Why Lamar Jackson Was Smart to Wait on Contract Extension
Analysis 4/4/23
The mainstream narrative surrounding Baltimore Ravens quarterback Lamar Jackson is he lost out on substantial career earnings by refusing to sign an extension earlier in his career. But those saying he will never make as much money as quarterbacks who agreed to early extensions are 100 percent wrong.
In fact, Jackson's decisions put him in a position to make more money than any of his contemporaries.
For example, take Buffalo Bills quarterback Josh Allen. Both Allen and Jackson were first-round picks in 2018, but Allen has earned roughly $52 million more than Jackson through five seasons (Allen: $85 million; Jackson: $32.5 million). That’s because Allen signed a six-year, $258 million extension in August 2021.
Jackson has yet to sign a second contract. He played the 2022 season under the fifth-year option ($23.016 million), and the Ravens placed the non-exclusive franchise tag on him earlier this offseason. Under the tag, Jackson will make $32.416 million in 2023 if he does not sign an extension before the July 17 deadline.
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When Allen signed his extension before the 2021 season, his $43 million average per year (APY) made him the second highest-paid player in the NFL behind Patrick Mahomes ($45 million APY). Despite that, Allen should not have signed this contract after his third season, the earliest he could’ve signed such an extension.
In just two years, the market for top quarterbacks has increased by more than 10 percent and will continue to grow rapidly. The most valuable thing for an elite player is having fewer years until he’s a free agent. Yet, Allen still has six years left on his deal; he’s signed through 2028, as the contract was for six new seasons and eight total seasons.
Jackson, however, was smart to wait. Now, he should seek a shorter deal so he can set himself up for another payday in the near future. By doing so, he can eclipse Allen’s career earnings quickly and finish with substantially more money by the end of their respective careers.
Let’s say Jackson signs a three-year, $150 million deal with Baltimore. And, let’s assume a flat-cash structure where he is paid $50 million each year. With this deal, Jackson would pass Allen in career earnings by the end of the 2025 season. That’s not even adjusting for Jackson’s four-year rookie contract being worth $11.7 million less than Allen’s (since Jackson was selected No. 32 overall and Allen was selected No. 7).
Jackson | Allen | ||||
Year | Cash Paid | Career Earnings | Year | Cash Paid | Career Earnings |
2018 | $5,448,472 | $5,448,472 | 2018 | $13,965,844 | $13,965,844 |
2019 | $910,530 | $6,359,002 | 2019 | $1,442,865 | $15,408,709 |
2020 | $1,341,060 | $7,700,062 | 2020 | $2,495,730 | $17,904,439 |
2021 | $1,771,590 | $9,471,652 | 2021 | $20,000,000 | $27,904,439 |
2022 | $23,016,000 | $32,487,652 | 2022 | $47,000,000 | $84,904,439 |
2023 | $50,000,000 | $82,487,652 | 2023 | $28,000,000 | $112,904,439 |
2024 | $50,000,000 | $132,487,652 | 2024 | $30,000,000 | $142,904,439 |
2025 | $50,000,000 | $182,487,652 | 2025 | $39,500,000 | $182,404,439 |
Jackson would re-enter free agency after the 2025 season, but Allen would still have three years remaining on the contract he signed in 2021. At that point, it wouldn't be unrealistic for Jackson to sign a new three-year contract for $180 million ($60 million APY). That might be a conservative estimate, given how quickly the top of the quarterback market and the salary cap are increasing.
But to keep it simple, let’s assume Jackson continues to play at a high level and signs for three years and $60 million per year after the 2025 season. Here’s how his career earnings will look then in comparison to Allen’s:
Jackson | Allen | ||||
Year | Cash Paid | Career Earnings | Year | Cash Paid | Career Earnings |
2018 | $5,448,472 | $5,448,472 | 2018 | $13,965,844 | $13,965,844 |
2019 | $910,530 | $6,359,002 | 2019 | $1,442,865 | $15,408,709 |
2020 | $1,341,060 | $7,700,062 | 2020 | $2,495,730 | $17,904,439 |
2021 | $1,771,590 | $9,471,652 | 2021 | $20,000,000 | $27,904,439 |
2022 | $23,016,000 | $32,487,652 | 2022 | $47,000,000 | $84,904,439 |
2023 | $50,000,000 | $82,487,652 | 2023 | $28,000,000 | $112,904,439 |
2024 | $50,000,000 | $132,487,652 | 2024 | $30,000,000 | $142,904,439 |
2025 | $50,000,000 | $182,487,652 | 2025 | $39,500,000 | $182,404,439 |
2026 | $60,000,000 | $242,487,652 | 2026 | $38,500,000 | $220,904,429 |
2027 | $60,000,000 | $302,487,652 | 2027 | $40,000,000 | $260,904,429 |
2028 | $60,000,000 | $362,487,652 | 2028 | $41,554,595 | $302,459,034 |
That’s more than $60 million more than Allen in 2028. Of course, this assumes Allen does not renegotiate with the Bills before the end of his current contract. Even if he does, Buffalo will want to extend the length of the deal; it will not be an entirely new contract, and Allen will still be tied to a long contract that does not maximize his earnings potential.
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If both quarterbacks continue to perform and play the same number of seasons, Jackson will make more money by waiting and taking shorter contracts. Had Jackson hired an agent and signed a five-year extension after his third season, he’d be in a far worse position. Instead, he has put himself in a prime position to out-earn his counterparts, regardless of whether his next contract is fully guaranteed.
If Jackson plays his cards right, he could make the most money of any player in NFL history.
Joe Banner is a former front office executive for the Philadelphia Eagles and Cleveland Browns. He was part of an Eagles franchise that made a Super Bowl and played in four NFC Championship Games. Follow him on Twitter at @JoeBanner13.