The Modern NFL Quarterback Market, 3 Views

The Modern NFL Quarterback Market, 3 Views pic2

Written by Ryan Hickman.

As we approach the NFL draft, the quarterback market remains volatile.  Many consider Tom Brady to be the greatest football player of all time. Why? As the starting quarterback for the New England Patriots, Brady led their franchise to 6 super-bowl championships before leaving in the 2020 offseason to Tampa Bay to win another football title with the Buccaneers. His entire career was winning, regardless of the roster surrounding him.

One of the most fascinating positions in all professional sports is the NFL quarterback. With a great quarterback, a mediocre roster can become Super Bowl champions. Without a great quarterback, a great roster can be severely hindered. As game-planning has become heavily reliant upon good QB play, teams have had to reach deep into their wallets to pay their stars. That begs the question–what factors go into NFL quarterback contracts?

The Modern NFL Quarterback Market, 3 Views pic4

The NFL: America’s Biggest Spectacle

One of the most popular and profitable sports leagues in the United States is the National Football League (NFL). They boast a massive fan base, with millions of people tuning in to watch games each week. NFL games are broadcast on several major networks, and they have even launched a dedicated streaming service that allows fans to watch games online. The Super Bowl, which is the championship game of the NFL, is one of the biggest sporting events in the world as it attracts millions of viewers each year.

The popularity of the NFL has made it an incredibly profitable enterprise. Franchises generate billions of dollars in revenue each year, primarily through television deals, ticket sales, and merchandise sales. Football teams are among the most valuable sports franchises in the world, with several teams valued at over $5 billion. These teams include powerhouse names such as the Dallas Cowboys, Los Angeles Rams, and the New England Patriots. The league’s profitability has made it an attractive investment for owners and investors, and they are constantly looking for ways to expand its reach and increase its revenue.

Overall, the NFL’s popularity and profitability have cemented its place as one of the most important cultural institutions in the United States. As we’ve witnessed this league’s continued success, valuable players have also recognized their role in this success. In recent years, as big-name quarterbacks reach the end of their previous contracts, their pay day has grown dramatically.

The Modern NFL Quarterback Market, 3 Views pic3

#1 Patrick Mahomes: The Flexible Kansas City King

Patrick Mahomes is one of the most talented quarterbacks in the NFL, and his contract reflects his value to the Kansas City Chiefs. After an impressive college career at Texas Tech, Mahomes was drafted in the 2017 draft by the Chiefs. With two Super Bowls in only six years in the league, he has become a playoff staple. Back in 2020, Mahomes signed a 10-year contract extension worth up to $503 million. This is the largest contract in the history of North American sports, and it is designed to keep Mahomes in Kansas City for the long-term.

The contract is structured in a unique way that provides both Mahomes and the Chiefs with flexibility. The contract includes a $63 million signing bonus, which is the largest bonus in NFL history. This bonus is paid out immediately, providing Mahomes with a large amount of guaranteed money upfront. The contract also includes several performance-based incentives, such as a $1.25 million bonus for winning the Super Bowl MVP award. These incentives give Mahomes the opportunity to earn even more money if he continues to perform well on the field.

Additionally, the contract includes provisions that allow the Chiefs to restructure the contract in the future if needed, which can provide the team with salary cap relief if necessary. Overall, Mahomes’ contract is a testament to his value to the Chiefs and his importance to the NFL as a whole.

Chiefs lock up Patrick Mahomes through 2031 with massive extension

The Modern NFL Quarterback Market, 3 Views pic5

#2 Divorce from the Raiders: Free Agent Derek Carr

Derek Carr has been the face of the Las Vegas Raiders franchise for the past nine seasons. However, toward the end of 2022, the Raiders announced that they would be releasing Carr from his contract, signaling the end of his tenure with the team. Carr had been the starting quarterback for the Raiders since 2014 and had led the team to several playoff appearances during his tenure. However, the absence of a playoff win gave the front office cold feet in continuing Carr’s contract.

The decision to release Carr was likely driven by a combination of factors. First, the Raiders had been struggling in recent years, and there was a desire to make significant changes to the roster. Additionally, Carr’s contract was for the next 2 years, meaning even though the coaching staff may have wanted to move on and explore other options at quarterback, they would have to release him and pay $15 million of his terminated contract. Despite these deterrents and Carr’s “no-trade” clause in his contract, the Raiders had no choice but to release him to avoid having to pay him $40 million guaranteed over the next two years of his contract.

However, despite his release, Carr is still regarded as a talented quarterback who could find success with another team in the market. Many franchises were possible landing spots in hiring Carr as a free agent, as he was viewed as a safe bet to any team in need of a starting quarterback. On March 6th of this year, Carr signed a 4-year deal with the New Orleans Saints, with $100 million guaranteed and incentives up to $150 million. They have decided to resort to a veteran starter instead of relying on a first-time starter from the draft.

Ex-Raiders QB Derek Carr agrees to deal with Saints

The Modern NFL Quarterback Market, 3 Views pic8

#3 Lamar Jackson and the Franchise Tag: The Guaranteed Question

Lamar Jackson is a dynamic quarterback for the Baltimore Ravens who has become one of the league’s most exciting players. After playing a successful college career and being drafted in by Baltimore in 2018, Jackson’s play has elevated the Ravens and earned him MVP honors. However, his contract is set to expire after the 2022 season, and the team is likely to prioritize re-signing him to a long-term deal. However, negotiations between Jackson and the Ravens have been complicated by the previous contract situation with Cleveland Brown quarterback, Deshaun Watson.

