Lamar Jackson Contract: Did Baltimore Ravens QB Turn Down a Fair Deal?

Amidst the saga of what a Lamar Jackson contract would look like in pseudo-free agency — one characterized by a lack of offers rather than a bidding war — Jackson tweeted out details of offers he’s supposedly received, pushing back against a report from ESPN’s Adam Schefter that he was offered $200 million guaranteed, adding that he received an offer for $133 million, fully guaranteed from the franchise.

In the tweet, Jackson said, “133/3years fully guaranteed but I need a agent?”

Was the Lamar Jackson Offer He Tweeted a Fair Deal?

On first blush, a deal averaging $44 million a year seems to be below the skill level of a player like Jackson. Though he has suffered injuries, he still remains one of the most productive quarterbacks in the NFL and ranks fourth in EPA per play since his unanimous MVP season in 2019.

The fact that the Ravens have struggled to surround him with receiving talent makes it all the more impressive, especially as the defense has dropped off and forced him to carry a greater load in order to engender wins.

Daniel Jones, a much less accomplished quarterback, just signed a deal with an average of $40 million a year, while Derek Carr signed a deal worth $37.5 million a year. By percentage of cap, Jackson’s apparently received offer would consume 19.7 percent of the 2023 cap number.

That’s below the deals signed by Aaron Rodgers, Josh Allen, Russell Wilson, Patrick Mahomes, Kyler Murray, Deshaun Watson, and Dak Prescott — just slightly ahead of the pact Carr signed with the Raiders in 2022.

Compared to other quarterbacks, this seems like a pretty poor deal.

Lamar Jackson Saga Proves Average Salary Is Different Than Cash Flow

But salary averages are a pretty poor way of understanding the differences between a short-term contract and a long-term one. The back end of longer deals, often unguaranteed, is often inflated and tends to be replaced by another deal instead of actually paid out.

This boosts the sticker price of the deal and gives agents something to advertise to clients — a player “earning” $40 million a year on a long-term deal might actually only see an effective deal worth $33 million a year before a cut or contract renegotiation.

The cash flow over the effective lifetime of the contract matters a great deal more. And that will be difficult to compare to other quarterbacks, as they often will receive an extension that puts cash in hand in the form of a signing bonus right away but puts the terms of the contract into future years.

As an example, Josh Allen’s contract extension in 2021 put his $16.5 million signing bonus into his pocket that year but did not replace the salary terms of his 2021 season, meaning he had a base salary of $920,000 that year with some roster bonuses thrown in.

His 2022 season was when his real extension began, where he put $46.9 million into his bank account. This year, his 2023 contract terms outline a take-home pay of $28 million.

If we calculated all of that together, that’s $94.9 million in take-home pay since 2021. But that wouldn’t compare to Jackson’s situation, where his signing bonus comes in the same year as the first year of his new contract.

If we projected the cash flow as if the signing bonus paid out to Allen in 2022, that might be somewhat analogous, giving us a three-year return of $121.4 million. With that in mind, the Jackson deal doesn’t look so sour.

Russell Wilson’s contract with the Denver Broncos did replace the terms of an already-existing deal that he signed with the Seahawks, and we could once again transpose the 2021 signing bonus onto the 2022, 2023, and 2024 take-home pay to get a comparison.

That would be $154 million over three years, substantially more than what Jackson is projected to get. Without that transposition, it would be $124 million over three years, which seems much more in line with what makes sense.

These kinds of comparisons can be difficult. It might be easiest to shift rookie salary replacements but not veteran salary replacements in order to get a good idea of what the market would actually look like. The table below does that for some of the most recent contracts signed by quarterbacks.

In the examples above, only quarterbacks who have signed deals or extensions at least three years long were included, as well as any rookie deals had their signing bonuses transposed onto the year where the new money rolls in. The years included do not indicate the date the deal was signed, but the year the new money in the deal begins paying out.

The “adjusted cash flow” column puts all the numbers into a 2023 cap environment so that they can be compared like for like.

