The Baltimore Ravens have restructured quarterback Lamar Jackson's contract to free up nearly $40 million in salary cap space, a source told ESPN's Adam Schefter Wednesday. The move was necessary to accommodate the four-year, $112 million deal Baltimore reached with pass rusher Trey Hendrickson ahead of the new league year's 4 p.m. start.

The restructure converted most of Jackson's $51.25 million base salary into a bonus, spreading the cap charge across four years including two void years. His 2026 cap number dropped from $74.5 million to $34.54 million, generating $39.96 million in immediate relief. His 2027 cap figure rises accordingly from $74.5 million to $84.49 million, which would rank third highest leaguewide.

Baltimore is still pursuing a contract extension with the two-time MVP, who has two years remaining on his current deal. Without one, Jackson can become an unrestricted free agent after the 2027 season. Ravens owner Steve Bisciotti had spoken with Jackson at season's end about the urgency of reaching a new agreement before free agency opened.

Jackson, 29, holds NFL records for career rushing yards by a quarterback with 6,522 and shares the all-time passer rating record of 102.2 with Aaron Rodgers.

The 2025 season was a setback for both Jackson and Baltimore. The Ravens entered as Super Bowl favorites but missed the playoffs after Jackson missed four games with a hamstring injury and back contusion, finishing 6-7 as a starter with career lows in passing yards, touchdowns and rushing yards.

Jackson enters 2026 under new head coach Jesse Minter and offensive coordinator Declan Doyle.