Deep Dive into the Trevor Lawrence $275M Contract Extension

The numbers are in for Trevor Lawrence’s $275 million contract extension with the Jaguars thanks to Pro Football Talk, which gives us a far better idea as to how this deal stacks up against the rest of the market.

The Cash Flows

The first thing we should be looking at with any of these extensions are the way that the new money cash flows break down. This can give you a strong idea as to whether or not a contract like this will move the market or is just keeping up with the market. Here is how the cash stacks up against the other top five QB contracts in the NFL (Year 0 is new money paid over the existing contract years of the prior contracts- 2024 and 2025 in Lawrence’s case).

PlayerYear 0Year 1Year 2Year 3Year 4Year 5
Joe Burrow$76,210,982$111,460,982$146,710,982$183,960,982$224,460,982$275,000,000
Trevor Lawrence$45,158,707$82,658,707$124,158,707$170,658,707$221,158,707$275,000,000
Justin Herbert$40,000,000$100,000,000$124,000,000$160,000,000$212,000,000$262,500,000
Jared Goff$52,000,000$70,000,000$125,000,000$165,000,000$212,000,000FA
Lamar Jackson$0$80,000,000$112,500,000$156,000,000$208,000,000$260,000,000
Jalen Hurts$20,000,000$60,000,000$102,000,000$153,000,000$204,000,000$255,000,000

The first thing that stands out here, at least to me, is that they seemed to worked backwards off of Burrow’s $275 million rather than forward leading into the $275 million. Lawrence cash flows in 24 and 25 are basically a minor step up from Justin Herbert and through the first new year a massive step back from Herbert. He will catch up to Herbert in year two. This is similar to the Jared Goff structure.

By year three they more or less are splitting the difference between Burrow and Herbert or mimicking the increase Goff had over Herbert. In year 4 we finally pull closer to Burrow and then match in year five.

When I wrote about Lawrence a few weeks back I mentioned one of my concerns with him was the lack of playoff/regular season success when trying to peg him to Burrow.  It was a reason why I felt playing out this year may have had a high reward factor for him. The contract here clearly mimics Herbert which was the standard for a solid young QB whose teams had not really delivered on the field. The non guaranteed backend seasons are where he gets into Burrow territory.

That’s not to say there is anything wrong with the contract but I don’t think it sets a standard that will be meaningful for other QBs. The market basically remains unchanged in that respect especially since Lawrence’s draft status will make him a hard comparison for other young players like Tua.

The Guarantees

$200 million of the contract is guaranteed for injury with $142 million fully guaranteed at signing. This number also splits the difference between Burrow and Herbert.

PlayerYearsInjury GuaranteeFull GuaranteeNew Injury Guarantee% New Guarantee
Jared Goff4$170,611,832$113,611,832$142,000,00067.0%
Jalen Hurts5$179,304,000$110,000,000$175,000,00068.6%
Lamar Jackson5$185,000,000$135,000,000$185,000,00071.2%
Justin Herbert5$193,738,375$133,738,375$160,000,00061.0%
Trevor Lawrence5$200,000,000$142,000,000$168,658,70761.3%
Joe Burrow5$219,010,000$146,510,000$183,960,98266.9%

Both Herbert and Lawrence ended up with lower guarantees here than the others because they had more existing salaries. This is one of the negatives for players with larger existing P5s over multiple years focusing on the total guarantee number rather than the amount of new money that is being guaranteed.

The guarantee structure is similar to the market in that the injury guarantee is likely to be earned as a full guarantee due to the early vesting dates. Here is how much salary would be earned if Lawrence was cut at any point in the contract.

OutcomeEarnedNew Money EarnedAPY% Earned
Cut 2025$142,000,000$110,658,707$110,658,70740.2%
Cut 2026$142,500,000$111,158,707$111,158,70740.4%
Cut 2027$155,000,000$123,658,707$123,658,70745.0%
Cut 2028$201,500,000$170,158,707$85,079,35461.9%
Cut 2029$202,000,000$170,658,707$56,886,23662.1%
Cut 2030$252,500,000$221,158,707$55,289,67780.4%
Plays contract$306,341,293$275,000,000$55,000,000100.0%

Essentially 62% of the contract is guaranteed to be earned as no other out in the contract would really make any sense for the Jaguars unless Lawrence somehow forgot how to throw a football.

The Salary Cap Structure

The Jaguars almost followed the Eagles contract model by placing gigantic option bonuses in almost every year of the contract. This allows the team to maintain low salary cap charges through 2027 and a reasonable charge in 2028 before the numbers explode in 2029 and 2030. If The Jaguars determine the contract was a mistake they would likely decline one of the later options to make it a little less painful on the cap to release him in 2029 or 2030. I would not be surprised if there were void years running way later into the contract (i.e 2035) as the “option years” to allow them to do just that and not trigger acceleration from any standard void years which are likely part of the contract.

