In my business of sports class last semester, we did a mock negotiation between the Jacksonville Jaguars and Trevor Lawrence. Half of the students represented the Jaguars; half represented Lawrence. They were given some direction, although not too much, and had access to data points for recent NFL quarterback contract extensions, both with players similar in age to Lawrence (Joe Burrow, Justin Herbert, Jalen Hurts and Daniel Jones) and those a bit older and more experienced (Dak Prescott, Jared Goff, Kirk Cousins and Lamar Jackson).
Now that the contract has been negotiated in real life, it is interesting to see how close the students came to the actual numbers. Lawrence signed a five-year extension, meaning he is now under contract for seven more years, with $142 million of “true” guarantees—rock solid money that is sure to be paid—and another $58 million of other guarantees that convert to true guarantees at a later date.
As I teach my students, it is important to understand what an NFL contract extension really means and look deeper inside the numbers to see what the “real deal” is. Class is now in session.
NFL contract extensions do not “kick in” after the remaining years of an existing contract. Rather, the extension years are rolled into the existing years to create a new contract that replaces the old one.
In the NBA, where there are fully guaranteed contracts, a contract extension usually means the existing years are unchanged, and the new years do, in fact, kick in after that. But in the NFL, where contracts are not guaranteed, there would be no reason for a player to agree to a contract that does not change his existing years.
Thus, the annual average of $55 million for Lawrence’s extension years is much higher than the annual average for his overall contract with the Jaguars. The overall contract has an annual average of $43 million. Not that there’s anything wrong with making $43 million a year; but it is certainly not $55 million a year.
I realize agents and media focus on the extension years average only, as it is a splashier number and a bigger sell for the agents, but it is not exactly the new deal.
Many people ask how I evaluate contracts. They wonder if it is by the guarantees (yes, to some extent), signing bonus (yes, to some extent), number of years (yes, the more the better for the team, the fewer the better for the player) or total value (irrelevant, unless you’re Deshaun Watson). These all have importance, but to me, it is much simpler than that.
The questions I ask—whether as an agent, a team executive or an analyst—are simple: What is the player taking home in cash on a year-by-year basis? And how does that compare to similar players?
I say it all the time: Ignore the salary cap; the cap is just accounting. Focus on the cash: the cold, hard cash.
I focus on what the player is making year-by-year for the “realistic” portion of the contract. For most positions, that is two, or maybe three, years (for running backs, it may just be one year). For quarterbacks, I analyze year-by-year cash over four years, sometimes more. This, more than any other marker, is the most important evaluation metric for the business of NFL player contracts.
And this is where Lawrence’s new contract is dramatically deficient.
I analyzed the one-year cash, two-year cash, three-year cash and four-year cash of this contract, relative to a few peers, and here is the bottom—pun intended—line: Lawrence is dead last in every category.
One-year cash:
Lawrence will make $39 million in the first year of his contract. That is last among all recent quarterback contracts, far behind Goff ($80.6 million), Jackson ($80 million), Cousins ($62 million), Jones ($46 million) and Burrow ($45 million).
Two-year cash:
Lawrence will make $76.5 million over the first two years of his contract. That is last among all recent quarterback contracts, far behind Jackson and Burrow ($111 million), Goff ($98 million), Watson ($92 million) and Cousins ($90 million).
Three-year cash:
Lawrence will make $114 million over the first three years of his contract. That is last among all recent quarterback contracts, far behind Jackson ($155 million), Goff ($153 million), Burrow ($146 million), Watson ($138 million) and Herbert ($133 million).
Four-year cash:
Lawrence will make $155 million over the first three years of his contract. That is last among all recent contracts, far behind Jackson ($207 million), Goff ($193 million), Burrow ($181 million), Jones ($160 million) and Herbert ($157 million).
If you are sensing a theme, you are correct. In the key markers of “how much” the contract earns for the player after one, two, three or four years, Lawrence brings up the rear compared to his peers in all categories.
So much for that record-breaking contract.
As we await contract extensions that may soon come for Prescott, Jordan Love and Tua Tagovailoa—all in the final year of their contracts—please remember this lesson as you read the splashy numbers in the media. And I’ll be back here to analyze those deals on a cash basis to see their strength or, as with Lawrence, lack thereof.
The explosion in the wide receiver market started a couple of years ago, with two players traded and simultaneously rewarded with then record $25 million-a-year contracts from their new teams: Tyreek Hill to the Miami Dolphins and Davante Adams to the Las Vegas Raiders. While those two deals were once outliers, they have now been joined by a host of contract extensions for ascending wide receivers (Amon-Ra St. Brown, DeVonta Smith, Michael Pittman Jr., Nico Collins and Justin Jefferson) as well as veterans (A.J. Brown and Calvin Ridley). Now, $25 million a year for the extension years, or more, is the norm for top young wideouts, as we wait for Ja’Marr Chase and CeeDee Lamb, who will point to Jefferson as their target contract.
In applying my yearly cash analysis to this wide receiver group, a few things are abundantly clear: Jefferson’s deal is the best, Smith’s is the worst and Pittman’s is the most interesting.
No one is close to Jefferson. He laps the field in two-year cash ($70 million), three-year cash ($95 million) and four-year cash ($126 million).
In sharp contrast, Smith is second-to-last in two-year cash ($34 million, only above Collins’s $33 million), and last in three-year cash ($48 million) and four-year cash ($69 million). Smith is making less in four years than Jefferson is making in two years. The Eagles continue to sign team-friendly deals with their top players.
I am most intrigued by Pittman’s contract with the Indianapolis Colts. Not only is his three-year cash of $70 million strong, behind only Jefferson and Brown, but the contract ends there; it was only a three-year deal. Thus, in three years, Pittman will have $70 million and another bite at the free-agency bonanza at age 29. That’s shrewd on his part, as his career earnings should vault ahead of everyone but Jefferson.
I hope you have a better understanding of evaluating contracts after this lecture.
Class dismissed.
In NFL owners meetings, there are often sessions that are labeled “one per club,” meaning everyone except the principal owner is kicked out of the room. In those sessions, there are 31 individual owners and the Green Bay Packers’ president/CEO, an anomaly of the only publicly owned franchise in the league. In my time with the Packers, that person was Bob Harlan. It is now Mark Murphy, and starting in July 2025 it will be Ed Policy.
I don’t know Policy well, as he came to the Packers in 2012, after I had left, but I know he is respected around the league. Many owners have known him since he was a teenager, as his father, Carmen, served as president of both the San Francisco 49ers (1991 to ’97) and the Cleveland Browns (’98 to 2004). More importantly, Policy is highly thought of inside the Packers’ organization, especially by Murphy and the executive committee, whose vote counted most. I had heard that there was never really a thought from the search process to go elsewhere; Policy was the leader in the clubhouse from the start.
Policy is general counsel for the Packers, a title that I had as well. However, my role was more “football general counsel,” a role now manned by Russ Ball that consists of negotiating player contracts, managing the salary cap, dealing with player disputes, etc. Policy is more of a corporate counsel, dealing with stadium issues, real estate transactions, local politics, sponsorship and licensing contracts, etc. I point this out to say that in selecting a president
from the business and administrative side, the Packers will still be deferential to football operations as has been the case for decades. The president/CEO will continue to not be a “football guy,” and the general manager—whether Ron Wolf, Ted Thompson or now Brian Gutekunst—will still have the most autonomy of any general manager in the NFL, if not in all major professional sports.
And, to those who have asked: No, I did not put my name in the hat for the role. I have very fond memories of my time with the Packers and living in Green Bay for almost 10 years, but for me, that was a chapter of my life and career, not a life or a career.
