Thoughts on Joey Bosa’s $135M Contract

The official numbers are in for Chargers defensive end Joey Bosa per Mike Florio at PFT and the numbers on the deal are indeed real at $135 million in new money over 5 years. Bosa will have $78 million guaranteed at signing and $102 million virtually guaranteed over the life of the contract. Now that we have the numbers let’s break things down.

The contract itself is a good example as to how many contracts work in the NFL and the way that teams can keep some semblance of normalcy within a contract even by obliterating the market in terms of annual value. Bosa’s contract will average $3.5 million more per year than Khalil Mack of the Bears (he will be $2 million more than Myles Garrett but I have been unable to track those down so if anyone has any info send it over so we can analyze that too) but at closer inspection the contract is not that much different on the front end. Here are the cash flow comparisons of the two deals.

The raises themselves are moderate in the extension year and Mack actually earns slightly more than Bosa in the first year of the deal. The real turn in contract value come in year three when the gap grows from $3.786 million to $10.54 million, which averages out to $3.5M per year, which the expected gap between the two contracts. That actually grows even higher in year four and five. Bosa also has the benefit of only having a five year contract versus Mack’s 6 year contract.

This is a technique that we see often in contracts. Basically you are willing to do a deal that is a market or slightly above market deal on the front end but are willing by the third year to explode past it. Bosa’s salary in the third year is virtually guaranteed so he will actually earn it though in many cases that would not be the case. This is a much better model for the team than the contract that just blows away the market from day one.

The contract also is a good example of the kind of raise that we should expect to see for true elite level talent. Had the Chargers gone the franchise tag game Bosa would have earned $17.2 million in 2021 and $37.9 million through 2022. Instead he will earn over $63 million in new money, a gigantic 66% premium. It is hard to project what a third franchise tag would cost that far into the game, but it would be cheaper than what they are paying him for the rights to the last two years of the contract and to avoid a holdout. When you have players of this caliber there is no reason to not shoot for the moon and they got that here.

The $78 million in guarantees at signing put Bosa firmly in quarterback territory. Still it’s not something where you can compare the contracts which is a trap that many will fall into. Bosa will earn $42.4M in new money by the end of his first new year- Matt Ryan earned nearly $55 million and Russell Wilson earned $70 million. These are still apples to oranges comparisons for now.

I think the Chargers salary cap structure is interesting. Bosa’s cap number does not change much this year (unless they truly fully guaranteed a roster bonus) moving from $14.36 to $15 million. They had room to make it higher but my guess is this was their tolerance for salary increases this year and they prefer to carry the money over to next season. He will also have a very manageable $20.75M cap hit next year which is important for a year in which the cap is expected to dramatically fall.

I also see that lower number as keeping the door open to bring back Tyrod Taylor on a more expensive contract if he has a very good season that lands the team in the playoffs. The tag would be in the mid 20’s next year and this now opens the tag and the cap required if they go that route. If they don’t need it they have plenty of cap room to sign a few players.

The big spikes in cap charges come in 2022, 2023, and 2024. His numbers spike to $28.25M, $31(!)M, and $29M those three years. Those are the three years that should coincide, no matter what happens, with the rookie years of Justin Herbert. Herbet will cost just $7.3M and $8.5M on the cap in 2022 and 2023 and will either have a manageable cap number on an extension in 2024 or be off the team and they will start anew with another young player. The final contract year which would coincide, if things go well, for a monster QB contract extension will have a cap of just $25.36M.

There is no real negative for Bosa in this at all. Bosa also receives bonuses in the offseason of the last two contract years which is a mechanism to give him a partial guarantee those years. If the Chargers feel a cap pinch in that $31M cap year they will restructure which just opens up more virtually locked in salary in 2024. It’s a blow away contract for him with zero downside. By every metric it’s a game changer and it will serve as a model for plenty of players who should view themselves as more than a basic franchise player.

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