Lawrence has a no trade clause which has also become more standard for QBs, but I always consider those to be pretty meaningless since most players are not going to want to remain in a bad situation. Those options would give the team a little salary cap wiggle room if it came to that and my assumption would be that 2028 would be the year a trade could happen if things went that sideways.

If things are going well the cap structure would likely indicate 2029 as a big year for a possible extension. The salary cap charge should be close to $80 million at that point and even with a rising cap would be a big number. Restructuring that year is always possible but would give the player huge leverage in a contract year. A $75 million cap figure in 2030 would put his 2031 tag figure at $89.66 million to go along with $21 million in void year charges.

Overall Thoughts

This is a solid contract but not something that I would consider a market mover in any way. The numbers showed that Lawrence probably wanted the deal done more than the Jaguars did right now as there would have been no harm in waiting to see if someone the Dolphins or Packers did something crazy with their young QBs in the next two months or if the Cowboys did something with Dak Prescott. It mainly just solidifies a range for the very good young player with upside whose team hasn’t exactly had success while at the same time the player is by no means a failure.

Lawrence, like Herbert, won’t get a pass anymore if his team falters. Rightly or wrongly the money changes the expectations and this will go the same way as Herbert where we saw Herbert detractors begin to show in 2023 with people asking about the cost of a trade. It makes 2024 a big year for Lawrence and it’s a big win for the Jaguars if he hits that high since it would have spiked his value by $5M a year and millions more in cash payments.

On a leaguewide basis I do think we are reaching a fundamental breaking point in the short term approach teams are taking to roster construction. With these types of guarantee structures the teams are basically opting into 60-70% of a contract at signing. Unless you have a Mahomes that’s a huge risk. The reward on contracts of this magnitude should come by getting multiple backend years where the cost of the contract begins to lag the market.  The minimum length needs to be six years and you have to structure the contracts in a manner to not just hand over the leverage on an extension.

These structures where teams are petrified of taking on any large cap hits on the front end of the contract lead to contracts that read five years in length but you could easily argue are only 3 or 4 years in length due to those massive salary cap figures in the final two contract years.  Those numbers will either be harder to manage or lead to an extension at whatever the current rate will be so the team can drop the cap charges again. That is not going to be a winning formula for 90% or so of the NFL.

Competing with the ultra cheap rookie QB is difficult and it is one of the reasons why the top 10 paid QBs don’t have anything more than an average rate of making the playoffs (its about 42% of the top paid who make it). The structures we are seeing across the NFL where teams are trying their best to maintain an extended “rookie-ish” cap window makes these have lower odds of success down the line without really capturing the real rookie benefits which are related to both cash and cap breakdowns.

It is a different topic entirely but I think much of this boils down to teams simply not filling potential expensive positions in the draft outside of QB. Just looking at the Jaguars a bit here. Is there a point to draft a RB the same year you draft a QB? Should you draft a linebacker the same year you sign a good $15M per year linebacker? Should you draft a 2nd round tight end the same year you extend a $14M per year tight end?  These are the kind of decisions that require you to do these things with the QB contract because now you feel the need to sign Arik Armstead, Gabe Davis, etc…when maybe you could have filled those slots with younger and cheaper players. The decision seems to boil down to  “what can we do with the QB numbers so we can fill these voids we have this year and next” rather than “what’s the best structure for a QB contract so we can maximize our roster every year”.

Go and look at the way that the Chiefs have handled Mahomes’ contract. It has been a long term approach. They have determined when they have had to strike on the cap numbers in the contract and how to minimize the long term constraints that might come with it.  In the first five years of Mahomes’ contract there have been two seasons where he played for about the minimum with the rest being prorated. Those were the first two years of the contract, the first of which only carried a $10 million bonus so basically it left his rookie deal untouched for one year.

The first three years of Lawrences contract are designed to be around minimum salaries. The first five years of his contract contain $177.5 million in bonuses, 87.9 % of the entire contract value in that time. Mahomes, even after receiving raises from the team, has had $91.3 million paid as bonuses in the first five years. That is 66% of the salary paid over that time. Mahomes is obviously the best QB in the NFL but I think it is also safe to say that the Chiefs have built one of the better rosters in the NFL around him and partially that is due to taking a more measured approach to his contract and team building around that contract. They run deep into the playoffs every year. There is something to learn from that but I think team’s are missing that aspect of it entirely and the Jaguars are another team to fall victim to it with their QB contract.