Exploring all the pros and cons of a potential Tagovailoa extension with Dolphins

First of a four-part series on Dolphins quarterback Tua Tagovailoa

The question about whether the Dolphins should give Tua Tagovailoa a lucrative multiyear extension — instead of having him play on his $23.1 million fifth-year option and delay a long-term decision for a year — is often framed in the context of whether he deserves that extension.

But that muddles the issue with something that shouldn’t be any kind of determining factor.

Here’s the more relevant question: For the Dolphins, does the reward of giving Tagovailoa an extension outweigh the risk of giving him one if he doesn’t improve his shortcomings?

First, let’s get this out of the way: Big-time agencies for big-time quarterbacks — and Tagovailoa has one of the biggest in Athletes First — aren’t in the business of giving teams a bargain in exchange for long-term deals. And remember, Tagovailoa last year changed agencies, something players often do before contract negotiations.

So this argument that the Dolphins could pay much less now in a long-term deal than they might need to later doesn’t hold weight, particularly because Tagovailoa didn’t miss a game due to injury this past season.

Tagovailoa’s overall 2023 body of work (including leading the league in passing yards and finishing fourth in passer rating) exceeded that of several quarterbacks earning $38 million to $50 million per year, including Jalen Hurts ($51 million), Russell Wilson ($48 million average salary) and Derek Carr ($38 million). The Giants gave Daniel Jones $40 million a year, on average, over four years for achieving far less than Tagovailoa did and now presumably regret it.

(FYI: If you’re comparing the three youngest QBs on that list, Hurts has a 91.1 career passer rating and Jones has an 85.2 rating; Tagovailoa is at 97.1.)

So to suggest that Tagovailoa would take $30 million or even $35 million annually in a multiyear deal, in exchange for long-term security, seems naive, especially after a season when he didn’t miss a game.

So let’s examine the risks and rewards of the contract options with Tagovailoa:

THE REWARDS OF A LONG-TERM EXTENSION

Here are the potential rewards for the Dolphins if they extend him instead of having him play next season on the $23.1 million fifth-year option:

1). The deal can be structured in a way to give the team about $10 million in cap relief in 2024. There’s potential cap relief in 2025, too.

For example, Hurts’ five-year, $255 million extension with Philadelphia has cap numbers of $13.6 million in 2024 and $21.8 million in 2025. That’s far less of a cap burden than other shorter-term alternatives to keep him.

The 2024 quarterback franchise tag is projected to be at least $36 million, and the 2025 tag likely will be more than that.

Keep in mind that unlike Tagovailoa, Hurts was a second-round pick and thus ineligible for a fifth-year option in 2024.

But as overthecap.com’s Jason Fitzgerald explained via email, this type of contract that the Eagles forged with Hurts — called a triple bonus structure — is one the Dolphins could replicate with Tagovailoa if they wish.

So instead of a cap hit of $23.1 million next season, an extension for Tagovailoa could lower it to around $13 million. And that extra $10 million in cap space could be immensely helpful to Miami, which stands $51.9 million over the 2024 cap, per overthecap.com.

Hurts’ cap hits then jump to $31.7 million, $41.8 million and $47.2 million in three subsequent seasons (2026 through 2028).

So using the structure of Hurts’ deal, the Dolphins would have more roster flexibility the next two seasons by extending Tagovailoa but would then have big cap hits in subsequent seasons.

We also should note that the Chargers used a somewhat different cap allocation approach with Justin Herbert’s five-year, $262.5 million extension last offseason.

His cap hit of $19.3 million in 2024 is modest, but then it jumps to $37.3 million, $46.3 million, $58.3 million and $71.1 million. So the Chargers get only one year of a modest cap hit for Herbert.

2). If Tagovailoa raises his game from very good to elite, using the franchise tag to keep him in 2025 and perhaps again in 2026 would be a bigger cap burden than a long-term deal would be in 2025 and potentially 2026.

According to NBC Sports, a second consecutive franchise tag costs 120 percent of the salary from the previous season. A third consecutive tag (and that’s highly unlikely for quarterbacks) is either 144 percent of the salary from the second tag, 120 percent of the average of the top five salaries at the player’s position, or the average of the five largest salaries at the NFL’s top-paid position.

So if the Dolphins are absolutely convinced Tagovailoa will take another jump, an extension now makes sense.

But keep in mind that the Dolphins hypothetically would be able to keep Tagovailoa from hitting the market for four years (until March 2028), if they go year to year with him, using the franchise tag.

On the flip side, going year to year after 2024 or 2025 would be highly unusual and likely spur tension between any starting quarterback and his team.

3). The third advantage to the Dolphins with a Tagovailoa extension is more intangible and abstract: The player gets peace of mind, which might help his performance.

THE RISKS OF A LONG-TERM EXTENSION

1). This was Tagovailoa’s first fully healthy season since his freshman year at Alabama, when he played in eight games.

If injury issues resurface, the Dolphins would be on the hook for big cap hits in 2026, 2027 and 2028 and potentially 2025. They also would be on the hook for a ton of guaranteed money; as perspective, Hurts received $110 million guaranteed and $179 million guaranteed in the event of injury.

2). If he doesn’t improve in the three areas where he ranked below to well-below average in 2023 — against good teams and in late-game situations and in the face of a heavy pass rush — then the Dolphins would be stuck having a “pretty good quarterback” clogging their cap for four or five years.

That would make it unrealistic to keep some of their good players long-term and fill out a team around him.

3). If Tagovailoa doesn’t improve in the aforementioned areas and the Dolphins decide to move on, the dead money hits would be so severe that the Dolphins likely couldn’t replace him with any quality veteran starter who asks for a trade or becomes a free agent. It also would restrict their ability to fill out the rest of the roster.

As an example, let’s take a look at Hurts’ contract. In the highly unlikely hypothetical of Hurts regressing badly and the Eagles wanting to move on before the 2025 season, cutting him would result in a $90.8 million cap hit and trading him would bring on an $85.8 dead money hit or $25 million after June 1, 2025. For 2026, the numbers are $65 million and $21 million for trades (before and after June 1).

So if it doesn’t work out with Tagovailoa after giving him an extension — for health or performance reasons — there’s no realistic path to replace him other than the draft or signing a veteran backup type.

This must be said, too: Whether Tagovailoa is extended or not, finding a replacement would be difficult. Elite quarterbacks seldom come on the market. But if the Dolphins go year to year with Tagovailoa for another year or two or even three, you would remove the financial constraints that would cripple any attempt to replace him.

4). Let’s say Tagovailoa remains about what he is now — good (exceptional at times) but not elite. And let’s say the Dolphins draft a quarterback they believe is as good or better.

Not having Tagovailoa on the books, and essentially replacing him with a player on a rookie contract in 2025 or 2026, would give Miami $35 million to $50 million more in cap space to upgrade other areas of the team.

So what should the Dolphins do? If you crave cap savings the next two seasons — and want both parties to feel peace of mind and a sense of long-term stability — that’s the case to extend.

But if your priority is long-term flexibility if Tagovailoa doesn’t take the step from good to great, then going year to year with him is the more prudent course.