Report: Jon Gruden’s contract heavily backloaded to take advantage of Nevada tax law

By Jesse Reed

The Oakland Raiders have landed the NFL’s version of the white whale by securing Jon Gruden as their next head coach. Not surprisingly, it took a boatload of money to get him to Oakland, and now we have even more details about the mega-contract Gruden is going to sign.

According to Mike Florio of Pro Football Talk, Gruden’s contract, and the contracts his assistants will sign, will be heavily backloaded. He’ll earn significantly less early in the contract than he will later on, per the report.

“How much less? One league source said that my round-number example of $25 million over the first five years and $75 million over the final five years from PFT PM isn’t that far off the mark. More specifically, the source says the early years are much closer to $5 million annually than $10 million.”

The reason for this is that the Raiders will soon be moving to Las Vegas, and there is no state tax in Nevada. Compared to California’s 13.3 percent rate for millionaires, this is a huge incentive.

We saw this same strategy being employed when the Raiders inked Derek Carr to his then-record contract (before Matthew Stafford signed his). It’s also likely going to be a huge selling point for the Raiders as they attempt to lure free agents this offseason, and in the coming years. Being able to take home significantly more of your contract is something players will definitely be interested in.

The Raiders are all about the Vegas move right now. That’s why they had to make the big splash with Gruden, and that’s why this scribe believes they’re going to be going all-in during free agency to acquire the talent necessary to produce a winner.