I agree with a reader from the UK who suggested that the Packers should be able reach a fair and equitable extension of Davante Adams while saving some salary cap space.  For this exercise, I shall assume that the Packers want to extend Adams and can agree on his overall compensation.  Bruce Irons in his recent article explained why the Packers might not extend Adams and readers added more reasons (pro and con) in the comment section.  

So, how might Adams's contract look?  The parameters seem pretty clear, other than Adams' overall amount of compensation.  Adams looks better than the $20 million per year players like Keenan Allen and Amari Cooper ($40M fully guaranteed), though both signed a year ago.  Michael Thomas signed two years ago ($19.25M with $34.5M fully guaranteed but really more - he has a rolling guarantee under which his 2022 base salary of $15.3M becomes fully guaranteed in March of 2021), so his AAV should be adjusted higher.  DeAndre Hopkins is listed at $27.5M AAV, but that is subject to some debate.  Arizona has an out so his deal really is for 3 years and $60.1M.  When he was traded he had three years remaining that paid him almost $40M.  If Hopkins plays out the contract he will earn $94M over 5 years, or about $18.8M per year.  Julio Jones earns $22M AAV, with a staggering $64M of his $66M extension fully guaranteed.  I will use a $22M AAV for Adams: it could be higher but it could easily be less.

Here are the parameters and some goals of the Packers:

• Reduce Adams' salary cap number for 2021
• Limit Adams' combined salary cap numbers for 2021 and 2022
• 4-year extension (ages 30 to 33 for Adams)
• Provide a reasonable out after three additional seasons
• Adams is scheduled to receive $13.25M in cash for 2021

Adams receives an $11.175 signing bonus in 2021, the minimum base salary plus the same game active and workout bonuses so that he receives $13.25M in cash as previously scheduled for 2021.  The new signing bonus proration is $2.235M per year, shown above as $5.835M in 2021 due to a pre-existing proration of $3.6M.  That saves $8.88M on the 2021 salary cap, a useful amount since it means that the Packers would not have to disturb the contracts of Rodgers or Lowry if they are disinclined to do so.

I see no reason why Adams should not expect a substantial signing bonus in line with the $30M bonus Bakhtiari received.  Here, he would receive a $28M option bonus in 2021 ($7M prorations), which would be guaranteed.  The primary benefits of this structure are the low cap hits in general early in the contract, particularly in 2021 and 2022 which feature a combined cap hit of just $23.295M for the first two seasons. At present, Adams' cap number is $16.787M.

Here is a more traditional structure:

This looks a lot better but I do not know if Adams would sign it because it is light on cash flow (see table below).  This contract pays Adams $6M less than the contract above in the critical first three years.  It is a covid year, yet elite players are still getting paid, and fairly normally.  It generates just $5.112M in cap savings this year, meaning the Packers still have to find another $2.5M in cap savings, more if the team wants to sign a September cap casualty.  Adams' two-year cap numbers would total $25.64M, but if I have to add $6M in cash to the first three years (at least it can be subtracted it from the last two years), the two-year combined cap number total climbs higher.  The six million could be added to the signing bonus, added as a roster bonus in 2022 or 2023 (if the agent agrees), or by adding $2 million to each base salary for 2021 through 2023.  

A word about cash flow and the progression of the percentage of AAV accounted for in each season by the Packers in other large contracts.  Cash flow (CF) is the running or cumulative percentage of the total value of the contract earned by the the player by year.  The next number is percentage of AAV in each season.  Here are those numbers for the original contracts (not the recently restructured deals) for Preston and ZaDarius Smith, plus Amos and the two above proposed for Adams:

As can be seen, the cash flow lags in the traditional contract structure for Adams.  However, it is very important to players.  Consider this quote from an article in Overthecap: "most contracts of three years or more fail to last beyond two seasons, with the odds of the contract being terminated after just one season being greater than the contract being fully completed."

It is possible that Adams believes that he is the best wide receiver in the NFL and that the highest paid receivers $27.5M AAV.  That would be a problem, and there may be other issues.  Overall, it seems to me that it should be possible to reach an agreement that is fair to Davante Adams and one that the Packers can live with.