Lamar Jackson’s NFL Future Involves $100 Million Plus Gamble

Lamar Jackson and the Baltimore Ravens have been unable to come to an agreement for a contract extension and Jackson is about to enter the final year of his agreement after the Ravens tagged him as a franchise player. That franchise tag includes the Ravens’ right to match any offer for Jackson by another team or receive two first round picks should the Ravens decline to match and the offering team went on to sign the player. Jackson has hundreds of millions of dollars at stake in playing his hand and has elected to represent himself in the negotiations.

There have been a number of quarterbacks deals of late that have attracted lots of public attention, including Deshaun Watson’s 5-year $245M guaranteed agreement. Before last season Kyler Murray was able to sign a 5-year agreement for $230M with $160M guarantee. Josh Allen received a $258M contract with $150M guaranteed and Russell Wilson’s 5-year $245M was included a $165M guarantee.

Regarding guaranteed contracts, I have previously written that the NFL is the only major sports league that does not require guaranteed contracts and that players do not fully vest for benefits until after 4 years. This is not a coincidence in that NFL careers average less than 4 years and NFL quarterback careers just 3 years. This is a dangerous sport where a career ending injury can occur at any time.

When I began my career representing NFL players my first client was NFL Hall of Famer, Ronnie Lott. At the time, the only portion of the contract ever guaranteed was the signing bonus, not the yearly salaries. I maintain that this conversation should be moot as all NFL contracts should be fully guaranteed. Slowly over time certain portions of star player’s yearly salaries became guaranteed but it has progressed at a snails pace until recently and Watson was the first to received a fully guaranteed massive contract.

It is important to put guaranteed contracts in perspective. They simply afford team owners less flexibility to dump players that are not performing or have been injured and get them off the books so they can bring in other players under the salary cap. Teams would still receive overall revenue share provided by the CBA which amounts to 53% of NFL revenue. The players would still receive the remaining 47% of the revenue in the way of salaries. But teams don’t want to carry on the books and pay players that aren’t performing and give up roster and salary cap flexibility.

However, when it comes to quarterbacks the situation becomes more complicated. It is pretty clear that the quarterback is the most important position in building a winning franchise and when a star quarterback emerges the natural reaction is to keep that player happy. Thus, the battle over long term guaranteed contracts emerges. Quarterback guarantees have marched upward increasing from $165M last summer to DeShaun Watson’s $245M fully guaranteed agreement, the first of its kind. Many owners viewed the Watson agreement as a major mistake and are adamant that this mistake is not repeated. On the other hand, athletes and agents are using this as precedent that all contracts should be fully guaranteed, just like other major sports.

In the case of Lamar Jackson, representing himself in this complicated hornet’s nest is particularly challenging. Some athletes have been told that they no longer need an agent because the collective bargaining agreement outlines so many of the parameters for negotiation including salary minimums, franchise tag, and a salary cap. Jackson has apparently has been convinced or has simply convinced himself that he doesn’t need anyone to represent him, apparently relying upon informal advice from the NFL Player’s Association (NFLPA).

I shudder at the thought of Jackson representing himself without first class professional advice and representation leading the process from beginning to end. Just getting some advice from the sideline simply isn’t good enough to get to the best result. Players are simply untrained in the painstaking process of negotiating, evaluating market conditions, understanding the intricacies of collective bargaining agreements, assessing risks, communicating effectively, and making strategic and informed business decisions.

If you watch Jackson interviewed you’ll see this on full display. Professional athletes are highly emotional and those emotions are triggered if they don’t receive what they feel they rightly deserve and once that happens it becomes difficult to repair the rift. It goes beyond money and becomes tied to feeling valued and respected by your team and often difficult to repair the relationship. A big part of an agents job is to drive home the client’s value proposition throughout the negotiation process and while the two sides are apart communicate the teams position in the most diplomatic way leaving the door open for further discussion. Eventually, the agent must make a judgment call regarding what is the best result achievable and then make a recommendation to the client whether to accept it or not. I would always present the final offer and then logically present a risk versus reward analysis. When an athlete like Jackson is representing himself, when he is told “no”, it can lead to an irrational response, breakdown in communication and decision based purely on emotion rather than logic.

Moreover, there is a sentiment among owners that guaranteed contracts should not continue to escalate, despite Deshaun Watson agreement setting a new standard for top quarterbacks. There have been reports that no team will make him an offer and he has been getting advice from the NFLPA that he should hold out for a fully guaranteed contract. He needs an agent, who knows every owner and GM, working from now till the beginning of next season, to give him a true picture of his market value, meaning what a buyer/team is willing to pay for his services. If no team makes an offer, Jackson will be faced with the decision whether to accept less than $250M in guaranteed money.

Moreover, the Jackson scenario is further complicated by the risk that he will be injured this year? Keep in mind that Jackson is a running quarterback and this increases risk of injury. He has been in the NFL for 3 years and has suffered various injuries. The level of such future risk can be weighed through analytics. Rest assured the team is looking at this in determining how much of his agreement to guarantee.

The Raven’s seem to feel the range is $160-180M. Should Jackson roll the dice and and at 26 years old play for $32.4M with the possibility of risking nearly $150M in guaranteed money if he is seriously injured? It is unlikely he could get injury protection insurance for that much. If there is really no other offers for him, I’m not sure what he should do. All I know is that if an “agent” were to advise him to take less than a $250M guaranteed deal it would probably be the last client he ever had, particularly if Jackson played next year and had a break out season and was bitter because he was underpaid.

All this drama around players rolling of the dice could be avoided if the NFL simply guaranteed all contracts and perhaps put a limit on the length of such contracts as do the other major sports leagues. This would simplify the negotiation process and facilitate a more emotionally intelligent relationship and better culture between NFL owners and its players.