Inside Josh Allen’s Restructured Contract with the Bills

It was reported earlier this week that the salary cap starved Bills had restructured Josh Allen’s contract for salary cap relief but per a league source, the restructure went a bit further than originally reported and may set the stage for Allen bringing his contract a little more in line with the market as salaries continue to explode across the league.

Prior to the restructure Josh Allen was going to count for $47,056,281 against the salary cap in 2024 and $56,556,281 in 2025. Allen’s salary in 2024 was $30 million which was middle of the league for veteran quarterbacks. The restructured contract saw Allen receive a raise for 2024 by borrowing salary from 2025 and 2028 and in the process knocked down the salary cap numbers for both 2024 and 2025.

Allen’s 2024 compensation rose to $60 million which would have been second in the NFL prior to free agency (it is now third following Kirk Cousins mega contract with the Falcons). This is about $5 million more than Patrick Mahomes earned last season when the Chiefs moved money around in his contract.

The restructure knocked Allen’s 2024 cap number down to $30,356,281 and his 2025 salary cap number down to $43,231,281. That represents savings of $16.7 million in 2024 cap room and $13.325 million in 2025 cap space. His 2026 and 2027 cap numbers increased by $11.675 million in each year.

The thing to look at going forward is if the Bills have put themselves in a position to have to continuously move salary around to make sure that their star QB, who is on a contract that has been lapped by the market, remains happy until it comes time to extend him. This restructure was not as extensive as the Chiefs one with Mahomes. In Mahomes restructure he received an increase in salary of $43.3 million from 2023 to 2026 with a drop in salary of $43.3 million in the 2027 through 2031 years. While Allen’s salary increased this year by $30 million the increase over the next two years is only $5 million since $25 million was borrowed from 2025 rather than later in the contract.

Allen’s 2026 contract year is structured very similar to his original 2025 contract year. The team could move his $15 million roster bonus into 2025 next year to bring Allen’s cash salary up from $14.5 million to $29.5 million and maybe borrow a few more dollars from the future to increase it a bit more.  By using bonus mechanisms to prorate the money it would not have a negative short term on the Bills salary cap.

The Bills have generally been willing, for better or worse, to do extensions for their veteran players when they have two years remaining on their contract. For Allen that would be 2027. The goal should probably be to move as much money out of 2027 and 2028 and into 2025 and 2026 over the next two years. If Allen’s agents are able to get the Bills to do similar moves year by year it is conceivable that Allen could go from his original contract which would pay him $108 million from 2024 to 2026 to $148 million over the same time period.

While that lowers his 2027 and 2028 salaries considerably and odds are those low salaries would need to be honored at some point in an extension, the way that contract are structured his cash salary would explode in the 2027 year if extended and more than cover what was borrowed.

If Mahomes and Allen are able to pull this off it could change some of the quarterback dynamics when it comes to contracts in the future. A generation ago teams often were rewarded when they extended QB’s early to get ahead of the market as the quarterbacks usually played those contracts out and by the end the players were tremendously undervalued. This could give teams less incentive to rush into extensions where they think they are beating the market or to do some of these longer term deals where they continuously guarantee future salary in return for low annual values. So I think this is important to watch for how the market plays out as the other 30 teams are watching the way things unfold in Kansas City and Buffalo.