The Falcons have extended the contract of receiver Julio Jones to the tune of $71.25 million over five years according to ESPN’s Chris Mortensen. The extension had long been rumored and the $14.25 million per year average salary will make him the second highest paid receiver in the NFL. Mortensen reported that $47 million of the contract is guaranteed but it is likely that the full guaratee is less than that and in line with the $32 and $35 million guarantees earned by Dez Bryant and Demaryius Thomas. 

When it comes to valuing such contracts it will be important to look at two different component- cash flows and bonus structure. The Johnson and Thomas deal virtually mimicked the three year payout of the Calvin Johnson extension. This was very different than the recent TY Hilton contract that averaged just $1 million less a season but was in line with the lower $12 million contract tier when examining the cash payout. I would anticipate Jones being closer to Bryant and Thomas.

The bonus structure is important because for cap purposes this is a six year contract and proration of bonuses only goes for five years. That makes the backend of this contract have far less dead money protection than five year contracts signed as free agents. The Falcons have been one of the remaining teams in the NFL to use the two tiered bonus with a signing bonus coming in the year of signing and an option bonus in the second year. If the Falcons used that latter format the Jones contract should have a better chance of being earned (and thus a higher ECV as Bryce will get to when we get the full details) than the other comparables.

I don’t read that much into the massive guarantee for Jones or any of the players at the position for that matter. Jones was under contract this season for nearly $10.2 million all of which was already guaranteed for the season. Basically if the full guarantee is less than $37 million it means from a realistic standpoint that the contract is no more protected than contracts signed by Mike Wallace ($27 million fully guaranteed) and Vincent Jackson ($26 million) as pure free agents.

This is a reason why teams are wise to lock players up before the contract expires. They can easily roll current guarantees or virtual guarantees into a new contract and report it as a massive overall guarantee. For an agent this comes across like a major win— what sounds better playing out the year and getting a $26 million guarantee in free agency or being able to report $36 million in full guarantees today. The end result is basically the same but the second report gets much more play in the press and sounds much better to the football players.

Being that Hilton got such a large extension, even if it was all backend money, it was actually a bit surprising Jones didnt get a bigger contract. Jones is a much better and more complete player than Hilton with a better track record. It probably shows that the Falcons front office sees this as a more realistic four or five year extension rather than a shorter term one with some fluff added in to make it sound better. That was likely  a must for the Falcons if they were going to commit $47 million in injury guarantees. I think this also re-enforces how bad of a job that the Lions did with Johnson years ago and the damage that can be caused by mis-managing a contract.

Next up will be AJ Green who is in a similar contractual position as Jones. These receiver contracts are far beyond any type of contract signed by the Bengals in recent memory so that one may not be coming anytime soon.