Lamar has Been Really Good

Extending Lamar Jackson’s contract is not without risk to the Ravens. When the Ravens drafted Lamar Jackson in the first round of the 2018 draft, the team committed to a very unique player. The Ravens immediately changed its offensive system to deploy Lamar’s otherworldly quickness and athleticism at the quarterback position.  The Ravens’ commitment has paid off handsomely with three straight playoff appearances since Lamar was drafted. 

The team’s recent success has been largely due to the Lamar’s unique talent in the team’s run-first scheme.  When Jackson carries the ball on a designed run, the Ravens have the advantage of an extra blocker.  On a read-option type plays, the defense must always account for Jackson keeping the ball. This often creates huge running lanes for the other backs.  In the passing game, the defense very often has to commit extra players to contain Jackson. This allows the Ravens’ pass catchers to break open for a nice gain.

In his two plus seasons, Jackson is 30-7 as a starter. In that time, he has passed for 7,805 yards and 68 touchdowns, while running for an incredible 2,906 yards and 19 touchdowns. Jackson won the MVP award in just his second season.  Jackson has accomplished this while on a rookie contract in which his cap hits were a mere $1.7 million, $2.1 million and $2.5 million per year, respectively (Profootballreference.com. (www.pro-football-reference.com/players/J/JackLa00.htm).  That’s obviously fantastic value.

The big question now for the Ravens is how long can Jackson play his unique style at this level? 

Lamar is Eligible for an Extension

Lamar is currently eligible for a contract extension.  Although the Ravens don’t have to extend him this offseason, the expectation is that they will. If for no other reason than to reward Jackson for significantly outplaying his rookie contract to this point.  The real questions, and potential risk for the Ravens, are the length and structure of that extension.

Because the Ravens picked up Lamar’s fifth-year option, he is presently under contract through the 2022 season.  This season Lamar’s contract counts a mere $3 million against the cap. In the option year (2022), it jumps up to $23 million.  Even though the option year jumps significantly, it is still a bargain, assuming Lamar remains healthy.

The Ravens could reasonably keep Jackson through the 2023 season, without an extension, by using the franchise tag. Theoretically, they have the ability to keep him through 2024 by using a second franchise tag. However, this would likely be cost-prohibitive from a cap standpoint. 

Not extending Lamar’s contract would be a viable option if the team believes he only has 2-3 elite years left in his legs. That is not completely inconceivable considering the way Lamar plays. However, the likelihood remains that they will offer him an extension this off-season.

Extending Lamar Jackson not without Risk

Extending Lamar’s contract is not without potential risk.  What makes Lamar Jackson great, and different from all other quarterbacks is his off-the-charts speed and athleticism.  Although Lamar has improved his ability to throw from the pocket, he still has limitations in the passing game. Specifically, he has accuracy issues and struggles to throw outside the numbers.  Unless Lamar transforms into a skilled pocket passer, his game will go only as long as his freakish athleticism will take him. 

Lamar has avoided serious injury in his first three years.  This is remarkable considering how often he carries the ball, or uses his legs to extend plays.  How long will he be able to avoid injury and play at top speed while playing this style?  That is a question for the Ravens to consider in negotiating an extension with Lamar.

Potential Contract Structure

In extending Lamar Jackson, the Ravens should attempt to secure a front-loaded contract. Such structure would allow them to move on from Jackson after the 2024 season, if necessary.  This would take Jackson through age 28.  Both sides would benefit from a contract structure where the bulk of the guaranteed money is paid early in the deal. Jackson would receive the security of the guaranteed money early in the contract to protect himself from injury. The Ravens would gain the ability to move on from Jackson if he gets injured, or his play declines in the future, without a significant cap hit. Of course, both sides can always renegotiate the contract in the future if mutually beneficial.

It is unlikely Jackson matches the average annual value (AAV) of Patrick Mahomes’ recent extension of $45M per year. I see the number coming in somewhere between Mahomes’ $45M and the $40 AAV on the contract just signed by Dak Prescott). However, the structure of Mahomes’ deal could be instructive.

https://fantomsportsindustries.com/2021/08/17/deshaun-watson-not-an-option-for-wft/

Mahomes signed a 10-year extension with a potential total value of over $500 million, including incentives. A majority of the guaranteed money is included within the first three years of the extension, including just over $63 million at signing.

These guarantees are largely in the form of roster bonuses. Unlike signing bonuses, roster bonuses trigger a year or two in advance, and do not prorate over the length of the contract. Accordingly, roster bonuses do not accelerate on to a team’s salary cap should the team trade or release the player in future years. ( Haislop, Todd, “Patrick Mahomes Contract Details: Here’s how much guaranteed money Chiefs QB will make in ‘half-billion’ dollar deal. 10 Sept. 2020, msn.com/en-us/sports/nfl/patrick-mahomes-contract-details-heres-how-much-guaranteed-money-chiefs-qb-will-make-in-half-billion-dollar-deal).  Most of Mahomes’ guaranteed money is due by 2023 (his age 28 season). The Ravens should consider a similar structure when extending Lamar Jackson.

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