Josh Allen’s new $330 million contract with the Buffalo Bills became official yesterday. The annual value of the contract ties Allen for the top number in the NFL at $55 million a season and the $250 million injury guarantee is the largest guarantee at signing in the history of the NFL. It is such a massive contract and unique situation that it is worth some extra discussion even with all eyes still focused on free agent transactions.
What makes the contract so unique is that Allen had four years remaining on his prior contract that he signed back in 2021. The Bills held his rights at $129.554 million for those years and while they would have had to tweak the cash flows in the prior deal regardless, it is incredibly rare that a team would simply tear up so many existing seasons and just start over on a contract.
The closest comparison I could come up with is Deshaun Watson following his trade to the Browns where they ripped up his prior four years and replaced it with the infamous five year $230 million fully guaranteed contract that has become the worst in NFL history. Watson new deal, however, came off a trade and since an acquiring team has no real investment in the prior contract that are sometimes willing to start over if that works best for both sides.
Aaron Donald had three years remaining on his contract with the Rams and the Rams just tossed those out and started over once Donald kind of threatened retirement at the time. That is probably the closest thing to this though Allen didn’t seem to have to pull at the Bills to push them in a new direction.
Allen’s contract was signed at a similar time as Patrick Mahomes and both bucked any modern trends in the NFL. Mahomes’ contract was way out in left field, taking a 10 year deal in a league that had moved to four and five year contracts. This locked Mahomes in at $45 million a year over a 12 year term. Allen followed suit taking a six year extension that tied him to the Bills for an 8 year term at $43 million a season. Both contracts wound up being obsolete by the time the ink dried.
Both Mahomes and Allen have had their prior contracts re-worked to try to keep them happy. Mahomes contract was tweaked in 2023 moving a bunch of money from the back of the contract into the middle of the contract. This would move Mahomes’ earnings from 2023 to 2027 to equate to a 5 year APY of about $52.5 million. In theory this would keep Mahomes happy with his contract until 2028.
The Bills last season did a similar thing but only for one season, moving most of his 2025 salary into 2024, bumping Allen’s salary from $30 million to $60 million. Buffalo probably could have continued this practice on a yearly basis to land at something similar to Mahomes, but my assumption would be that the Bills looked at this and figured rather than stringing this along year by year to make things work with Allen financially it would best serve everyone if they just hit the reset switch and reworked his contract to bring it near the top of the QB market.
The danger of Allen being way out of line with the market is reduced with this new deal. At $55 million per year he is tied with the young stars of Joe Burrow, Jordan Love, and Trevor Lawrence. He earns more than Tua Tagovailoa, Lamar Jackson, Jalen Hurts, Jared Goff, Justin Herbert, and of course Mahomes.
Allen’s contract will now run through the 2030 season which ties him more to the market. Burrow and Herbert’s contracts run through the 2029 season. Hurts, Love, Tua, and Goff go through 2028. Mahomes is mainly a 2028 contract as well. Jackson would be the one to jump them all with a 2027 end season.
The point is that at $55 million per year, Allen’s contract will likely run alongside a number of other players who are considered good players rather than stick out as one of the top two players in the NFL while earning close to what Daniel Jones was earning per year with the Giants. With less good QBs in the NFL now there is less chance of dramatic swings and by the time Jackson settles into a new contract Allen will have played enough of this deal for the Bills to consider a more traditional contract extension.
While this is a new contract there were some concessions clearly made by Allen when it comes to the breakdown of the deal and I think he alluded to that in his press conference when he talked about wanted to do what’s good for the Bills too. Traditional contracts wind up with big first year payments in them. Burrow received $111 million in 1st year new money. Herbert and Prescott $100 million. Allen’s contract will pay him $58 million, which is actually less than he earned last year.
Overall, the cash flows in this contract are very steady. $58 million in year 1, $55 million in year two, $53 million in year 3, $54 million in year four, $52.5 million in year 5, and finally $57.5 million in year 6. Clearly this was not about winning some war in a negotiation. It was just about doing a fair deal that put Allen’s compensation on par with the other players in the league.
The guarantee structure in the contract is very straightforward as well. Allen’s first two years are fully guaranteed and about 2/3 of his third year is fully guaranteed at signing. All of the other injury guarantees are vesting guarantees and they will become guaranteed a season early. So in 2026 the balance of his 2027 salary is guaranteed. In 2027 his 2028 salary is guaranteed. In 2029 there is a partial roster bonus guarantee which will be guaranteed in 2028.
Allen gets very large roster bonuses in the final two years of the contract. It is $35 million in 2029 and $30 million in 2030. These are not only beneficial for early earnings but they lock in salary in the event the Bills are considering another extension. The March date of the roster bonus puts some pressure on a team to get a deal done by a certain time.
The salary cap structure of the deal is solid for the Bills. They will follow the option bonus structure that many teams follow with option in 2026, 2027, and 2028. The options do not cover the entire salary so the team could always restructure for more cap relief but the cap charges of $41.4 million in 2025, $61.4 million in 2026, $58.1 million in 2027, and $64.3 million in 2028 are workable. There is virtually no change in cap numbers from his old contract and his new one from 2025 to 2027.
In 2029 the cap number explodes to over $86 million. There are already void years in place to allow for conversions for cap relief, but my guess is the plan is to aim for an extension that offseason to follow whatever Jackson, Burrow, Mahomes, etc… do. An extension would drop those numbers significantly and the team would get to make the salary that year part of a new guarantee package. Given that Allen will be 33 in 2029, if you are going to do an extension that is the year to do it anyway.
There are a number of ways to really get a full value analysis of Allen’s tenure with the Bills. If we take this from day 1, we are looking at an 8 year contract extension worth nearly $460 million, about $57.3 million per year in new money. He will have had his salary guaranteed from 2021 to 2026 and a partial in 2027. That would be about $300 million in guarantees over that time. That number will only grow as he earns a full guarantee on the 2027 through 2029 injury protected salaries.
Another valuation might be to look at this as a deal starting last year with the bump in the salary to $60 million. As a new 7 year contract that would be worth $55.7 million a year with $207 million fully guaranteed and $310 million in injury protection.
I think with all of the various ways to look at it you can come to the conclusion that this has the most secured money of any contract run in the league, places him 2nd in annual value if we only look at new money, and 1st if we look at the effective value of a contract including the old money.
For the Bills this is still affordable since you are talking about the 2nd best player in the NFL now simply being in line with everyone else. You eliminate a potential problem every year and now have a contract that runs concurrent with the other good players and is set up for an extension before Allen hits an age where the extension becomes a major concern. I think it is very good long and short term planning by the Bills here and not something that we see from many teams in the NFL.