The numbers for Lamar Jackson’s $260 million contract came in courtesy of PFT yesterday and now we can analyze the contract and give some thoughts on where things went well for Jackson and maybe where he missed out.
Jackson, unlike the recent extension for Jalen Hurts, will reset the market in terms of cash earned in every year he plays. Here is the breakdown of Jackson’s cash flows versus that of the other top paid players at the position.
|New Money Cash Flows: Top 10 QB|
|Player||Year 1||Year 2||Year 3||Year 4||Year 5|
This is representative of a true top market contract since he will be the top earner (for now) in each year of his deal. On a percentage basis the numbers work out as follows:
|Year||Jackson Pct. Increase|
I would not call this a major market mover and a bit more in line with the “next man up approach” we see in contracts these days but it certainly sets a standard for other teams around the NFL.
The Guarantees/Potential Earnings
Much was made of Jackson’s desire to get a fully guaranteed contract and the Ravens refusal to move in that direction. At the end of the day Jackson will get a deal in line with the market at $135 million in full guarantees (there are some reports that have this lower, but given the vesting dates lets just consider it definitely a full guarantee) and a typical QB vesting schedule with rolling guarantees getting him to $185 million.
Here is our breakdown of what Jackson will earn on his contract assuming he is released prior to the vesting date (i.e. a 2025 release would be made before the 5th day of the league year in March).
|Cut Year||Earnings||APY||Pct Earned|
What this boils down to is if he was released next year he would still earn 52% of the total contract. 60% if cut after 2024, and so on. He would earn well over his stated APY until 2027.
How does this stack up against some other players? I wanted to look at Hurts’ contract because it was the most recent deal and Josh Allen’s contract because it has a unique rolling guarantee structure. To compare apples to apples we are valuing Hurts guarantee as only new money guarantees (i.e. we don’t consider his $4.3M salary that was on the books from 2023 as any part of the contract) and for Allen we are also backing out his rookie money and since his is a 6 year contract basing his percentages off the first five years of his contract. For those players the cut year refers to the new money cut year. For Allen that would mean 2024 as his Year 2 and 2025 for Hurts.
In this case it would seem clear that Jackson was building off the Hurts model. What I mean by that is we have a similar guarantee structure and payout schedule. Allen’s numbers are also in line but towards the tail end of the contract Allen continues to earn guarantees on his salary which is something Jackson did not receive. That one actually surprised me a little bit and if you want to quarrel over agent/no agent that’s probably the area that is most lacking here. Allen had to take a six year deal to get that kind of structure though and Jackson will be a free agent and there is value in that.
One of the things with the structure of the contract is that Allen received massive roster bonuses in his contract which puts the Bills in a decision on the tail end of the deal to make rapid decisions. Hurts also received bigger roster bonuses. Kyler Murray likewise got big roster bonuses in the contract to help force the issue. Jackson’s roster bonuses are not large enough to be meaningful in any way.
Jackson’s salary cap structure is similar to Hurts. It offers him protection beyond the guarantees. It would cost the team $113M in dead money to release him in 2024. $101 million to release him in 2025 and $86.5 million to release him in 2026. On the negative side is if his play declines the lack of that roster bonus does give the Ravens time to have him twist in the wind while they try to bring his salary down and ultimately being able to June 1 him at that point.
On the positive side Jackson will have massive salary cap charges on the back end of the deal and if he is playing well enough will be well positioned for an extension in large part for salary cap relief. This is what led to the Ravens having to extend Joe Flacco a generation ago which led to all kinds of trouble for them. This is a similar structure so Jackson should have the same benefits.
Jackson did not have to agree to any per game roster bonuses which is a big win for him. Jackson has never started more than 15 games in a year and the last two years has played in just 12 games each year. The Ravens don’t typically use per game bonuses but it is still a big win in my mind for him not to have them in the contract.
Jackson also received a no trade clause which is becoming a bit more standard these days for QBs but also got a no tag clause, which is not. That was another thing that surprised me with the contract. I’m guessing there are three reasons why they could have done that. One is that the team is concerned with the long term durability of Jackson and do not look at this greatly as an extension candidate five years from now regardless of that contract structure and cap hits.
The second, which is probably more powerful, is just that QB’s don’t often leave teams at that age. Jackson should not be at the end of the career stage like Matt Ryan and Aaron Rodgers where you land in a messy divorce. Usually you can work out those contracts without an issue. Drew Brees for example could not be tagged and never considered using that leverage. Kirk Cousins in Minnesota has had some solid tag protection and also has simply “played ball” with the Vikings and their salary cap issues.
Finally, his cap number is so high on the tail end of the contract that you would be looking at a franchise tag number of around $90 million for 1 year. Unless the team has built in multiple void years (and perhaps they have) to bring that final year number way down via restructure the contract is in no way shape or form really meant for a tag so there is no need to include it.
I do not know if Jackson did or did not receive incentives that can increase the value of the contract. Hurts did. Allen did. Mahomes did. Murray did not. Watson did not. These are all very high end incentives but he should receive them since he is considered a high end QB. That would be good for Baltimore if they did not include anything like that in the contract.
There was so much negativity thrown Jackson’s way these last few months because he did not have an agent and the end result is probably very similar to what he would have received with an agent. Would an agent have been able to create a market while Jackson was tagged? Possibly but given that this situation screamed collusion over the guaranteed concept I doubt it.
Would an agent have gotten a better guarantee package? I do think that is the case. Not at signing as those numbers would have been the same, but I think he may have gotten those added guarantees and bigger roster bonuses that are in many of the other QB contracts.
The one other area where things maybe could have changed is cash flows. This is one where its going to sound weird to criticize since he is resetting the market in each year of the contract, but the Ravens have been very willing to go way above market in years 1 and 2 for other players. Now those players did not receive annual values at the top of the market but for example Ronnie Stanley’s first year new earnings were probably in the ballpark of 30% over market. Mark Andrews was probably around 25%. That said the APY for a QB is generally more important than other positions so I could see if the tradeoff was $52M/year vs $47M per year but more up front.
Once the sides broke off talks last year, Jackson did benefit by waiting on a contract. Essentially, he allowed Jalen Hurts to jump the market and set a framework to use for his contract. He earns $3M more over three years, $4 million over four, and $5 million over five. He probably would not have gotten that had he not waited. While there is a chance some of the other QB contracts could get done it is probably more likely that they won’t hit until the summer and he would have been blocked off from an extension by then so I think the timing was perfect for him to agree to a deal right before the draft.
Overall, it is a traditional market mover at the position and will set the framework for the next contracts which will likely be somewhere between $53 million and $55 million per season. The five year contract length, if it wasn’t already solidified, is clearly the baseline for everyone and now there is a new set of guarantees for players to aim for. Overall I think the other QB’s looking for new contracts are happy with where this one landed, giving them more ammo to ask for and hopefully receive more than they would have had Jackson not signed an extension.