The Miami Dolphins signed quarterback Tua Tagovailoa to a four-year, $212.4 million contract extension in July 2024 a couple of days after training camp opened. Nothing has gone smoothly for Tagovailoa since signing the extension.
Tagovailoa suffered his third diagnosed NFL concussion during a Week 2 game versus the Buffalo Bills last season. Because of the increasing severity of the concussions, there were calls for Tagovailoa to retire. Tagovailoa returned to action after missing four games while on injured reserve because of the head trauma.
Performance has been the primary issue with Tagovailoa this season. Tagovailoa is coming off his second straight three-interception game in Week 7 against the Cleveland Browns, which dropped Miami’s record to 1-6. He was benched for 2025 seventh-round pick Quinn Ewers during the fourth quarter of the Browns game.
Tagovailoa’s 10 interceptions are tied for the NFL lead. His 82.8 passer rating and 9.4 yards per completion are the worst in his six NFL seasons. Throwing teammates under the bus publicly for being late to or missing players only team meetings following Week 6’s loss to the Los Angeles Chargers hasn’t helped Tagovailoa’s cause.
Tagovailoa’s regression has prompted speculation about him losing his starting job. A quarterback change won’t be taking place for Week 8’s game with the Atlanta Falcons. It will only be a matter of time before Tagovailoa is replaced in the lineup despite Dolphins coach Mike McDaniel’s vote of confidence in his Wednesday press conference, unless the quarterback has a turnaround.
Tagovailoa’s decline is raising questions about how much longer he will be in Miami. A trade won’t be a realistic possibility given Tagovailoa’s poor play and the durability concerns because of his multiple concussions.
Tagovailoa’s contract holds the answers. There aren’t any good solutions for the Dolphins because of the way the deal was structured.
Tagovailoa’s contract details
Tagovailoa’s $53.1 million-per-year extension runs though the 2028 season. His contract has $167.171 million in guarantees where $93.171 million was fully guaranteed at signing. The $93.171 million included a $42 million signing bonus, which is prorated on the salary cap at $8.4 million annually from 2024 through 2028.
Tagovailoa’s deal contains two option bonuses. The double-option bonus is one of the more complicated structures with NFL contracts.
Tagovailoa’s fully guaranteed $50.046 million 2025 base salary reduced to $25.046 million when an option for a dummy or fake 2029 contract year voiding five days after the 2028 league year’s Super Bowl in February 2029 was exercised this past March during the first couple of days of the current league year. There was a corresponding $25 million payment (i.e.; option bonus) in order to get this dummy contract year.
Option bonuses are prorated over the life of a contract (up to a maximum of five years), including the option years, beginning in the league year when the option is exercised. This means the $25 million option bonus is prorated on the salary cap at $5 million annually from 2025 through 2029.
The second option must be picked up between the first day (March 11) and 10th day (March 20) of the 2026 league year. Paying the required $15 million for Tagovailoa’s dummy 2030 contract year, which also voids five days after the 2028 league year’s Super Bowl, will drop his fully guaranteed $54 million 2026 base salary to a fully guaranteed $39 million. This $54 million was guaranteed for injury at signing and became completely secure in March on the third day of the 2025 league year.
From a salary cap standpoint, the presumption is option years will be picked up. Because of this, the $15 million is being prorated on the salary cap at $3 million annually from 2026 through 2030.
Tagovailoa’s 2026 cap number is listed as $56.4 million. The components are $8.4 million of signing bonus proration, $5 million of option bonus proration (the first option), $3 million of option bonus proration (the second option), Tagovailoa’s reduced $39 million base salary, a $250,000 workout bonus and $750,000 in per-game roster bonuses ($44,117.65 for each game active).
There’s another relevant part of Tagovailoa’s contract. It’s his 2027 base salary. Out of this $31 million, $20 million was guaranteed for injury at signing. Next March 13 on the third day of the 2026 league year, $3 million of the $20 million is fully guaranteed. Another $17 million becomes fully guaranteed on the third day of the 2027 league year.
Here are scenarios in which the Dolphins could part ways with Tagovailoa and the financial impacts each would present:
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Scenario 1
- 2026 release: No post-June 1 designation/no option exercise
- $42.8 million 2026 salary cap increase/$99.2 million 2026 dead money
Cutting Tagovailoa conventionally in 2026 is virtually impossible. The Dolphins would have $99.2 million in dead money, a cap charge for a player no longer on the roster, by releasing Tagovailoa before exercising the option for his voiding 2030 contract year and $3 million of the $20 million guaranteed for injury in 2027 becomes fully guaranteed next March 13.
The record for dead money related to an individual player in one league year is quarterback Russell Wilson’s $53 million because of the Denver Broncos releasing him in March 2024. The $99.2 million for the 2026 league year would be close to twice as much as Wilson’s record-setting amount.
Without exercising the option, Tagovailoa’s fully guaranteed $54 million 2026 base salary would count entirely on Miami’s books. There also wouldn’t be any of the proration for the $15 million option bonus that wouldn’t be paid.
The dead money would consist of Tagovailoa’s fully guaranteed $54 million 2026 base salary, $25.2 million of signing bonus proration relating to his 2026 through 2028 contract years and the $20 million of option bonus proration from these three contract years as well as the dummy 2029 contract year.
Scenario 2
- 2026 release: Post-June 1 designation/no option exercise
- $11 million 2026 salary cap increase/$67.4 million 2026 dead money/$31.8 million 2027 dead money
Releasing Tagovailoa with a post-June 1 designation isn’t as cap prohibitive as cutting him conventionally. Nonetheless, the 2026 dead money is $11 million more than Tagovailoa’s listed 2026 cap figure. The same timing as without using a post-June 1 designation would apply.
