Breaking Down Lamar Jackson's $260M Contract

Michael Ginnitti
Michael Ginnitti, Managing Editor & NFL/MLB ExpertMay 04, 2023
Share
#lamar jackson
© USA TODAY Sports

We finally have the inside details regarding Lamar Jackson’s 5 year, $260M contract with the Baltimore Ravens, and they’re as potent as expected.

Total Contract Value

At $260M (the franchise tag was never signed so it wasn't factored into this new contract in any way), Lamar Jackson's new contract becomes the 2nd largest new money deal in NFL history, behind only Patrick Mahomes' $450M. It surpasses Josh Allen's $258M contract in Buffalo (across 6 new years), and Jalen Hurts' brand new $255M deal in Philly.

Average Salary

At a new money average of $52M per year, Lamar’s contract makes him the highest average paid player in NFL history at the time of signing. He surpasses Jalen Hurts ($51M) who held the belt for 2 ½ weeks, and Aaron Rodgers ($50.2M), who started this whole $50M per year game last March - and could be in a position to retake the lead with his revised contract in New York.

Signing Bonus

An historic $72.5M. Lamar didn’t just top this mountain, he built a new mountain on top of the previous one and planted his flag there. The previous top signing bonuses in NFL history were paid out to Dak Prescott ($66M, 2021), Russell Wilson ($65M, 2019), & Matthew Stafford ($60M, 2022).

Keeping with the Ravens, Lamar’s $72.5M bonus is $32.5M more than the previous high (Joe Flacco, $40M).

Cash Flow

Extremely Aggressive. Lamar bags $80M in 2023, $5M more than any player in history (Prescott $75M), and $47.6M more than he was set to earn on the franchise tag. In fact, it’s $8.72M more than he would have earned with back-to-back franchise tags.

In terms of 2-year cash flow, again, Lamar is way ahead here. The new deal pays out $112.5M through 2024. That’s $17.5M more than 2nd place Dak Prescott ($95M), $23.5M more than 3rd place Matthew Stafford ($89M).

In terms of 3-year cash flow the gap widens even more. Lamar is due $156M through 2025, which is $6M more than the current Aaron Rodgers contract (soon to be ripped up), but a whopping $19M more than the Deshaun Watson contract ($137M). Furthermore, Lamar will see all $156M become fully guaranteed by next March.

Guarantee Structure

Lamar scores $135M fully guaranteed at signing out of the gate, #2 all-time, $11M more than Russell Wilson's $124M in Denver, $25M more than Jalen Hurts' recent upfront guarantee, and over $31M more than Kyler Murray's $103.3M last summer. The $135M is comprised of his massive $72.5M signing bonus, a $7.5M salary for 2023, a $14.25M salary for 2024, a $750,000 workout bonus, a $17.5M option bonus for 2024, & a $22.5M option bonus for 2025.

On the 5th league day of 2024 (next March) another $20.25M becomes fully guaranteed (his entire 2025 base salary). 

In early March 2025 (5th league day), $29M of his 2026 salary becomes fully guaranteed, raising the practical guarantee on this deal to $185M. This $185M figure ranks 2nd all-time to Deshaun Watson’s $230M, but is $5.7M more than Jalen Hurts’ recent $179.3M number.

Of note: All $185M of practical guarantee is guaranteed for injury at the time of signing. This is no small bullet point for someone who plays the game the way Lamar Jackson does.

The Salary Cap Flow

Despite a heck of a lot more cash in hand, Lamar Jackson’s salary cap figure for 2023 dropped from $32.4M, to $22M, a savings of $10.4M.

Assuming void years are being used for the triple bonus structure (2023 signing bonus, 2024 option bonus, 2025 option bonus), the 2024 salary cap figure stays relatively tidy at an even $33M. Even the jump up to $43.5M in 2025 shouldn’t be too daunting if we’re assuming the league cap is near $260M at that point in time.

But things get wild in 2026 & 2027, with initial cap hits of $74.5M for each season. February of 2026 will be a very clear line of demarcation for this relationship.

A) It’ll be a great time to start talking about contract #3 as a way to reduce the upcoming cap hits (similar to what Dallas and Dak Prescott are going through)

B) It’ll be a great time to allow Jackson to start feeling out potential trade partners who are willing to rip up the deal and start over, or restructure the $102M of future base salary.

C) It’ll be an unclear long-term future, Baltimore will process a salary conversion on his $51.25M base salary to lower the $74.5M cap hit, and the discussion about moving on after 2026 will become very loud.

The Fluid Dead Cap Breakdown

If you’re looking at the contract right now, you see a doable out after 2025 where the Ravens take on a $57.5M dead cap hit, but free up $17M of salary cap in the process. While that is true right now - that won’t be true come March 2025, when $29M of his 2026 salary becomes fully guaranteed. This raises his 2026 dead cap to $86.5M, making it extremely unlikely that the Ravens could outright release him at that point in time. The $74.5M cap figures in 2026 & 2027 are pivotal junctures in this deal, despite the lack of full guarantee built into them. If all is right in the world, Lamar probably gets a new contract prior to the 2026 season, making life easier for both sides. But if there's discontent, dealing with $86.5M of dead cap and back to back $74.5M actual cap hits presents quite the problem for the Ravens.

If the plan is to keep him rostered through 2026, they'll almost certainly need to process a salary conversion on portion of Lamar's $51.25M base salary, which means higher actual and dead cap hits for 2027 & beyond.

Add-Ons

Lamar negotiated both a Full No-Trade Clause & a Full No-Tag Clause into his big extension, meaning he owns the conversation of where he plays next, and he’ll have the ability to walk away after 2027 with no restrictions (and $260M in his pocket).

Concluding Thoughts

This was one of the more anticipated breakdowns in my career covering these contracts - all things considered. It ended up looking, smelling, and feeling like any other top of the market contract, including most of the standard structure practices that the Ravens utilize with all of their multi-year deals.

The cash-flow is ridiculously good. Why? Because Lamar Jackson wasn’t going to go back down after coming this far. The team-friendly cash flow contracts in this league almost always come with a dirt cheap 4th year rookie salary & 5th year option salary still left to be earned. Jalen Hurts turned a $4.3M previous 2023 salary into a $24.3M payout this season, a 5X raise.

The best part about this contract is that it doesn’t go longer than it needed to. By keeping this a true 5 year contract: A) the cash flow is truncated and therefore aggressive B) The backend of this becomes a cap mess that hopefully means another blockbuster deal (Cousins, Prescott, Stafford), C) Even if he plays out this entire deal, he’ll be just under 31 years old.

Until then though, Baltimore has another 3-year window from a salary cap perspective to try to re-engage as legitimate AFC contenders. 


#lamar jackson
Top