Breaking Down Joe Burrow's $275M Extension

Michael Ginnitti
Michael Ginnitti, Managing Editor & NFL/MLB ExpertSeptember 11, 2023
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© Sam Greene/The Enquirer / USA TODAY NETWORK

Joe Burrow (hilariously) interrupted the NFL Kickoff Opener Thursday night with news of his brand new 5 year, $275,000,000 extension with the Bengals. Burrow scores a $40M pay raise this year, with a whopping $146.5M fully guaranteed at signing ($111M of new guarantee).

COMPLETE CONTRACT BREAKDOWN

The Total Value

With two years remaining on his rookie contract (4th year + an exercised 5th year option), Burrow’s contract now combines for a 7 year, $310M deal through the 2029 seasons (age 33).

Comparing to recent extensions:
Patrick Mahomes, 12 years, $480M
Justin Herbert, 7 years, $296M
Josh Allen, 8 years, $284M
Kyler Murray, 7 years, $265M
Lamar Jackson, 5 years, $260M
Jalen Hurts, 6 years, $259M

The Average Annual Value

Burrow didn’t just surpass Justin Herbert’s $52.5M per year - he blew by it. His $55M per year represents 24.4% of the current NFL Salary Cap ($224.8M), the highest percentage of cap in NFL history.

Three years ago, Patrick Mahomes’ $45M per year was the top number. Mahomes now ranks 8th on that list, with 4 players north of $50M per year (and that includes Aaron Rodgers taking himself OUT of that group).

The Guarantee Structure

It’s another wow here. Lamar Jackson’s $135M was the previous high guarantee at signing figure (Deshaun Watson excluded). But Burrow’s $146.51M soars to the top with this new deal, including 3 years of fully guaranteed compensation through 2025.

That said, it wouldn’t be fair to ignore that Burrow already had $35M fully guaranteed allocated on his rookie contract, so accounting for that lowers this new guarantee at signing figure to $111.4M - still $11.4M more than Justin Herbert secured ($100M), and plenty more than Jackson’s adjusted number when accounting for the offered franchise tag ($102.6M).

On the 5th league day of 2025, another $35.25M becomes fully guaranteed (his 2026 compensation). All of that is guaranteed for injury at the time of signing.

On the 5th league day of 2026, another $18.3M becomes fully guaranteed (a portion of his 2027 compensation). The remaining $18.95M fully guarantees in March of 2027.

That brings us to a practical guarantee total of $219.01M, through the 2027 season, 2nd only to Deshaun Watson’s $230M.

The Cash Flow

Burrow scores a $40M pay raise this year, north of $45.5M for the 2023 season, but he’ll secure a whopping $65.7M in 2024, bringing his 2-year total over $111M. Only Lamar Jackson’s $112.5M pays out more in that regard. A $35.25M payday for 2025 brings the 3-year total over $146.5M, again second only to Jackson’s outstanding $156M payout.

Why so much more for Lamar? A) He was technically a free agent versus an under contract extension. B) Joe Burrow’s extension comes with an inexpensive 4th rookie contract year ($5M) and a 5th year option value ($29M) under it. Cincinnati could have slow-played this cash flow like a baseball extension - but they didn’t. Burrow secures the best cash flow in rookie contract extension history.

Annual Cash Allocations
2023: $45.5M
2024: $65.7M
2025: $35.25M
2026: $35.25M
2027: $37.25M
2028: $40.5M
2029: $50.5M

The Cap Flow

The Bengals utilized a SIX BONUS structure with this extension: A $40M signing bonus, a $55M 2nd year option bonus, 3 consecutive $10M option bonus, and a final $5M option bonus in the 2028 season.

For the most part, this keeps the upfront cap hits relatively tenable, with a slight need for salary conversion coming in 2025/2026, and an excessive figure in the final season.

Annual Cap Allocations
2023: $19.5M
2024: $29.7M
2025: $46.25M
2026: $48.25M
2027: $52.25M
2028: $53.5M
2029: $68.5M
2030: $9M (dead)

Concluding Thoughts

Many, ourselves included, wondered if Joe Burrow would take the Peyton Manning approach (max out) or the Tom Brady approach with this rookie extension. Quite obviously he chose the former here.

The Bengals haven’t put together a contract like this in the history of their franchise, historically not fully guaranteeing any future salary - often not even for injury purposes. They haven’t been “cheap” in terms of overall payouts, but they’ve been frugal when it comes to the stability of their contracts.

There’s not a soul who can claim that about this Joe Burrow extension. It’s rock solid through 2027, with a bit of an out prior to the 2028 season, and a definitive one before 2029. Cincinnati will be sticking more than $100M into escrow with this deal (fully guaranteed cash not paid out in 2023), proving they’re on board for whatever it takes to keep this elite QB1 in town for as long as possible.

This is just step one in their core payment process however, as Ja’Marr Chase becomes extension eligible in just a few short months, and should have a bright shiny Justin Jefferson contract to mirror by then.


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