Watson, who was drafted in 2017 by the Houston Texans, recently signed a massive contract extension with the Cleveland Browns back in 2022 worth $230 million guaranteed. Unfortunately, Watson has since dealt with several serious legal issues, which have complicated his future in the NFL. The boldness of Cleveland surrounding Watson’s situation has made it difficult for other players, including Jackson, who plays in the same division as the Browns.

Lamar Jackson now would like a contract similar to Watson’s, as Jackson’s career has been comparably more successful than Watson’s. However, the Ravens are reluctant to pay Jackson so much guaranteed money due to Jackson’s previous injuries. These two sides have caused a stalemate in negotiations, ultimately leading the Ravens to place a franchise tag on Jackson. This allows Jackson to explore other teams interested in his talent and for the Ravens to match any offer he receives from these parties. If they decide not to match his contract, the other team will give up two first-round draft picks in exchange for Lamar.

Despite the complications, the Ravens and Jackson are likely to come to an agreement on a new contract. Jackson has been a standout regular-season player for the Ravens, leading the team to the postseason in each of the last three seasons. He is the most dynamic starter in the NFL, and the Ravens are likely to prioritize giving him a long-term deal. Still, the final details of the contract may be affected by Watson’s situation, as teams may be more hesitant to offer large contracts to quarterbacks in the current climate.

Overall, Jackson’s contract negotiations highlight the complex economics of the NFL, particularly in regard to the quarterback position. Quarterbacks are often the highest-paid players in the league, and their contracts can have a significant impact on the salary cap and team building. The ongoing situation with Watson has added an extra layer of uncertainty to the market, making it difficult for a scenario like Jackson to negotiate new deals. I In lieu of the challenges, the Ravens and Jackson are still likely to reach an agreement, and Jackson will continue to be one of the league’s most exciting players for years to come.

The Modern NFL Quarterback Market, 3 Views pic9

Money Makers: The Highest Paid Position

The NFL quarterback position is one of the most crucial positions in professional sports, and the contracts given to quarterbacks reflect their value to their franchise and the league as a whole. The popularity and profitability of the NFL have allowed teams to reach deep into their wallets to secure top quarterback talent.

Mahomes’ contract extension with the Kansas City Chiefs is a testament to his value to the team, and his unique contract structure provides both him and the team with flexibility. On the other hand, Derek Carr’s release from the Raiders is an example of how franchises decide to make significant financial changes to their rosters, even if it means parting ways with a talented quarterback. The abnormally enormous contract of Deshaun Watson has added an extra layer of complexity to the market, making it difficult for stars like Lamar Jackson to negotiate new contracts. Regardless, the quarterback market will continue to be one of the most fascinating aspects of the NFL for years to come.

For more NFL insights from Alan Olsen’s American Dreams show, click here.

Written by Ryan Hickman

We hope you found this article helpful.

To receive our free newsletter, contact us here.

Subscribe to our YouTube Channel for more updates.

If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or our website at www.GROCO.com. Unfortunately, we no longer give advice to other tax professionals gratis.

Considerately yours,

GROCO, GROCO Tax, GROCO Technology, GROCO Advisory Services, GROCO Consulting Services, GROCO Relationship Services, GROCO Consulting/Advisory Services, GROCO Family Office Wealth, and GROCO Family Office Services.

Posted in
Unveiling Entrepreneurial Success with Randi Brill

Unveiling Entrepreneurial Success with Randi Brill

Randi Brill, best-selling author and CCO of Just Call Randi Design Agency discusses unveiling entrepreneurial success on Alan Olsen‘s American Dreams Show. Transcript: Alan Olsen Hi, this is Alan Olsen and welcome to American Dreams. My guest today is Randy brill. Ready welcome to today’s show.   Randi Brill Thank you, Alan. I’m glad to be here.  …

Legacy Builders Philanthropic Revolution

Legacy Builders Philanthropic Revolution

Legacy Builders Conference Inspires Philanthropic Revolution The recent “Legacy Builders” event has sparked a philanthropic revolution, inspiring attendees to leverage their accumulated wealth for world betterment. The event, held on May 15, 2024, in San Jose, CA, featured distinguished speakers including NFL legend and HGGC Partner Steve Young¹, retired three-star General Michael Barbero², and Becky…

Transform Your Life Every Morning, Hal Elrod

Transform Your Life Every Morning, Hal Elrod

Hal Elrod, an international keynote speaker and best selling author of 12 books, including “The Miracle Morning“—which has been translated into 42 languages discusses how to transform your life a little every morning on Alan Olsen‘s American Dreams Show.   Transcript:   Alan Olsen Welcome to American Dreams. My guest today is Hal Elrod. Hal welcome to today’s show.  …

Rob Ryan’s Amazing Movie Premiere June 28th on How He Saved the Internet

The Hollywood movie premiere of the Rob Ryan story is a cinematic tribute to innovation.  This remarkable film documents the real-life journey of this visionary from crisis to triumph and how he saved the internet!  On June 28th at 9:30 PM in the iconic TCL Chinese Theatre.  For tickets, click here.   Rob Ryan, Founder…