According to Peter King of Sports Illustrated, the 13-year veteran has signed a three-year contract extension that will take him through the year 2017.
Not only that, but the Patriots have ensured that Brady will play for well under market value over the next five years. Per King:
After the Patriots move money around to lessen the blow of Brady's money in a flat-cap era [...] here will be Brady's cap numbers over the next five seasons, according to a source with knowledge of the contract:
2013: $13.8 million
2014: $14.8 million
2015: $13 million
2016: $14 million
2017: $15 million
The Patriots can do this by guaranteeing his salaries for the next three and giving him much of the money in a chunk of a bonus right now. That, the source with knowledge of the contract said, is what the Patriots intend to do.
Of course, all this doesn't come without a price. Brady's contract is guaranteed all the way through 2017. Every dollar. Basically, the Patriots are betting on Brady until he's 40 years old.
It's a win-win, though, because it allows Brady and the Patriots to be competitive for years to come.
In the short term, this frees up a good chunk of change for the Patriots. Brady was scheduled to have the top cap hit in the NFL at $21.8 million against the salary cap this year (via Spotrac), but the new deal will take $8 million off his hit for 2013 and $7 million off his hit for 2014.
This, in turn, affords the Patriots some much-needed flexibility with regard to the salary cap. They had $18.5 million in space before his restructure—hardly a pittance, but dwarfed by what will now be close to $27 million.
The next immediate priorities should be determining what this means for the futures of New England's key free agents, including wide receivers Wes Welker and Julian Edelman, cornerback Aqib Talib, right tackle Sebastian Vollmer and others.
The Patriots face a dilemma with Vollmer. They want him to play right tackle, but another team may be willing to pay him to play left tackle—and may be willing to overlook his injury history, to boot. The Patriots might be able to raise their potential offer to Vollmer with the extra cap room, but would they? And by how much? Dante Scarnecchia has been able to maximize talent on the offensive line, and the Patriots drafted Marcus Cannon in 2011.
There's no denying what Welker has meant to the offense, but his future remains murky as the two sides have been trying in vain to hammer out a deal for at least the past 14 months (the Patriots offered Welker an extension during the 2011 season). There are reasons to believe the offense would still work just fine without Welker, but with the extra money, maybe the Patriots can finally make it work financially.
Also, here's an interesting thought on Welker from Mike Loyko of NEPatriotsDraft.com:
Thus, it will be interesting to see what the future holds for Welker now that Brady's long-term future is secure.
Clearly, it helps New England out in the long term; Brady's average cap hit will be just $14.2 million, compared to Peyton Manning's $19.2 million average, Drew Brees' $20 million average and what could be even more than that for Joe Flacco if and when he signs his deal.
It also gives the Pats more time to find Brady's eventual heir. Who knows if backup quarterback Ryan Mallett will even be around in 2017?
If things go as planned (meaning as long as Brady doesn't get injured), we may never get a significant opportunity to see whether Mallett can be a viable NFL quarterback. He may develop a serious case of rust between now and then, anyway.
The smart play would be to draft a quarterback sometime around 2014 or 2015 and let him learn behind Brady for a few years before eventually assuming the mantle.
But before that happens, Brady will have a few more chances to put a capstone on his legacy with another Super Bowl—a legacy which surely won't be tainted at its end, as were the legacies of Brett Favre, Joe Namath and the like.
So many quarterbacks have dragged out their careers by heading to new teams. Barring a dramatic turn of events, Brady is going to retire a Patriot. That is, unless he doesn't retire at the end of this contract.