All's well that ends well. The Lamar Jackson contract saga is finally over. The Ravens quarterback has signed a contract, which was agreed to shortly before the start of the NFL Draft on April 27, making him the league's highest-paid player.
The NFL world had been monitoring Jackson's contract situation closely because the 2019 NFL MVP represents himself. Several other players, including Ravens linebacker Roquan Smith, Texans offensive tackle Laremy Tunsil and Seahawks linebacker Bobby Wagner have done veteran contracts without an agent in recent years. None, besides Jackson, play the NFL's most important position -- quarterback -- at a high level.
The Ravens took a calculated risk by giving a non-exclusive franchise designation to Jackson for $32.416 million, which allowed him to solicit offers from other NFL teams. Surprisingly, some quarterback-needy teams where Jackson would have been a significant upgrade were quick to publicly state there wouldn't be an interest in him. Jackson revealed that other teams had called him during his contract-signing press conference on Thursday. He said that getting a deal done with the Ravens had been his primary focus.
Jackson signed a long-awaited, five-year, $260 million deal. There are $185 million of overall guarantees in the contract where $135 million is fully guaranteed. The $135 million fully guaranteed at signing includes a $72.5 million signing bonus. Jackson got a no-trade clause. There's also a provision preventing the Ravens from designating Jackson as a franchise or transition player when the deal expires after the 2027 season.
Jackson's deal contains two option bonuses. The seldom-used double-option bonus is one of the more complicated structures with NFL contracts. The Ravens haven't employed the double-option bonus concept since Joe Flacco's 2013 deal.
An option bonus is essentially an additional signing bonus that's usually paid in the second or third year of a contract to exercise a later year or years in a deal. Since an option bonus is given the same treatment on the salary cap as signing bonus, it is also prorated or evenly spread out over the life of a contract for a maximum of five years.
Jackson's fully guaranteed $31.75 million 2024 base salary reduces to $14.25 million provided a $17.5 million payment is made to exercise an option for a voiding/dummy 2028 contract year worth $99,999.999. The option must be exercised no later than the fifth day of the 2024 league year next March.
The deadline for the second option is in March 2025 on the fifth day of the 2025 league year. A $22.5 million payment is necessary to pick up Jackson's dummy/voiding 2029 contract year worth $99,999,999. By making the payment, Jackson's 2025 base salary drops from $42.75 million to $20.25 million. Upon signing, this $42.75 million was guaranteed for injury with $22.5 million of the $42.75 million fully guaranteed at signing. The remaining $20.25 million is fully guaranteed next March on the fifth day of the 2024 league year. The fake or dummy 2028 and 2029 contract years automatically void in March 2028 on the last day of the 2027 league year.
Putting the deal into context
Jackson becomes the league's new financial standard bearer at $52 million per year. The deal is a 1.96% increase over the five-year contract extension, averaging $51 million per year, Eagles quarterback Jalen Hurts just signed to replace Aaron Rodgers as the NFL's highest-paid player. Hurts got 1.45% more than Rodgers, who signed a three-year, $150.815 million deal with the Packers, averaging $50,271,667 per year, in March 2022. By contrast, Rodgers' deal raised the NFL salary bar 11.71% as Chiefs quarterback Patrick Mahomes' $45 million was the benchmark for him to top.
Jackson's $185 million of total guarantees and $135 million fully guaranteed at signing both rank second in NFL history behind Browns quarterback Deshaun Watson's fully guaranteed, five-year, $230 million contract. He moves ahead of Hurts' $180 million and Broncos quarterback Russell Wilson's $124 million in these metrics.
Cardinals quarterback Kyler Murray has $160 million guaranteed for injury at signing that can become fully guaranteed at various dates in the five-year extension, averaging $46.1 million per, he signed at the end of last July. An additional $29.5 million in later years of Murray's contract ($10 million in 2026 and $19.5 million in 2027), which is unguaranteed, can become completely secure to bring the total amount that can be guaranteed to $189.5 million.
Jackson sets new marks for cash flow, whether total compensation or new money, after each year of his contract. His first year cash is $80 million or 30.76% of the deal. After the second, third and fourth years, Jackson's cash is $112.5 million (43.27%), $156 million (60%) and $208 million (80%). Since Jackson's rookie contract expired after the 2022 season, his actual cash flow and new money after each year are the same.
The following chart compares the cash-flow percentages after each new year for the four quarterbacks (Hurts, Jackson, Murray and Wilson) who have signed traditional deals with five new years over the last year.
1st new year
2nd new year
3rd new year
4th new year
5th new year
Murray's contract is the most front loaded. He has the best cash-flow percentages in the early years. Murray is also the only one of the four with per game roster bonuses in his contract. He has $850,000 per game roster bonuses ($50,000 for each game on the active roster) in each of the new years (2024 through 2028). The per game amount is only payable if Murray is on the active list for that particular game. Murray is also the only one of the four without a no-trade clause.
