Here's how much Ryan Tannehill's '$96 million' contract is actually worth
On the surface, the extension looked like a huge overpay for a young, still-developing, but largely average-to-date quarterback in Tannehill.
However, when breaking down the details of the extension, it's actually a great move for the Dolphins. Only a fraction of it is fully guaranteed, and the way it's structured buys the team extra time to evaluate Tannehill while maintaining the flexibility to reward him with higher pay if he earns it, or move on if he doesn't.
CBS's Jason La Canfora broke down the extension, noting that in the next two years, the Dolphins are only giving Tannehill a slight pay raise under the extension. According to La Canfora, Tannehill was set to make $18.2 million over the next two seasons - the final year of his rookie deal (2015) and a fifth-year option worth $16.2 million in 2016 that the Dolphins had already picked up.
Danny O'Neil of ESPN 710 Seattle argues that it's best to think of Tannehill's extension in stages. In Stage One, the 2015 and 2016 seasons, the Dolphins are basically paying Tannehill an extra $7 million more than what they had already agreed to.
With the extension, Tannehill receives $21.5 million in guaranteed money upon signing. As La Canfora notes, Tannehill's previous $18.2 million for 2015 and 2016 was only guaranteed for injury. The new $21.5 million gives him guaranteed money right away with a little extra bonus. In March of 2016, the Dolphins also have a $3.5 million option to pick up on Tannehill, bringing his pay over the next two years to a total of $25 million. After that, it's basically a year-to-year contract with no guaranteed money.
The extra money the Dolphins are giving Tannehill in Stage One buys them the greatest competitive advantage of the extension. In 2017, Tannehill has a $14.5 million option, which the Dolphins can choose to pick up or not. If they opt not to, they'd move on from Tannehill. If they do pick up the option, they'll grab Tannehill at a rate La Canfora describes as "well, well below what the exclusive franchise tag figure would be by that time." By 2017, when Tannehill is 29, entering his sixth season and the theoretical prime of his career, he'll be making more than $10 million less than the exclusive franchise tag, which La Canfora estimates will be about $25 million.
By the time Tannehill enters Stage Three of the deal in 2018, he'll have made slightly less than $40 million over three years - far from an overpay.
The bulk of the money comes in the backend of the contract, which the Dolphins are not locked into. Tannehill the ability to earn about $57 million between 2018-2020, about $19 million per season, which is still about an average rate for a top quarterback. If the Dolphins deem Tannehill hasn't made sufficient progress from 2015-2017, they also can opt out of the contract and move on without having to pay the big money in the final years of the deal.
La Canfora states, "This is essentially a deal that purchased one additional year of Tannehill's service time than what Miami already had the rights to, and then is a separate contract on the back end where, following 2017, the Dolphins could go year to year with him depending on his progress."
The Cincinnati Bengals and San Francisco 49ers have structured similar contracts with Andy Dalton and Colin Kaepernick. For quarterbacks below the top tier, this type of deal gives teams control over whether they want to move on from the quarterbacks or lock them in on a year-to-year basis at competitive rates.
The Dolphins basically bought themselves an extra year to evaluate Tannehill after 2016. If they like the way he's developing, they can reward him in the last three years of the deal, and if his progress has stalled, they can cut ties.