Lamar Jackson and the Baltimore Ravens have decided to table contract negotiations until after the season ending one of the more intriguing offseason contract stories in recent memory. Jackson had decided to represent himself in these negotiations which took out most of the public posturing and leaking that usually occurs which is what made the story stand out much more than any other recent contract negotiation. While I’ve discussed this often on the OTC podcast, I wanted to jump and share my opinions in a post and answer some of the questions that have popped up on my timeline today about what’s next.

Since day one I always thought this was going to be a very difficult negotiation to get done. Jackson had stated that he wanted to be the highest paid player in the NFL and while that is a reasonable expectation in recent years the Ravens have been hesitant to do that with their players. More often than not the Ravens have looked for discounts on the annual contract value and in return have offered very strong cash flows up front and often more guarantees than comparable players depending on the level of discount.

Here are a few examples of how that strategy works

Stanley got by far the biggest bump in first year new money with a massive raise over the market high and also a huge increase in guaranteed salary. In return he signed for 10% less than Tunsil and took an additional two seasons on the deal which makes the effective number far more than 10% over those five years.

The other two players have around a 25% bump in pay and took under the market in guaranteed salary, however those annual values are closer to the top and in Andrews case he only had to sign for four years.

In these three different cases I think you can get a feel for some of the tradeoffs that occur in these contracts. I do believe that these are the kind of discussions where having an agent to go through the pros and cons of such contracts is beneficial with a willingness to bend on some of the initial wants, which in this case were the highest paid at the position and a fully guaranteed deal while also going through some of the minutiae of the contract. That is not to say that Jackson can’t or didn’t do that on his own, I just know from experience learning the ins and outs of NFL contracts that it takes time and I personally feel as if I an learning new things all the time regarding contracts and the way that thinking changes over time around the league and from team to team. In any event my thought was the two sides were just going to be looking at dramatically different things here and bridging any gaps could be harder than normal.

When the talks began between Jackson and the Ravens the landscape was also different. Deshaun Watson had not signed a fully guaranteed contract and the market was pretty much locked at $45M a season which was the annual value of Mahomes’ contract. Aaron Rodgers threw a bit of a blip in the mix but Watson reaching $46M a year was really the game changer.  Prior to that I would guess the Ravens would have offered Jackson a deal that would have been anywhere between Dak Prescott ($40M) and Mahomes with the main fluctuations based on those cash flow and guarantee considerations. My thought would have been a high of $44.5M a year on a traditional contract and perhaps as a last resort an offer of $41-$42M a year with the deal potentially being fully guaranteed or close to it to hit a historic high. Once Watson did that deal this would all be a pipe dream.

Kyler Murray recently signed a contract for $46M a year and that was followed by Russell Wilson signing for $49 million a year. That pushes the market for Jackson to at least $50 million a season which probably pushes things way up for the Ravens from where they wanted to be. Throw in wanting a fully guaranteed contract on top of that and it is probably an impossible bridge to cross which is how you get to today.

Obviously, there are risks in this approach for the Ravens. Jackson will be a free agent at the end of the season and their only realistic option, even if they want to trade him, is to use the exclusive franchise tag on Jackson. The regular franchise tag cost will be between $31 and $33 million but that opens Jackson up to free agency where teams will pounce on him. The Ravens would have limited cap space to work with if a team made a very strong offer for Jackson that frontloaded the salary cap charges, potentially making an offer that they can not match. They would only receive two first round picks in that scenario, the same price the Seahawks paid for Jamal Adams, so the exclusive tag is the only deal that would make sense here even if just to max trade compensation.

The current exclusive tender cost is about $45 million in 2023. That number is not set in stone and can go up or down based on roster decisions teams make between now and next March but from the Ravens point of view they have to assume this will be the price. They probably don’t care as much about the cash number there but it does become challenging on the cap. We project Baltimore to have about $45 million in cap room next year assuming they make no futures signings so it would leave them with little to work with in the offseason while they sort the contract out.

I would consider another market change between now and next March to be low. Baker Mayfield is the only name free agent and it is highly unlikely that he is going to earn more than $50 million a season. The names who will push the market- Joe Burrow and Justin Herbert- likely would not sign extensions until the summer. So I think the Ravens would feel that the time frame here will be to try to find a new way to find common ground between now and next July.

