The top of the quarterback market got more clarity at the end of last week. Tua Tagovailoa became the NFL's third-highest-paid player at $53.1 million per year when he received a four-year, $212.4 million contract extension (worth up to $221.4 million with incentives) from the Miami Dolphins on Friday. The deal has $167.171 million in guarantees, of which $93.171 million was fully guaranteed at signing.
Several hours later, Jordan Love and the Green Bay Packers reached an agreement on a four-year, $220 million extension worth a maximum of $221.25 million through incentives and salary escalators. At $55 million per year, Love ties Cincinnati Bengals quarterback Joe Burrow and Jacksonville Jaguars quarterback Trevor Lawrence as the NFL's highest-paid player. There are $160.3 million of guarantees in Love's contract where $100.8 million was fully guaranteed at signing. Included in the $100.8 million is an NFL-record $75 million signing bonus.
Neither of these contracts is particularly relevant to Prescott's situation. Prescott, who is in a contract year, is in a unique situation because of the nature of the four-year, $160 million deal, averaging $40 million per year, he signed in March 2021.
The 2023 NFL MVP runner-up is sitting in the driver's seat despite a subpar performance in which he was thoroughly outplayed by Love when the Dallas Cowboys were upset by the Packers in the wild-card playoff round as the NFC's No. 2 seed. Prescott has a no-trade clause in his contract. He also has a provision preventing Dallas from designating him as a franchise or transition player in 2025 should he play out his contract. There also isn't a legitimate starting quarterback alternative currently on Dallas' roster.
Thanks to four different contract restructures strictly to create salary cap room since signing the $40 million deal in 2021, the Cowboys will have a $40.46 million 2025 salary cap charge if Prescott plays out his contract and tests the open market in 2025 free agency. The Cowboys would get a 2026 third-round compensatory pick at best from Prescott's departure in this manner.
The Cowboys finally got the ball rolling with Prescott's contract. Chief Operating Officer Stephen Jones revealed on Saturday that an offer was made to Prescott recently. Owner Jerry Jones said he didn't think this season would be Prescott's last in Dallas and expressed confidence that a deal can get done last week at his introductory training camp press conference.
An offer consistent with the most recent developments in the 2024 quarterback market would be paying lip service to Jones' belief given Prescott holds all the cards in the negotiation. If Jones is serious about retaining Prescott he needs to start thinking about what would make him forego a chance to test the open market in 2025 since he can't be restricted by a franchise tag.
Prescott reiterated his desire to remain in Dallas while talking to the media last week but also acknowledged that several great quarterbacks, such as Tom Brady, Brett Favre, Peyton Manning, Joe Montana and Aaron Rodgers, played for other teams. Another remark he made was more illuminating. "I've said it before: I have an obligation to the NFL, to other quarterbacks and to my teammates when it comes to what I get paid and what I accept. That's where sometimes I leave it to my agents," said Prescott.
This type of comment suggests that Prescott intends to exploit his leverage and give his agent, Todd France, latitude to do what he sees fit. Along those lines, two important data points to France could be the growth in top of the quarterback market last year and the quarterback market after adjusting for salary cap inflation.
Heading into the 2023 offseason, the NFL's highest-paid player was Rodgers. He became the NFL's first $50 million-per-year player with a contract widely considered to be $150.815 million over three years, averaging $50,271,667 per year, although there were two additional below-market years (2025 and 2026) in the deal.
At the end of the 2023 season, Burrow topped the NFL pay scale. He signed a five-year, $275 million extension, averaging $55 million per year, with the Bengals right before last regular season started. The deal is worth up to $281.25 million thanks to $1.25 million of annual incentives in the extension years (2025 through 2029). Burrow has $219.01 million in salary guarantees, of which $146.51 million was fully guaranteed at signing.
The top of the quarterback market increased in 2023 by 9.41% from 2022. It's been stagnant thus far in 2024 with Lawrence and Love tying Burrow's $55 million per year. The 9.41% market increase in 2023 applied to the existing $55 million-per-year benchmark is just under $60.175 million per year.
The salary cap went from $224.8 million in 2023 to currently $255.4 million. Adjusting Burrow's deal for the 13.61% growth in the salary cap would essentially be $62.5 million per year.
Stephen Jones indicated the he hasn't gotten a response from Prescott's camp. "Right now the ball is in [Dak's] court and we're waiting to hear from them," Jones said Monday in an interview with a San Antonio radio station. "They understand that the ball is in their court."
France would be justified in being adamant with the Cowboys that a four-year extension, averaging $61.25 million per year, would prevent Prescott from becoming an unrestricted free agent in 2025. The $61.25 million per year figure is slightly below the midpoint of Burrow's contract adjusted for salary cap inflation ($62.5 million per year) and the growth in the top of the quarterback market from 2022 to 2023 ($60.175 million per year).
France should insist that the no-trade clause and the provision preventing a franchise or transition tag would have to carry over from the 2021 contract as well as Prescott getting another record-setting signing bonus. Prescott's $66 million signing bonus was the most ever in an NFL contract until Lamar Jackson's $72.5 million signing bonus in the deal he signed with the Baltimore Ravens last year. If the Cowboys are interested in substantially lowering Prescott's $55,132,467 2024 cap number in an extension, Love's $75 million signing bonus may need to be eclipsed anyway given his current 2024 base salary is $29 million.
Strong contract guarantees and great cash flow should also be a necessity. Getting at least $150 million fully guaranteed at signing, which would be the NFL's second most behind the $230 million in Deshaun Watson's fully guaranteed contract with the Cleveland Browns, might be an important benchmark for France.
The overall guarantees could exceed $200 million but would likely fall short of Watson's $230 million. Even with one of the most player friendly cash flows for a four-year extension like Russell Wilson had in his 2019 deal with the Seattle Seahawks, Prescott's total cash through 2027 (the third new contract year) would be $228.5 million. This is $1.5 million less than Watson's total guarantees. Subtracting out Prescott's $29 million 2024 base salary leaves $199.5 million of new money through the third new year of 2027 out of the $245 million of new money over the four new years in a $61.25 million-per-year extension.
The $199.5 million represents 81.43% of the new money in the deal after the third new year, which is in line with Wilson's percentage. By contrast, Love and Tagovailoa are 79.55% and 76.74%, respectively, after the third new year. By approximating Love's 79.55%, Prescott would have $195 million of new money and $224 million of overall cash through 2027.
It should also be stressed to the Cowboys that anything from the current negotiation will be obsolete in the future if Prescott plays the 2024 season under his existing contract. The growth in the salary cap from 2024 would have to be added into the equation. Once the 2024 season is over, Prescott would have to have a strong preference of staying in Dallas to pass up definitively finding out his true market value during the two-day negotiating period prior to the start of free agency beginning next March 10.
Personally, I would like for Prescott to play out his contract and become an unrestricted free agent in 2025. I'm curious to see what Prescott could command on the open market as long as he didn't have a stunning collapse in 2024 along the lines of Wilson's first season with the Denver Broncos after being acquired from the Seahawks in a 2022 offseason trade.
A healthy Pro Bowl-caliber quarterback in his prime is never available on the open market. A fully guaranteed contract could be conceivable for Prescott, who just turned 31, with strong interest from at least two teams.
