The Josh Allen Contract: Unpacking the 'New-Money' Misconception in NFL Deals

The recent signing of Josh Allen’s new contract has sparked discussions that highlight a persistent misconception in NFL contract negotiation: the flawed concept of "new money." While only a niche audience may appreciate these nuances, it’s vital for fans and analysts alike to understand the implications of how these deals are reported.

For years, many have perpetuated the notion of contract "extensions," which, in reality, do not exist in the NFL. When a player with time remaining on their current deal signs a new agreement, that previous contract is nullified — it's a clean slate, not an extension.

Consider this simplified breakdown: Player A has two years left on their contract at $5 million per year, totalling $10 million. If they secure a new four-year deal at $10 million annually, the total would seem to be $40 million, giving the impression of a lucrative "new-money" addition. However, subtracting the $10 million from the new contract effectively yields only a $30 million increase, split over two additional years. Thus, the "new-money" average appears inflated at $15 million per year, misrepresenting the actual worth of the deal.

This misrepresentation isn't a mere slip; it extends to how contracts like Dak Prescott’s and, more recently, Allen’s are publicized. Prescott's four-year deal in September 2024 comes with a sensational headline of $60 million per year based on "new money." Yet it is really a five-year, $269 million contract, revealing a more accurate average of $53.8 million per year when considering his existing earnings.

Now, let’s put Allen’s contract into the mix. His six-year deal, reportedly worth $330 million, implies an average of $55 million per year. However, when scrutinized without the “new-money” lens, the math reveals startling insights: it equates to a staggering average of $87.723 million per year, with an added $175.446 million classified as "new money." This disparity ignites questions about the integrity of how contracts are compared and received.

Moreover, similar instances in the league, like Deshaun Watson’s 2022 five-year $230 million deal after his trade, further complicate the narrative — he was due $136 million on the original contract with one year remaining. Accordingly, the restructuring led to $94 million in "new money," driving home the point that certain contracts challenge the validity of "new-money" calculations altogether.

The crux of the issue lies in the fact that these contracts are often presented in a misleading light. If we accept the inflated values applied to Prescott and others without accounting for the full context, we allow an inaccurate narrative to flourish.

The NFL community — including players, agents, reporters, and fans — would do well to reconsider how contracts are analyzed and discussed. The term "new money" often muddies the waters when, in reality, the deal's worth should be the only focus. If we continue to adhere to this convoluted method, we risk losing sight of truthful financial assessments in player contracts.

As the NFL evolves, let us embrace transparency and clarity. Recognizing contracts for what they truly represent will allow for more informed discussions and, ultimately, a better appreciation of the players’ actual earnings.