Terry McLaurin’s new contract and what it means for Washington
July 5, 2022
by Steve Thomas
Washington fans finally received some good news last week when the team announced that star wide receiver Terry McLaurin had been re-signed to a 3-year contract estimated to be worth approximately $70M, with a total of $53M guaranteed, including a $28M signing bonus. My prediction a week ago was 3 years, $69M, with $42M guaranteed (click here to read), so I hit the length and overall value almost dead on, but was a little low on the guarantee. The details aren’t available yet, but I’ll take a swing at what the contract structure appears to be. The fact that my prediction was close to being correct shows that Washington paid McLaurin a contract that reflects his realistic value in comparison to his peers, which is precisely what a fair and reasonable contract should be. More importantly, though, is the fact that McLaurin wanted to be in DC – this means that he’s shut out the noise and craziness of the front office and instead has his focus on the field. He’s the second player in a year who’s made that choice. Sometimes miracles do happen.
A total value of $70M with a $28M signing bonus means that the contract pays a total of about $42M in some combination of base salary and bonuses. That comes out to an average of $14M per year. Specific details of his contract aren’t available yet, but we can take an educated guess at them. I think it’s unlikely that his base salaries are evenly distributed – usually, the base salaries go up each season. The $53M total guarantee number indicates that an additional $25M above and beyond the signing bonus is guaranteed either at signing or becomes guaranteed at some point during the life of the contract. It’s probable that the $25M will come via guarantees of the base salary and bonuses in years 1 and 2. Therefore, let’s say that McLaurin will get $11M in 2023 and $14M in 2024, which leaves $17M in 2025. His $28M signing bonus will be spread over the life of the contract, so all of those inputs put his annual cap hits in the range of around $20M in 2023, $23M in 2024, and $26M in 2025. In this scenario, his dead cap hits will be enormous for at least two years, which would effectively prohibit the team from cutting him at least through 2025.
One thing the team could do to improve McLaurin’s cap numbers is to tack on what are known as “voidable years” on the end of the contract, which would serve to spread the cap hit out two more years. Teams can do this up to 5 years, so Washington could go up through 2027. The obvious downside to this tactic is that it will add to the salary cap during years in which McLaurin could possibly not even be on the roster. The team did this very thing in Curtis Samuel’s contract. If Washington chose this tactic for McLaurin, it would save about $3.7M annually from 2023 to 2025.
It’s also possible that the contract minimizes the 2023 cap hit by giving him a 2023 base/roster bonus smaller than $11M, with a corresponding raise in 2024, but in my view that is unnecessary given the team’s 2023 cap space – they only have $193M on the books for 2023 right now, and that includes all 90 players currently on the roster. They can afford to eat a bigger number in 2023 in order to minimize the increases later on.
We’ll find out the specific details soon, but that’s my educated guess based on the information currently provided. The most important thing is that it got done at all. McLaurin could have – and maybe should have – refused to re-sign and forced the team to either place the franchise tag on him next year, trade him, or let him walk. None of those were good options for Washington, so the best possible outcome was had by all – Washington gets its team leader and McLaurin simultaneously gets generational money and the ability to be a free agent again in 2026 when he’ll be 31. That isn’t “young” in NFL terms, but it’s young enough that he can still get another high-paying contract, either in DC or somewhere else.
For the team, drafting, then re-signing, McLaurin means that the team will finally have the its first elite receiver during the prime of his career since Art Monk. As we all know, Washington has had a string of busts in wide receiver draft picks going all the way back to Monk’s era. It appears that McLaurin now has a good shot of someday being enshrined in the Redskins Washington Football Team Washington Commanders Washington Ring of Fame someday.
Congratulations to both parties for a job well done.