Josh Allen’s contract details, impact on salary cap and bonus
After a superb third year in the NFL, what is the status of Josh Allen’s contract in 2021? Let’s take a look at the details of Allen’s contract, the impact of the deal on the Buffalo Bills salary cap, and what we can expect in the future.
Josh Allen contract details and bonus
After being selected seventh in the general classification 2018 NFL Draft, Allen signed a four-year contract worth $ 21.4 million. The contract contained a signing bonus of $ 13.5 million, and all $ 21.4 million is fully guaranteed. In addition, Allen’s contract contains alignment bonuses in 2019, 2020 and 2021. These bonuses have been and will be paid at the start of training camp in each of those years.
On May 3, the Bills exercised Allen’s fifth-year option, worth about $ 23 million. Allen’s fifth year option is fully paid as a salary and is fully guaranteed.
Allen has two more years on his contract
Allen’s original four-year contract was scheduled to expire after the 2021 season. However, by exercising the fifth-year option, Allen’s contract expires after the 2022 season.
What impact does Allen’s deal have on the Bills salary cap?
Allen is expected to count $ 6.9 million against the Salary ceiling for invoices in 2021. Half of that is prorated from his $ 13.5 million signing bonus, to just under $ 3.4 million per year. The remaining salary cap is made up of Allen’s base salary of $ 920,000 and a bonus of $ 2.6 million. So, in 2022, Allen will raise a cap of $ 23 million.
What options do the Bills have with Allen’s contract?
The decision to exercise Allen’s fifth-year option was the first major decision the Bills had to make regarding their franchise quarterback. The focus now is on how the Bills approach Allen’s future. Will they extend Allen ahead of the 2021 season, or will they look to give him another year to make sure the 2020 season is not on time?
Will the Bills give Allen a contract this offseason?
After Dak Prescott signed a four-year, $ 160 million contract, the market for paying a starting QB has shifted somewhat. As a result, Prescott became the second highest paid quarterback in the NFL in terms of average annual value at $ 40 million. Thus, the contract signed by Prescott sets the level at which we can expect for contract extensions in the future.
If the Bills want to extend Allen this offseason, they will likely have to match the deal given to Prescott.
The problem for the Bills is that if they wait, the market could change again. Baker Mayfield and Lamar Jackson are also both eligible to receive new contracts that could push the market above $ 40 million. Therefore, in the meantime, the Bills could end up having to give Allen just over $ 40 million a year to respond to the market.
ESPN’s Jeremy Fowler recently reported that Allen might be willing to structure things to help the team. However, the wording of Fowler’s statement is crucial. To be clear, he didn’t say Allen would be willing to take less money.
Structuring a contract to help the team is a lot different than accepting less money to stay in Buffalo. While Allen might be willing to take a little less to help the team, it’s likely that Buffalo is still considering giving Allen around $ 35-40 million a year to keep him at Orchard Park.
Would the Bills be willing to use the franchise label route with Allen’s contract?
To some extent, Bills are in no rush to extend Allen. In three years, we’ve only seen Allen truly excel once. The Bills may decide they want to at least see his fourth – and maybe even his fifth – year in the league before making a long-term commitment. This could bring the franchise label at stake for Allen in 2023 and potentially 2024.
By 2021, the value of the franchise tag was expected to be $ 24.1 million, but that number is expected to increase in the coming years. According to Over The Cap, the franchise label number for 2022 expects around $ 29 million. Therefore, we can expect it to exceed $ 30 million, and potentially up to $ 35 million in 2023.
If the Bills give Allen the franchise label for two years, that value will increase by at least 120%. Assuming a value of $ 32.5 million in 2023, the label would cost around $ 39 million. That would mean the Bills plan to pay Allen an average of around $ 33 million from 2022 to 2024.
While it costs less than paying him $ 40 million a year now, we might be looking at a much different QB market after that time. It is not unreasonable to believe that the best AAV for QB in 2024 could reach $ 50 million. So extending Allen’s contract beyond the 2021 season is probably the smartest move for Buffalo.
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