 in March 2026. Specifically, the fifth day of the 2026 league year, which will likely land around March 16th.
There is one caveat. If Stafford elects to retire during the 2026 league year, even after his guarantee vests in March 2026, then his base salary would drop from $40 million to $2.1 million. And Stafford’s guarantee would become null and void, leaving him earning zero dollars in 2026.
2027 Contract Void
The last piece of this puzzle is the contract void. The Rams and Stafford agreed to a contract void in February 2027, specifically the 23rd day prior to the start of the 2027 league year. For reference, the start of the franchise tag period starts on the 22nd day.
If the Rams utilize all 8 options, the team will be left with a $33.6 million dead money charge for the 2027 league year as a result of the multiple option bonus proration.
Reminder, with OTC, we assume that all 8 options will be activated.
Summary
The takeaways with the Stafford contract are as follows:
Cash flow is the same regardless of option usage. Paid concurrently with base salary.
Salary cap charge for Stafford is dependent upon option usage. The expectation is for the Rams to utilize all 8 options.
All four options in 2025 are due by the day prior to the 1st regular season game for the 2025 season, and the same applies for the subsequent four options in 2026.
Each option is worth $6 million, and lowers the same year base salary by the same amount.
Stafford is guaranteed $40 million at signing, with another $40 million locking in come March 2026.
The contract will automatically void in February 2027.
The franchise tag will be available to the Rams for the 2027 league year.
Retirement during the 2026 league year will trigger a default of guarantees and a base salary curtailment down to $2.1 million.
Thanks for reading! See you next time.
-TC