With Lamar Jackson reaching the end of his third season in the NFL, when can we expect to see him sign a new contract? Let’s take a look at how long is left on Lamar Jackson’s current contract, when the Ravens may look to offer him another one, and how much he could be set to earn.
Lamar Jackson has up to two years remaining on his rookie deal
After being drafted with the 32nd selection by the Baltimore Ravens in the 2018 NFL Draft, Lamar Jackson signed a four-year, $9.47 million contract. However, all first-round picks have a team option for a fifth season in their contract. Teams have a window between the end of the player’s third season and May 3 to exercise this option.
Players who have their option exercised are signed for a fifth season to a fixed, non-negotiable amount. Starting from the 2018 NFL Draft class, the amount players earn in their option year is dependent on performance. Additionally, the fifth-year option is guaranteed the moment it is exercised.
How much is Lamar Jackson set to earn in the remainder of his rookie deal?
Let’s assume that the Baltimore Ravens will exercise the fifth-year option for Lamar Jackson. As Jackson was named to the Pro Bowl in 2020 his fifth-year option salary will be equal to that of the transition tag for the QB position in 2021. Currently, that is set to be valued at $21.2 million. Had Jackson been named to the Pro Bowl in either 2019 or 2021, he would have earned the equivalent of the franchise tag at the QB position ($23.5 million).
Additionally, Jackson is set to earn $1.77 million in the fourth year of his contract. Therefore, Lamar Jackson is set to earn approximately $23 million in the final two years of his rookie contract.
When may the Ravens look to extend his deal?
NFL players on their rookie contract cannot extend their deal until they have finished their third season. Last offseason saw the likes of Myles Garrett, Christian McCaffrey, Patrick Mahomes, and Deshaun Watson sign contracts in the first year they were eligible to.
Some of these players sign extensions almost immediately, while it can take longer for others. The Panthers locked up McCaffrey in April, Mahomes signed in July, while Watson had to wait until September.
It would be somewhat surprising not to see the Baltimore Ravens and Lamar Jackson agree to an extension during the upcoming offseason. However, the current financial climate of the NFL may lead to prolonged discussion. The Ravens have Jackson under contract at $11.5 million per year for the next two seasons so there is no immediate rush.
They can also franchise tag Jackson in 2023 if they want to extend that further. The cost of that franchise tag is set to be $23.5 million in 2021. However, due to the salary cap situation in 2021, that is significantly lower than it is expected to be in 2022 or 2023. For example, Dak Prescott’s franchise tag contract was worth $31 million in 2020.
How much could Lamar Jackson earn on his next deal?
The crucial first step is to understand that any contract Jackson signs will be considered an extension. Most likely it will be an extension including the fifth-year option. Therefore, while Lamar Jackson may sign a four-year contract extension, it would actually sign him to Baltimore through the next six seasons. For example, when Patrick Mahomes signed his 10-year contract extension he is signed for 12 seasons through to 2031.
Could Jackson get close to the deal Mahomes signed?
Patrick Mahomes’ 10-year contract extension made him the highest-paid quarterback in the NFL. The extension is worth $450 million, with the remainder of his rookie deal taking it to $480 million. The reason Jackson compares with Mahomes is that they both won the NFL MVP in their second season in the league. Both also played limited snaps in their rookie seasons.
However, Mahomes is generally regarded as the better QB of the two. Additionally, he also won a Super Bowl with the Kansas City Chiefs in his third season. When Mahomes got his extension, he had already won four playoff games. His only loss had been to Brady in the AFC Championship game in 2018.
In contrast, Jackson lost both of his first two playoff games. All of this goes to emphasize that we are likely not looking at Jackson matching Mahomes deal of $45 million per year over 10 years.
Which other QB contracts can we judge Jackson against?
Judging Lamar Jackson and his future contract against any other QB is somewhat tough. Jackson is a different style of QB to anything in the league right now. However, the deals that most closely compare to what we might expect to see Jackson sign are the deals of Deshaun Watson, Russell Wilson, and Carson Wentz.
All three of those QB were or are willing to use their legs to make plays. Jackson is a far more threatening option in the run game, but they are the closest comparisons.
In terms of average annual value, Watson earns $39 million, Wilson earns $35 million, and Wentz is at $32. One thing Jackson has to his advantage is that both Watson and Wentz signed those deals after having suffered season-ending injuries in prior years. Therefore, Jackson can point to his relatively clean injury history and push for more money on a yearly basis.
What could Lamar Jackson’s contract be worth?
According to Spotrac, Lamar Jackson has a market value of around $43.5 million per year on a four-year contract extension. Bridging the gap in annual value between Mahomes at $45 million and Watson at $39 million seems reasonable.
Additionally, we should see Dak Prescott sign a new contract around the $40 million per year mark this offseason. Jackson likely holds off signing any deal to see what Prescott gets. He may even wait and see what size extensions Baker Mayfield and Josh Allen sign.
How could Jackson’s contract be structured?
The intriguing part will be the makeup of the deal. Any signing bonus Jackson gets will immediately impact the Ravens’ salary cap in 2021. The Ravens have a projected $26 million in space, but they will want to save as much for improving their roster as possible. Therefore, any extension Jackson signs may not carry a big signing bonus. Mahomes’ deal had just a $10 million signing bonus, while Watson got $27 million.
Instead of a lucrative signing bonus, look for the Ravens to guarantee a large portion of Jackson’s contract. This may be in the form of regular roster bonuses in each year of the deal from the second season on. That way, Jackson gets a lump sum of money each season and is protected by the guarantees if he gets cut.
A similar style of contract as Mahomes’ should be what the Ravens and Lamar Jackson work towards. This would include a system where future money guarantees on the contract are a year or two in advance.
Right now, a projected contract extension for Lamar Jackson should look something close to five years at around $212.5 million. The value would be $42.5 million per year, clearly ahead of Watson, but enough below Mahomes. The fifth-year on the deal would serve as a nod to Jackson having been the league MVP in 2019.