The Buffalo Bills and their fans believe they’ve found the quarterback of the future in Josh Allen, the team’s 2018 first-round selection. Naturally now that the Bills have picked up his fifth-year option for the 2022 season, talks turn to a long-term contract extension.
While general manager Brandon Beane and Allen have spoken of a desire to get a deal done this offseason, I still think that’s a long shot. Buffalo is close to the salary cap number in 2021 and with 2022 already guaranteed for both sides, I think it’s more likely something gets done next offseason.
Some folks are clamoring for the Bills to get ahead of contracts for Baker Mayfield and Lamar Jackson, but I don’t see the rush for any of those teams, frankly. They know they have 2021 and 2022 to evaluate these QBs before committing a Brinks truck to them in the future. Look at the bind the Philadelphia Eagles and Los Angeles Rams found themselves in this offseason for cautionary tales. Plus, the reason to get out ahead is so you have a cheaper contract instead of playing the one-upsmanship game, but the difference is only a few millions dollars over the length of the contract. It’ll save you money in the long run to be prudent and patient.
In this thought experiment, I’ll lay out some existing contracts that will be used as guides for the deal and also talk about how to make the financials work in the short term for it to make sense to get the deal done in 2021, even if 2022 is more likely as I said.
Comparable contracts
Patrick Mahomes
2020
Ten years, $450 million with $63 million fully guaranteed
I am going to be blunt; this is one of the worst player contracts in the NFL. I am only mentioning it here because lots of Bills fans are going to want something similar, but if I’m Allen or his representation, I’m staying away from this. Mahomes added onto his rookie deal and was paid just $11 million in year one (base salary plus $10 million signing bonus) and will make $23 million in year two (base salary plus $22 million option bonus) with year three seeing $29.5 million in cash. In the first three years of the deal, he’s only making $64 million and you’ll see why that’s chump change in a minute. The first $40-million season isn’t until Year 4 of the deal in 2023. The deal includes rolling guarantees, where the next season’s big roster bonus and salary are guaranteed during the previous offseason.
Dak Prescott
2021
Four years, $160 million with $95 million fully guaranteed
Remember when I said Mahomes is making $64 million in the first three combined years of his deal? Prescott cashed a check for $60 million on the day he signed the contract. That’s why the Mahomes deal is so bad; he has to wait so long to see the cash. The Cowboys added a void year on the back end to spread out that massive signing bonus, allowing them to average it out over five years, not four. They also have another additional void year to accommodate restructures down the line. Cap hits that go up by $10 million each year for the first three seasons won’t cripple you from building a solid team around him.
Deshaun Watson
2020
Four years, $156 million with $73.7 million fully guaranteed
Watson set the bar with his mega-deal in September 2020 and I’m sure he’s glad he didn’t drag his feet. The no-trade clause and significant guaranteed money have made him a point of focus this offseason in both the general manager and head coach conversations in addition to allowing him to keep his job despite off-the-field allegations. Instead of a huge signing bonus like Prescott, the Houson Texans fully guaranteed two years in base salary (plus the final year of his rookie deal), which is why his cap number jumps from $16 million in 2021 to a whopping $40 million in 2022. Instead of absorbing that $24-million cap cost increase, it’s more likely the Texans restructure his deal a year from now if he’s still a member of the organization.
Contract projection (2021)
I’m actually going to take a few bits from the Watson deal and a few bits from the Prescott deal for this to make sense. (I already told you I think the Mahomes deal is so bad for Allen, I would advise against him taking it.)
Because Watson signed his deal before the final year of his rookie deal, it mirrors more closely what we see in Allen than Prescott because it gives an extra year to spread out a cap hit. For Prescott, they used a void year to achieve that functionality.
The deal needs to be for more than $40 million a season and include at least $95 million guaranteed to beat Prescott’s numbers. In order to do that, they are going to need to fully guarantee three years of the deal like the Texans did with Watson. It’s only two “new years” of guarantees and if you consider that 2022 is already guaranteed, it’s only one more fully guaranteed year, albeit with a lot more money. Buffalo won’t be able to give out a $60 million signing bonus in 2021, but could give that much combined in signing bonus and a guaranteed 2022 option bonus.
Four years, $164 million with $96 million fully guaranteed
None of those numbers should surprise you, but it’s the way the contract is structured that matters as we’ve seen with the Mahomes deal. A $15 million signing bonus in 2020 plus a $40 million option bonus in 2022 gets him close to Prescott’s $60 million signing bonus, but Prescott only has two years of guarantees on his deal while Allen has three, so there’s a trade off to get to more guaranteed money. Allen has more fully guaranteed money, which should make him happy even if it’s not more bonus money. If they wanted to take money from his 2022 salary to add to his bonus, they could, but it would make the cap hit leap between 2022 and 2023 even greater.
Allen has a guaranteed roster bonus from his rookie deal due at the start of training camp. I chose not to lump it into the new signing bonus for two reasons; the deal probably doesn’t get done until closer to the start of the season and Beane has traditionally done a combination of roster and signing bonuses anyway as a future cap management strategy.
The new deal only adds $3 million in cap cost to the 2021 season. There is a big cap cost increase between 2022 and 2023, but I’m hopeful the salary cap will have rebounded post-COVID and with a new TV deal in place. Plus, Buffalo can do a restructure in 2023 to get them through to an extension in 2024 if they need the space. With 2023 having so much guaranteed money, that restructure is more likely than not.
Here are rough ideas on numbers:
2021
Old signing bonus: $3,371,461
Old roster bonus: $2,618,596 (Paid at start of training camp)
New signing bonus: $3 million
Base salary $920,000
Cap hit: $9,910,057
2022
2021 signing bonus: $3 million
Option bonus: $10 million
Base salary $8 million (fully guaranteed)
Cap hit: $21 million
2023
2021 signing bonus: $3 million
2022 option bonus: $10 million
Roster bonus: $10 million (fully guaranteed)
Base salary: $23 million (fully guaranteed)
Cap hit: $46 million
2024
2021 signing bonus: $3 million
2022 option bonus: $10 million
Roster bonus: $10 million
Base salary $21 million
Cap hit: $44 million
Dead cap: $26 million
Cap savings if cut: $18 million
2025
2021 signing bonus: $3 million
2022 option bonus: $10 million
Roster bonus: $2 million
Base salary $35 million
Cap hit: $50 million
Dead cap: $13 million
Cap savings if cut: $37 million
Of course there are also incentives built in along with a no-trade clause. Watson and Prescott both have yearly $1 million bonuses for a Super Bowl win plus playing 50 percent of the Super Bowl snaps. Mahomes can annually make $1.25 million for winning the AFC Championship Game and $1.25 million for being named the league’s MVP.