Jackson's contract was erroneously reported as having $750,000 in offseason roster bonuses in the last four years (2024 through 2027). Those are workout bonuses where Jackson must complete 80% of the scheduled sessions in the offseason program.
Workout bonuses aren't normally a part of Ravens contracts. Defensive tackle Michael Pierce is the only Baltimore player with a workout bonus. He has a $250,000 workout bonus this year. It wouldn't be a surprise for workout bonuses to become the norm in Ravens veteran contracts over the next few years because Jackson agreed to them.
Curiously, Jackson doesn't have a March roster bonus in the last year of his contract. The next four highest-paid players on the Ravens (Smith, Ronnie Stanley, Marlon Humphrey and Mark Andrews) have $4 million fifth day of the league year roster bonuses in their last two contract years. The early roster bonus forces the Ravens to make a quick decision on these players so they can't be held hostage and released at an inopportune time.
Jackson having $29 million of his 2026 base salary converting from being guaranteed for injury to fully guaranteed on the fifth day of the 2025 league year eliminates the need for a March roster bonus in 2026. The early vesting of the 2026 guarantee sufficiently protects him.
Jackson securing a clause prohibiting a franchise or transition tag after his contract expires is a rarity. The only other quarterback with such a clause is Prescott.
Baltimore's inability to prevent Jackson from hitting the open market in 2028 because of the no franchise/transition tag clause ensures he will have maximum leverage in any subsequent contract talks. There will be pressure for the Ravens to reach an agreement when Jackson is entering the final year of his deal in 2027 in order to keep him. Practically speaking, Jackson has a four-year deal for $208 million. He shouldn't play the fifth year of his contract because of the tag prohibition clause.
What If Jackson had an agent?
Patience has been Jackson's best friend. If Jackson had an agent, he conceivably would have signed a contract extension during the preseason in 2021 comparable to the deal fellow 2018 first-round pick Josh Allen signed with the Bills shortly after training camp opened. Allen received a six-year, $258 million extension, averaging $43 million per year, when he had two years left on his rookie contract, to become the NFL's second-highest-paid player behind Mahomes at $45 million per year.
Four players (Rodgers, Wilson, Murray and Watson) surpassed Mahomes' $45 million per year in 2022. Hurts recently joined Rodgers as the second member in the $50 million-per-year club. Jackson got approximately $8.5 million per year more on his deal for a year shorter by waiting until this year instead of signing an extension in late August/early September 2021.
Jackson made $1,771,590 in 2021 and $23.016 million in 2022 on a fifth-year option for a total of $24,787,590. He is already better off financially than if he had signed a six-year extension, averaging $43.5 million per year, in 2021 based on Allen's contract structure.
Allen made $16,461,405 of new money in his first existing contract year (2021). His new money through his two existing contract years (2021 and 2022) was $40,445,405. Allen's new money through his first new contract year (2021 through 2023) will be $68,445,405.
The following chart illustrates the cumulative cash-flow difference between Jackson signing an Allen-type deal in 2021 at $43.5 million per year and his actual $52 million-per-year contract.
Jackson's $80 million of 2023 cash is responsible for his actual deal topping the cumulative cash in the hypothetical 2021 extension so quickly. The difference only becomes more pronounced over time. The cumulative cash at the end of each respective deal is essentially the same even though Jackson's actual contract ends a year earlier than the hypothetical extension. The discrepancy would be even greater because of the no franchise/transition clause possibly being the impetus for a new deal in 2027.
Jackson acquitted himself quite nicely by doing his deal without an agent. He was able to reap the benefit of changing market conditions by being patient. The clause preventing a franchise or transition clause is a major victory for Jackson. These types of clauses are rare in NFL contracts. The Cowboys will find out how much the clause can shift contract leverage in favor of a player next offseason especially if Prescott returns to his 2021 form.
If representing Jackson, I would have pushed for better cash flow where the percentages were as close to Murray's in the first three years. I would have wanted a bigger March roster bonus in 2027 than Smith, Stanley, Humphrey and Andrews have, to put pressure on the Ravens to do a new deal before the 2027 league year started.
Hurts has $15 million in salary escalators to bring the maximum value of his deal to $270 million. Jackson's deal doesn't have any salary escalators or incentives. I would have pushed for the ability to exceed Hurts' deal maximum with performance bonuses.
I expect Jackson's time as the NFL's highest-paid player to be short-lived because Joe Burrow and Justin Herbert are in line for contract extensions from the Bengals and Chargers. That's just the nature of the beast with market-topping NFL contracts.