With Terry McLaurin’s contract negotiations turning into a hold out from mandatory minicamp occupying much of the Commanders’ coverage early this week, I thought it would be interesting to take a deeper dive into the red-hot wide receiver contract market, and explore some of the nuances of recently signed deals.
It’s no secret that a significant piece of NFL contract negotiations is the prestige that both the player and his agent can garner by being able to tout a “top of market” deal. Sure, the dollars matter, but the perception matters a great deal also, and, in the case of NFL contracts, perception frequently does not reflect reality.
Unlike several other professional sports leagues, it’s rare for multi-year contracts in the NFL to be fully guaranteed at signing. When it does happen, like in the case of Deshaun Watson, it’s a huge deal. That said, many deals - particularly for above average players - do contain some guaranteed money, but they also contain early “escape clauses” for teams, who can then part ways with the player before the end of the contract without significant financial consequences.
Generally speaking, the players (and their agents) will tout the full value of the contract - including non-guaranteed money - when what really matters most is what’s guaranteed. But when presented in those latter terms, as you’ll see below, the perception can change fairly dramatically.
This piece will do a deeper dive into several of the more high-profile WR contracts signed this offseason to try to determine where Terry McLaurin might best be slotted in.
Kirk is an above average WR who received a contract from the Jaguars on March 14th that completely shocked the NFL and rocked the WR market to its foundation. Nominally, Kirk’s deal is a 4-year, $72M contract, averaging $18M per year. It guaranteed him $37M at signing. Kirk’s NFL stats to date are below:
The deal, in terms of average annual value (AAV) has Kirk as the 14th highest paid WR in the league.
The structure of Kirk’s deal is - to me - actually quite strange. It frontloads his salary and signing bonuses in such a way that he becomes more expensive than the face value of the contract if he’s cut before it ends.
So, let’s say, for instance, that Kirk is cut after year 3 of the deal. At that point, he will have collected $50.5M in salary and bonus. At $18.5M/yr, Kirk would actually earn more per year if he didn’t play the 4th year of this contract.
In any case, calling this a legitimate ~$18M/yr deal is accurate, and - I think - sets the floor of the negotiations with Terry.
Last year, Godwin signed a 1-year $16M deal. This March, he signed a 3-year, $60M deal, with a nominal AAV of $20M/year. It has $40M guaranteed.
Godwin’s contract is very straightforward, paying him $40M after two seasons, and $60M after 3. It does have two void years to spread the prorated bonus.
Comparing Godwin’s project to Kirk’s, he’s a relative bargain at $20M per year.
There are several WRs from Terry’s draft class that are currently in the midst of heated salary negotiations, including Deebo Samuel and DK Metcalf. Brown received an offer from the Titans before the draft, and the two parties couldn’t come to an agreement. As a result, the Titans traded Brown to the Eagles during the draft and used the pick to select Treylon Burks as Brown’s replacement.
The Eagles signed Brown to a nominal 4-year, $100M deal, with an AAV of $25M/yr. Brown’s deal is far more complicated than Kirk’s, is backloaded, unlike Kirk’s, and contains two void years, in 2027 and 2028.
Year 1 of Brown’s deal is essentially the last year of his rookie contract, and is, correspondingly, a small cap hit ($5.7M), even taking up some of the pro-rated bonus. But his contract, unlike Kirk’s, very much has an escape clause, particularly after year 3 of the extension (year 4 of the contract).
If we look at years 1-3 of the extension, here are the cap hits in Brown’s contract:
Year 1: $8.3M
Year 2: $12.4M
Year 3: $26.5M
Assuming Brown is cut after year 3, $20.2M in dead money (his pro-rated bonus) comes due. Brown was in line to make around $4.5M in the final year of his rookie deal which is about $1M less than year 1 of this contract, so we’ll pile that difference into the calculation as well.
$47.2M paid during the 3 extension years + $20.2M dead money + $1M year one overage = $68.4M total
$68.4M divided by 3 years = $22.8M AAV
So, Brown’s deal, in practice, is a low cost first year (rookie deal), plus a 3-year, $22.8M extension. Year 4 of that extension, a $30.3M salary, can be avoided by the Eagles completely, if they so choose.
For practical purposes, we’ll call this a $23M AAV extension beyond the rookie deal, for a player who very closely comps Terry’s production.
Diggs is a veteran WR who has been one of the most productive pass catchers in the league over the past several seasons. This April, he signed a 4-year extension with the Bills, nominally worth $96M, with $70M guaranteed, a $24M/yr deal.
The extension actually lessened Diggs’ cap hit in 2022 by $6M, by re-structuring his contract. In digging into it, that seems to be the primary value of Diggs extension, in addition to rightsizing his contract with the market.
The structure of the extension actually creates a situation where it makes sense for the team to potentially get out of the deal after 2025, when Diggs would be approaching 33. In doing so, the Bills would have paid Diggs $95.1M (including $10.7M in dead cap) over 4 years, an annual average of $23.8M.
We’ll call the actual value of this one close enough to the nominal value, $24M/yr, to not make much difference.
Kupp had a season for the ages last year, racking up over 1,900 yards and 16 TDs.
Earlier this month, he signed a 3-year deal with the Rams, nominally worth $80.1M with $75M guaranteed. At face value, this appears to be an astonishing $26.7M AAV.
This one, like Diggs’ deal, appears to be fairly true to face value. Over the first 3-years of the deal, the Rams will accumulate $71.9M in cap hit, plus a $10.3M dead cap if they let him go. At $82.2M over three years, that’s a legitimate $27.4M AAV. Kupp actually gets bit cheaper over the next two years, if they decided to keep him around.
Kupp’s contract is a solid $27M, and the legitimate top of the WR market.
Tyreek Hill and Davante Adams
Both Hill and Adams, traded to new teams this offseason, signed new deals with the Dolphins and Raiders respectively. Both deals are poster children for ways to manipulate apparent contract numbers.
In Hill’s case, he signed a 4-year, $120M extension, with $52.5M guaranteed, an apparent $30M AAV deal. The reality? If the Dolphins cut him after 3 years, they will have paid him $62.6M, plus $10.2M in dead cap for an actual AAV of $24.3M. If they cut him after 4 years, that number drops to $23.9M.
In Adams’ case, his new contract was pitched as a 5-year extension worth $140M, or $28M AAV. In reality, Adams’ deal is even less generous than Hill’s. It includes an escape clause after year three that allows the Raiders to get away with paying him $67.6M over those first 3 years (including dead cap), which would be an AAV of $22.5M.
There’s no question, this offseason has been a wild one for wide receivers, but as you can see above, it’s been a little less wild than in conventionally described in the press. If we want to rank the actual contract values of the WRs above, it would go something like this:
- Kupp - $27M/yr
- Diggs/Hill - $24M/yr
- Brown - $23M/yr*
- Adams - $22.5M/yr
- Kirk - $18M/yr
Through this lens, I would argue that a three year extension for Terry, in the $22-23M/yr, with $50-55M guaranteed is entirely fair.
The team could add a “fake” inflated salary year (2026) if they want to put up the illusion of a higher AAV, but in terms of dollars McLaurin is certain to see, this seems to be a reasonable market valuation. What do you think?
* Year 1 of Brown’s deal is, in effect, a very slightly higher cost year of his rookie contract, and not fully included in this calculation.
How much should the Commanders pay Terry McLaurin per year?
Whatever he wants.
They should let him walk after this season.