Breaking down Daniel Jones’ new contract and what the details mean for the Giants

The devil is always in the details with NFL contracts. The initial numbers reported in a signature break are often inflated. Eventually, the full terms of the contract are revealed and a full valuation can be provided.

Here’s how four-year, $160 million quarterback Daniel Jones signed with the Giants breaks down:

The most important element of any contract is the guaranteed money. Jones’ contract contains $82 million fully guaranteed: the $36 million signing bonus, his 2023 and 2024 salaries, and his 2023 and 2024 coaching bonuses.

Getting the full $82 million guaranteed in the first two years of the deal is a solid result for Jones. Had he earned the franchise tag this year ($32.4 million) and again next year ($38.9 million), he would have earned $71.3 million over the next two years. And he should have played well enough this season to warrant another tag, so he would have only been guaranteed $32.4 million. As a result, Jones received nearly $11 million more than getting tagged twice without needing to earn a second tag.

Giants general manager Joe Schoen has made no secret of his desire to avoid tagging Jones because it would have restricted the team’s cap space this year. The $21 million cap Jones hit this year is $11.4 million less than if he had been tagged. And he’ll have $66 million on the cap over the next two seasons versus $71.3 million if he was tagged twice.

An added benefit of Jones’ extension is that the Giants were able to use the franchise tag on running back Saquon Barkley. The running back tag is just $10.1 million, so Jones’ long-term deal saw the Giants keep the quarterback and Barkley at a combined cap of $31.1 million. dollars this year. That’s less than the only quarterback tag, so it’s safe to conclude the Giants couldn’t have afforded Barkley if the tag was needed for Jones.

The deal has an average annual salary of $40 million, which seemed like a big benchmark for Jones. The outcry over his initial asking price of over $45 million a year has always been misguided, as Jones wouldn’t have landed at $40 million if he hadn’t started so high.

It is important to recognize that the average annual value (AAV) is the most specious aspect of any contract. Jones’ AAV in the first two years is actually $41 million, which is the big win for him.

The balance shifts to the Giants in the third year of the contract. With Jones’ base salary dropping to $30 million in 2025, that becomes a three-year, $112.5 million contract, or an AAV of $37.5 million.

The third year is the inflection point of the contract. $12 million of Jones’ $30 million salary in year three becomes fully guaranteed ($23 million is guaranteed for signature injuries) if he’s on the roster on the fifth day of the year of the 2025 league.

Not having guaranteed money in the third year until 2025 is the Giants’ big win in this negotiation. It is common in recent big budget quarterback contracts for a portion of the Year 3 salary to be guaranteed before the start of Year 2.

Since it’s inconceivable for a team to drop a quarterback on a huge contract after one season, Year 3 guarantees with a Year 2 trigger are virtually guaranteed at signing. But that’s not the case in Jones’ deal.

The Giants have an escape route after the 2024 season. They can cut ties with Jones to create $21.5 million in cap savings while eating $18 million in dead money. It’s not ideal to eat $18 million in dead money, but with a projected salary cap of $282 million in 2025, the Giants could absorb that hit if they’re forced to get rid of Jones.

Other than a $46.5 million salary in 2026 that bumps the AAV up to $40 million, the fourth year of the deal is irrelevant. There’s no way Jones is playing on a cap of $56.5 million in 2026.

If Jones plays well enough in the next three seasons to reach that point, teams will surely negotiate another extension to reduce the cap reached in 2026. And if Jones hasn’t lived up to expectations, the Giants can dump him before the season. 2026 with only $9 million in dead money.

The four-year deal appears to be a compromise. A three-year contract would have left no room for the team to add padding to take the AAV to $40 million. Meanwhile, a five-year deal would have allowed the Giants to put in big unsecured salaries over the past two years to inflate the AAV.

The four-year structure allowed Jones to get the first two years strong, gave the Giants flexibility in year three, and provided a clear spot to revisit the arrangement before year four.

It will be interesting to see how the Giants handle Jones’ huge $45 million cap next year, or 17.6% of the projected $256 million salary cap. The Giants currently have no costly cap on the books in 2024, so they could leave Jones’ cap alone. But they will surely tap into their 2024 cap space in free agency this year and with an expected extension for All-Pro defensive tackle Dexter Lawrence, who is entering the final year of his contract. If the Giants restructure Jones’ cap in 2024 to create space next offseason, it will add dead money if they want to get out of the contract in the future.

Jones may also earn an additional $35 million in incentives and escalators throughout the deal. His personal incentives are tied to passing yards, passing touchdowns, total offensive yards and total touchdowns, according to a league source.

Jones can earn up to $1 million for finishing in the top 15 quarterbacks in those four categories, according to Pro Football Talk. He can earn an additional $1.5 million for finishing in the top 10 among quarterbacks in those four categories and an additional $1.5 million for finishing in the top five among quarterbacks in those four categories.

These are not inaccessible incentives. Jones finished in the top 15 in passing yards and total yards last season. It is therefore set up to realistically earn more than the base value of the contract.

There are also playoff incentives of up to $5 million each year. Those incentives weren’t specified, but they’re likely tied to Jones starting and winning playoff games.

Jones’ accomplishments last season would have earned him $2 million in incentives in that contract, so that amount is considered earnable and counts toward that salary cap this year.

What about other potential extensions?

Once the deal with Jones is done, Schoen focuses on the many other decisions and negotiations on his plate. Barkley’s situation is the most intriguing.

Barkley turned down a multi-year offer during the season worth $12.5 million per year, according to a league source. The parties continued negotiations, but were unable to reach an agreement by Tuesday’s deadline.

Getting tagged crushes Barkley’s influence. He’s currently stuck for a year with a salary that’s $2.4 million less than the multi-year offer he rejected. The Giants have no incentive to increase their offer, especially since tagging Barkley twice would cost $22.2 million over the next two years – still less than their multi-year offer. The Giants could even lower their offer if they really wanted to play hardball.

But the team probably doesn’t want to have a disgruntled leader, who could skip the offseason program if he stays on the tag. Agreeing to a long-term deal with Barkley would maintain the good vibes generated last season, lower his 2023 cap and keep Jones’ best weapon for several more seasons. But the Giants can hold their ground in negotiations because avoiding a long-term commitment to a running back with an injury history has legitimate appeal.

An extension with Lawrence also appears to be a priority, with Schoen revealing those negotiations are ongoing. An extension could lower Lawrence’s $12.4 million cap reached this year to give Schoen even more flexibility in free agency. Lawrence has earned a deal worth more than $20 million a year, so he’s bound to have some big hits down the road.

There doesn’t seem to be as much urgency to extend left tackle Andrew Thomas, who will be under contract through the 2024 season once the Giants officially exercise their fifth-year option this spring. Thomas will warrant a monster extension, so Schoen may choose to wait to stagger his successes with Jones, Lawrence and perhaps Barkley.

Schoen said they would “probably take the hit this year” with a standard out of wide receiver Kenny Golladay to avoid giving away more dead money in 2024 when Jones’ cap hit fly balls.

A standard version would create $6.7 million in immediate cap savings, while leaving $14.7 million in dead money. Golladay would be completely wiped off the books after 2023.

If Golladay is designated as a June 1 outing, the Giants would create $13.5 million in cap savings this year with a dead money charge of $7.9 million. A June 1 release would push $6.8 million in dead money over the 2024 cap.

(Top photo: Al Bello/Getty Images)