The details of Terry McLaurin’s contract extension are now publicly available, and, as most knowledgeable NFL observers had expected, the deal is not as clearly lucrative as Monday’s reporting would have indicated. Yes, the extension adds 3 years and more than $96m to McLaurin’s existing deal, but the guarantees are modest and the opportunities for the Commanders to save cap space by cutting or trading Terry in either of the final two years of his contract offer a great deal of flexibility to the team.
The average annual value of the extension is consistent with the rest of the top-tier receiver contracts we’ve seen recently and McLaurin can look forward to solid cash flows in 2025 and 2026, but little certainty beyond that.
All of the details on this contract extension were sourced from Over the Cap, which is, in my opinion, the best and most reliable source of information about NFL player contracts available to the general public.
Terry McLaurin’s contracts – old and new
What you see below is the final year(s) of Terry McLaurin’s 2022 contract extension (2025 + 2026 void year) above the blue line.
Below the blue line is his new extension, which he signed this week.
The balance of the 2022 extension
The key figures to focus on from Terry’s 2022 contract extension are:
- 2025 base salary: $15.5m
- Prorated signing bonus: $5.6m for two years (’25 + ‘26 void year)
Breaking down the new extension
There’s a LOT to take in on this new extension, but what’s clear is that the $96m we heard reported on Monday was more aspirational than practical as the guarantees in this contract are quite limited.
What happened to the 2025 season with this extension?
Signing bonus
The current extension includes a $30m signing bonus which is prorated at $6m per year for 5 years (including the new void year of 2029 when Terry will be 34 years old).
- $13.75m of Terry’s 2025 base salary was converted to signing bonus, reducing the 2025 cap hit by $11.3m ($25.5m – $14.2m)
- An additional $16.25m of new money was paid to reach the $30m signing bonus
Other 2025 compensation
- All other 2025 bonuses disappeared except for the $850k in per-game roster bonuses. Basically, the slate was wiped clean with respect to any money that Terry might’ve lost for skipping offseason/preseason workouts or training.
- Terry’s new 2025 base salary of $1.75m is fully guaranteed
Guarantees
As I indicated above, the guarantees in this contract are quite limited in comparison to the guarantees we’ve seen in other top-tier WR extensions recently.
McLaurin’s total guaranteed money at signing is $44.65m:
- Signing bonus – $30m
- Base salary guaranteed at signing – $14.65m (2025 + 2026 base salaries)
Remembering that $13.75m of this guaranteed money comprises conversion of Terry’s 2025 base salary, the NEW MONEY guaranteed at signing is $30.9m.
2026 Option
There is a $10m option payment to Terry ahead of the 2026 season, which is prorated at a rate of $2.5m per year for 4 years (2026-2029)
While not guaranteed at signing, this option forms part of Terry’s guaranteed money for the ‘26 season, raising the guaranteed amount to $40.9m and improving his 2026 cash flow.
Cash flows
With so much emphasis on salary cap in NFL reporting, it’s easy to forget that what really matters is CASH. The player wants to get as much as possible as soon as possible while the team wants to manage it’s flow.
Here are the expected cash flows under this extension:
- 2025 – $32.6m (signing bonus, base salary, per-game bonus)
- 2026 – $24.25m (base salary, 2026 option, per-game bonus, workout bonus)
- 2027 – $25.5m (base salary, roster bonus, per-game bonus, workout bonus)
- 2028 – $31m (base salary, roster bonus, per-game bonus, workout bonus)
You can see that the cash flow is fairly level, with Terry getting the biggest cash amount this year, and the remaining 3 years ranging from $24.25m to $31m.
Average Annual Value
Rather than focusing on cap hits and dead cap, which can be misleading, it’s important to consider cash flow when trying to understand the average annual value of a contract. To calculate the AAV via cash flow, simply add up the cash payments up to the end of a particular season and then divide by the total number of seasons.
Here is what Terry would actually earn in AAV if he were to be cut at the and of the 2nd, 3rd or 4th year of this deal.
- 2026 – $28.43m
- 2027 – $27.45m
- 2028 – $28.33m
Remember that these average annual value numbers include the 2025 money that was left from Terry’s 2022 extension, so the annual averages are somewhat reduced.
New Money
Looking at just the new money added to the deal, the breakdown would be:
- $16.25m – new money signing bonus
- $10m – 2026 option payment
- $61.85m – base salaries (’26-‘28)
- $2.55m – per-game roster bonuses (’26-‘28)
- $4.85m – Roster bonuses (’27 & ‘28)
- $1.5m – Workout bonuses (’26-‘28)
These six components add up to $97m — an average annual value to the 3 new years that comprise the extension of $32.3m per year, which is very much in line with the initial reported numbers.
The fly in the ointment, however, is that it will require something close to a perfect storm for McLaurin to play out this contract and actually earn all this new money.
Bottom line
This contract and the structure of its guarantees appear to lock Terry in through the 2026 season, and then provide options for the team to keep him in 2027 and/or 2028 if they see value in having him on the roster.
At the same time, the Commanders can reduce their cap hits substantially in ‘27 and ‘28 by trading or releasing McLaurin. Any team that traded for Terry would take on cap hits of $25.5m in 2027 and $31m in 2028.
Commanders current salary cap situation
Per Over the Cap, the Commanders now have estimated available cap space of approximately $26.55m for the upcoming ‘25 season.
Further, 2026 available cap space is currently estimated to be $60.66m with 34 players under contract — numbers that are similar to the situation Adam Peters faced at the start of the current league year.
Almost surprisingly, Over the Cap lists 25 players under contract through 2027, indicating that efforts to build a stable core roster are starting to show results.