The other benefit would be, even if the market is pushed slightly, the fact that none of the other players will likely receive any type of fully guaranteed contract. While you can not guarantee that will be the case, the history around the NFL has been that the fully guaranteed deals have impacted nothing.

Jackson also has some risks with this strategy. The threat of injury is real though I think it is overplayed by many. In the last six years I can only think of two QB injuries to starting players that would have impacted negotiations- the Teddy Bridgewater injury in 2016 and Alex Smith’s injury in 2018. Everything else at this position is pretty much glossed over so even if he carries a slightly higher risk due to running so much I wouldn’t worry about it the way you would a receiver or cornerback.

The second issue comes from the sense that there is going to be a delay in getting paid. While we have no idea what kind of contract offer was made for the sake of argument let’s say it looked like this ($48M/year over 5 new years):

Assuming the exclusive tag remains stable what would be the comparable cash flows while playing on the tag?

Basically you would have to wait until 2025 before the contract turns in your favor if you wind up playing out franchise tags. The Ravens would offset some of that difference by having more cash on hand assuming it is simply being set aside for him and invested. Certainly if the two sides come to an agreement next year without going the tag route the Ravens come out ahead with the delay if the numbers are in this ballpark.

Over the long term the numbers skew more in Jackson’s favor but this is also dependent on the exclusive tag not changing next year. Both sides have a risk here. The way that the process works is that once the tag is applied to Jackson any reductions in cap charges do not count, but before that time they do. Would teams try to screw over the Ravens (namely their division rivals in Cleveland) by holding off on restructures until the last second or would they prefer to see the market held by Jackson having less long term leverage?  Do agent of players quickly suggest restructures because they have a vested interest in not seeing a self represented player get a massive new contract? Anything is possible.

Here are the current top 10 players at the position and their count towards the exclusive tag

As you can see other than a handful of teams on the list most find themselves needing to create cap space in 2023. If Watson dropped out the number would fall to $42 million next year. If Prescott dropped out it would be $43 million. If both dropped out it would be $38.7 million which changes the money figures dramatically for Watson.  Nobody will see their cap charge increase next year to bump up this figure so the math works in the Ravens favor even if the timing does not.

Both sides will have the knowledge of what the tag will be next March which is likely when talks heat up unless there is a big change of direction during the season (the Ravens are a team that does in season extensions though this is a unique circumstance). Neither side probably loses by waiting but the leverage can move more into the Ravens direction if the exclusive tag drops down.

That said I like the idea of quarterbacks playing the tag out. The way to “punch your own ticket” when it comes to maximizing money in the NFL is to be able to hit free agency. Being a free agent is what landed Cousins a fully guaranteed contract and led to a quite lucrative run with the Vikings while Watson being treated as a free agent led to that legendary contract.

For almost any other positions playing out the tag is not an option. A year in the NFL is a long time. Careers are short and players age very quickly. A star in 2022 may not be a star in 2023 and the odds would be against being a star in 2024 or 2025. So there you work within the system. For QB’s there is a massive bright light at the end of the tunnel since you can keep playing until your mid 30s and probably keep getting paid until your late 30’s if you are good enough. Losing those two tag years isn’t a bad thing the way it might be for everyone else.

Years ago I thought this was the path that Andrew Luck should have taken to really revitalize what was a stagnant QB market. It never materialized and other than Cousins, who was considered a good but not great player, nobody has done it. Dak Prescott made it to a 2^nd tag and used that number to help leverage a great contract which will benefit him come time for his next contract negotiation but he still is not totally free.

I actually think the biggest contribution that Jackson could make would be to go the tag route. If he is dug in on receiving a fully guaranteed contract that may be the only way to get there but ultimately it probably would also lead to the most career earnings though it carries more risk than just doing a good deal now.

For the time being I think the delay favors the Ravens but the longer the delay goes the more Jackson gains leverage even if not toward a fully guaranteed contract. It will be interesting to see how he plays it next offseason, but that is a long time away and something we’ll begin discussing again next winter.