A team can release two players each league year before June 2 using a post-June 1 designation that will be treated under the cap as if released after June 1. With a post-June 1 designation, a team is required to carry the player’s full cap number until June 2 even though he is no longer part of the roster.
The player’s salary comes off the books at that time unless it is guaranteed. Tagovailoa’s 2026 base salary wouldn’t reduce from $54 million to $39 million because the option isn’t being exercised under this scenario. Since this $54 million base salary is already fully guaranteed, it would remain a Miami cap charge.
Only the current year’s bonus proration counts toward the cap with players released using a post-June 1 designation. The acceleration of the bonus proration in future contract years is delayed until the following league year (2027 in this case), which typically begins in early to mid-March.
The total dead money or residual cap charges is still $99.2 million. It’s taken over two years with $67.4 million in 2026 and $31.8 million in 2027 instead of all during the 2026 league year. The $67.4 million consists of the $54 million 2026 base salary, $8.4 million in 2026 signing bonus proration and $5 million in 2026 option bonus proration.
The $31.8 million for 2027 would be composed of $16.8 million in signing bonus proration from Tagovailoa’s 2027 and 2028 contract years and the $15 million in option bonus proration relating to the final three years of the deal, which includes the voiding 2029 contract year. Tagovailoa would be off Miami’s books beginning in 2028 with use of a post-June 1 designation.
Scenario 3
- 2026 release: Post-June 1 designation/option exercised
- $1 million 2026 salary cap savings/$55.4 million 2026 dead money/$43.8 million 2027 dead money
The only viable option for getting rid of Tagovailoa in 2026 is releasing him with a post-June 1 designation after exercising the second option. The timing would be the same as with the other two scenarios.
The Dolphins will have $1 million in 2026 cap savings by releasing Tagovailoa in this manner. The difference from Tagovailoa’s listed $56.4 million cap number would be the removal of his $250,000 workout bonus and $750,000 of per-game roster bonuses from Miami’s salary cap on June 2.
The $16.8 million of signing bonus prorated in the 2027 and 2028 contract years, the $15 million in first option bonus prorated from those two contract years in addition to the voiding 2029 contract years and the $12 million in option bonus proration from the 2027 and 2028 contract years as well as the voiding 2029 and 2030 contract years would be 2027 cap charges. This $43.8 million in 2027 dead money would represent a $9.6 million cap savings for the Dolphins from Tagovailoa’s $53.4 million cap number. Miami wouldn’t have any more cap charges for Tagovailoa after 2027.
Tagovailoa’s guarantees have offsets so Miami would get some nominal 2026 cap relief from the contract he signed with another team. Presumably, Tagovailoa would sign for league-minimum salary in 2026, just like Wilson did in 2024, because of his massive base-salary guarantee.
The $99.2 million of residual cap charges taken over two years, 2026 and 2027, would also be a record for most the dead money relating to a single player contract. That’s currently the combined $85 million for Wilson from 2024 and 2025 because he was released with a post-June 1 designation. The offset isn’t being factored into these calculations.
Scenario 4
- 2027 release: No post-June 1 designation
- $6.6 million 2027 salary cap savings/$46.8 million 2027 dead money
The Dolphins will need to release Tagovailoa before the third day of the 2027 league year to avoid being on the hook for an additional $17 million in 2027 salary. The 2027 dead money is $46.8 million rather than the $43.8 million by releasing Tagovailoa in 2026 with a post-June 1 designation as in Scenario 3 because of the $3 million of his 2027 salary being fully guaranteed in March 2026.
The components are the same as with a post-June 1 designation release in Scenario 3, plus the $3 million 2027 salary guarantee. The cap savings would increase to $9.6 million because of the offset with the salary guarantee provided Tagovailoa could sign a contract elsewhere in 2027 for $3 million or more. Regardless, Tagovailoa would be off Miami’s books starting in 2028.
Scenario 5
- 2027 release: Post-June 1 designation
- $34 million 2027 salary cap savings/$19.4 million 2027 dead money/$27.4 million 2028 dead money
The timing of releasing Tagovailoa will be the same whether or not a post-June 1 designation is used. By using a post-June 1 designation, the Dolphins would have $19.4 million in 2027 dead money composed of the $8.4 million in 2027 signing bonus proration, $5 million in 2027 first option bonus proration, $3 million in 2027 second option bonus proration and the $3 million 2027 base salary guarantee. The $27.4 million of dead money in 2028 would consist of $8.4 million in 2028 signing bonus proration, $10 million in first option bonus proration from the 2028 contract year and 2029 voiding contract year and $9 million in second option bonus proration from the 2028 contract year, as well as the 2029 and 2030 contract years. Tagovailoa would be off Miami’s books beginning in 2029.
Final thoughts
Conventional wisdom has suggested Tagovailoa will be with the Dolphins in 2026. Miami’s 2026 salary cap situation is less than ideal for letting Tagovailoa go next year.
The Dolphins have the NFL’s fourth-most 2026 cap commitments at $320.051 million with 36 players under contract, according to NFLPA data. The top 51 salaries (i.e.; salary cap numbers) matter under offseason accounting rules. There’s just under $715,000 of existing cap space that can be carried over to 2026. Assuming the 2026 salary cap is set in the $300 million to $305 million range, getting $1 million in cap relief by releasing Tagovailoa with a post-June 1 designation next March will only marginally affect the overage.
This thinking was before Tagovailoa’s subpar play. Unless Tagovailoa can start regaining his previous form where Miami starts winning games, there will likely be changes in 2026 with McDaniel being fired at a minimum. It would be interesting to see whether a new regime would even want Tagovailoa to be a bridge quarterback next season with the plan being to find his successor early in the 2026 NFL Draft.
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