In that light, the three-year deal that Jackson supposedly turned down does not look that bad. It exceeds the pacts signed by players who stayed with their team and negotiated an extension while under contract, but it falls behind some of those that were true free agents at the time they signed their contract and could theoretically leverage a bit more.

Jackson Wasn’t Negotiating Against the QB Market — He Was Negotiating the Franchise Tag

Yet, there are two other things to consider. It may not even be appropriate to compare Jackson’s proposed deal to other quarterbacks but to his most realistic option — a series of franchise tags. Also, a three-year deal might be preferable to a five-year deal because he’ll hit the market sooner.

Jackson may have expected that he would be hit with the exclusive franchise tag rather than the non-exclusive version. While the non-exclusive tag (theoretically) allows him to shop his services to other teams, the exclusive tag generally gives him more money.

The reason is that the non-exclusive tag, calculated before the beginning of the new league year in March, takes into account the top five salaries at the position, while the exclusive tag, calculated in April, takes into account the top five cap hits at the position, a generally higher number because it comes after free agency and changes in contract structure boost the number.

The exclusive tag likely would have paid Jackson out $45 million or so in Year 1 and then $54 million in Year 2. If he expected the exclusive tag, that would mean $99 million over two years before hitting the market and receiving a nice payout in his age-28 season.

But that’s not what happened — the non-exclusive tag instead pays him out $32.4 million this year and likely $38 million next year for a total of $70 million over two years.

Should Jackson experience something similar to Kirk Cousins — where he received the non-exclusive tag after his first year starting in Washington, followed by the exclusive tag the year after — Jackson could have earned something between $80 and $85 million before hitting true free agency.

That is unless Baltimore decided to tag him a third year, an enormous unlikelihood given the $56 million liability for the non-exclusive third-year tag and $69 million liability following the exclusive-then-non-exclusive route.

In reality, the two-year cash flow for Jackson of $70 million compares poorly to the likely $83 million or so he would have received in the first two years of any proposed $133 million deal over three years.

But hitting free agency after three years wouldn’t have been so bad, either. A “fake” five-year contract subject to renegotiation after the third year likely would have resulted in less money because extensions tend to give less to a player than an open-market offer.

Jackson’s Rejection Made Sense But Hurt Him

It’s easy to see where Jackson was coming from if he expected the exclusive tag. The projected $99 million cash flow over two years exceeds the $83 million or so he would have received over two years, after which he would have enormous leverage and be able to work the market like Cousins did after his franchise tags or Prescott did after his.

Even Watson, who negotiated a contract while under the cloud of alleged sexual misconduct from dozens of women and creating an additional team liability of multiple first-round draft picks, functionally negotiated on an open market for much more than the extensions that quarterbacks staying at home received.

By virtue of hitting an open market after a year without playing, Watson turned a projected $134.9 million three-year cash flow into a cash flow of $148.3 million — both in 2023 dollars. That difference of $5 million a year is pretty substantial and could have been where Jackson’s projected negotiating position was.

Unfortunately, the massive difference in the two types of franchise tags undercuts that potential realized gain. Now Jackson, if correct, has revealed that the details of the proposed offer he received might have been better than they appeared at first glance.

If Jackson could turn a similar deal in his age-28 year (Watson negotiated for his age-27 year) and turned around a five-year cash flow of $160 million under two non-exclusive franchise tags, it would fall well behind the projected five-year cash flow of working under the $133 million deal for three years and signing a similar deal to Watson — $150 million over three years in 2023 dollars.

That would mean a final cash flow over five years of $175 million in 2023 money — a $25 million difference.

Worse, the additional $30 million two consecutive exclusive tags would have given him would have made up the difference.

Jackson didn’t necessarily do the math wrong. He expected to have an open market under the non-exclusive franchise tag or for the Ravens to lock him up under the exclusive tag — both reasonable assumptions.

Jackson may not have turned down a fair deal. But he did turn down the better one.