Breaking Down Jonathan Taylor's $42M Extension

Michael Ginnitti
Michael Ginnitti, Managing Editor & NFL/MLB ExpertOctober 08, 2023
Share
#jonathan taylor #colts #indianapolis colts
© USA TODAY Sports

Jonathan Taylor and the Indianapolis Colts pulled a complete 180 this week in agreeing to a 3 year, $42M extension through the 2026 season. The deal puts a cap on a summer full of twists and turns that had many believing (myself included), that the only ending for this relationship would be a breakup. But with the Colts showing promise early in the season, and new QB1 Anthony Richardson showing potential to be an instant hit, Indy & Taylor saw a clearer future together.

The following contains a number by number look at the contract breakdown for Jonathan Taylor’s new deal.

Related: VIEW THE COMPLETE CONTRACT

The Total Value

Taylor’s 3 year extension now means a chance at $46.304M over the next 4 seasons (through 2026). How many active running backs have a contract that runs through 2026? 18. Of those, how many aren’t on a rookie contract? 16. Taylor joins only Miles Sanders as veteran running backs with a contract that covers the next 4 seasons.

For reference here, Miles Sanders secured $25.4M over 4 seasons, while youngster Bijan Robinson’s slotted rookie contract carries $21.9M through 2026. 

The Average Annual Value

At $14M per year (a number some wondered if running backs would ever hit or exceed again), Taylor now slots into the 3-hole in terms of active running back AAVs. When adjusting based on practical cash flow, this becomes a 3 year, $33.3M contract - $11.1M per year for practical purposes.

When I was prompted to propose a “fair” deal for Taylor earlier this spring by a few third-party outlets, this exact $33M over 3 year breakdown was determined to be our value landing spot.

The Guarantee Structure

Taylor secures $19,347,555 fully guaranteed at signing, consisting of $785,555 in remaining 2023 salary, $8,314,000 of 2024 compensation, & a $10,248,000 million signing bonus.

If these numbers seem a little wonky, remember that this deal was signed before Week 5 of a season, so there’s a proration occurring with the 2023 salary. Taylor’s base salary dropped from $4.304M down to a minimum $1.01M for the rest of the season. So, he earned $956,444 for his 4 weeks on the PUP list, and will now earn $785,555 for the next 14 weeks. The latter is the only portion we include in the “guarantee” metrics of this contract.

From there, $7,152,445 of his 2025 base salary will become fully guaranteed on March 17th, 2024. That amount is guaranteed for injury at the time of signing. This “early guarantee trigger” makes $26.5M of this contract guaranteed for practical purposes.

Guarantees at Signing (Active Veteran RBs)
1. Christian McCaffrey, $30M
2. Alvin Kamara, $22.8M
3. Jonathan Taylor, $19.3M

Full Guarantees (Active Veteran RBs)
1. Christian McCaffrey, $38.1M
2. Alvin Kamara, $33.8M
3. Jonathan Taylor, $26.5M

If we told you that back to back franchise tags in 2024 & 2025 for a running back likely calculates to just north of $25M, and that Taylor has now secured $26.5M guaranteed, with a chance to earn $33.3M through that time period, we can all probably agree that this is a win for Taylor.

The Cash Flow

We’ve referenced a lot of this already, but to add more detail to it, Taylor will now secure $11.99M in 2023, $7.686M more than he was previously slated to earn.

The cash drops down to $8.314M in 2024, but all of it is fully guaranteed - including the $510,000 of per game active bonus.

Taylor should (will) secure $13M in 2025, with 55% of it becoming fully guaranteed next March. A $1.02M per game active bonus could reduce his compensation by $60,000 per week missed.

Finally, another $13M is available in 2026, though none of it is guaranteed, and the same $1.02M per game active bonus exists to protect the team a bit.

Jonathan Taylor’s Cash Flow
2023: $11.99M (+$7.686M)
2024: $8.314M
2025: $13M
2026: $13M

The Cap Flow

Taylor’s new deal keeps his 2023 cap hit neutral for the current season. The reduction in base salary plus the proration from the new signing bonus all added back up to the exact $5.1M number that previously sat on the Colts’ books.

Taylor’s salary cap hit rises to $10.876M for 2024, which should be around $1.5M less than what a franchise tag would have accounted for next March.

In 2025, the cap figure jumps to $15.5M, which likely won’t even represent 6% of the league salary cap that season. A near $12M base salary can be converted to signing bonus in order to reduce this figure should the Colts see the need to.

Jonathan Taylor’s Cap Flow
2023: $5,117,482
2024: $10,876,000
2025: $15,562,000
2026: $15,562,000

Concluding Thoughts

Without getting down the rabbit hole too much (plenty of time to do that on the podcast), this is a win-win outcome. Anyone assessing the best landing spots for Jonathan Taylor in a potential trade always found themselves back to Indianapolis, realizing just how good of a fit this player is for this offense - RIGHT NOW.

The Colts bent a little to go north of the franchise tag cash flow, protecting themselves against $2.55M of this contract with per game active bonuses. The early vesting trigger on the $7.15M of 2025 base salary is a strong get for Taylor here, as the Colts could have leaned into the devaluation of this position to make that a March 2025 trigger, instead of in March 2024.

Is there a world where the Colts bow out of this contract after 2024, pay him the $7.1M 2025 salary as a parting gift, and take the near $6M of cap savings instead? Of course. But it’s unlikely (for now).

Jonathan Taylor should have no trouble seeing 3 years, $33.304M out of this contract through the 2025 season, when he’ll be a position-friendly 26 years old still. And if he remains healthy & productive, a small restructure to his 2026 salary should keep him in the fold for at least another year thereafter, especially if the Colts have a $70M per year contract extension to negotiate with their QB1 at that point.


#jonathan taylor #colts #indianapolis colts
Top