Ngakoue would lose potential unrestricted-free-agent status next year if he holds out beyond Aug. 9, which is 30 days before the Sept. 8 season opener. If that deadline passes, he would not accrue his fourth season.
Because of that, there's optimism the sides could reach an agreement relatively quickly.
That the situation has reached this point is because of several factors that go beyond the fact that Ngakoue's camp is asking a price the Jaguars are unwilling to pay. Perhaps the biggest is the team's tight salary-cap situation because of a large amount of dead money and the retirement of linebacker Telvin Smith.
The Jaguars are carrying $24.4 million in dead money in 2019, the fifth-highest total in the league this season. The bulk of that total is the $16.5 million from the release of quarterback Blake Bortles. That's the highest single-player total in NFL history.
Signing Bortles to a three-year extension in February 2018 was one of the most questionable moves in franchise history. Bortles had the best season of his career in 2017 -- 21 TD passes, 13 interceptions, 16 total turnovers -- but the team decided to give Bortles an extension instead of allowing him to play the 2018 season on the fifth-year option at $19.5 million.
The three-year extension did give the Jaguars some cap relief in 2018 (he had a cap figure of $10 million) but it was a risk because Bortles had yet to put back-to-back good seasons together and he struggled with turnovers. He had thrown the most interceptions (64) and committed the most turnovers (79) of any player from 2014 to 2017.
Bortles regressed significantly in 2018. It was partly because of a rash of injuries along the offensive line and at tight end, but Bortles played so poorly that he was eventually benched for Cody Kessler. He threw only four TD passes in the final seven games in which he played, and the Jaguars eventually decided it was time to move on from Bortles, whom they selected third overall in 2014. He was released and is now a backup with the Los Angeles Rams.
Though they could have lessened the dead-money hit by releasing Bortles after June 1, the Jaguars decided to eat the entire $16.5 million in 2019. Releasing defensive tackle Malik Jackson, tight end Austin Seferian-Jenkins and safety Tashaun Gipson added $7.2 million to the dead-money total.
An additional $16.5 million in cap space would have given the Jaguars much more room to maneuver in negotiating an extension for Ngakoue by allowing them to assume a bigger chunk of the new deal in 2019.
Compounding the cap situation was Smith's decision to take at least this season off for personal issues. He had a $9.75 million cap figure in 2019, though the team can get that money back against the cap this season now that he has filed retirement paperwork with the NFL. However, the Jaguars must be under the cap by that amount this season in case Smith decides to return.
The Jaguars can spend that money and be at the cap limit, but if Smith decided he did want to return, the Jaguars would have to cut players to create $9.75 million.
Even with the dead money and Smith's $9.75 million counting against the salary cap -- it will come off in the coming weeks -- the Jaguars still have $9.1 million in cap space. While that's the 10th-lowest total in the NFL, there is still room for the Jaguars to work out a deal with Ngakoue that would include a prorated portion of any signing bonus.
The sticking point in the negotiations is apparently the average annual salary. The team agrees that Ngakoue has outperformed his rookie contract and deserves a new deal, but there's resistance to giving Ngakoue a deal similar to the ones that DeMarcus Lawrence and Frank Clark signed earlier this year.
Lawrence signed a five-year deal with Dallas worth $105 million ($21 million annually) with $65 million guaranteed, and Clark signed a five-year deal with Kansas City worth $104 million ($20.8 million annually) with $62.3 million guaranteed. The Jaguars reportedly offered Ngakoue a three-year extension that would pay him $19 million annually and included $50 million in the first two years, though it's unclear how much guaranteed money was included in the deal.
Ngakoue has recorded 29.5 sacks, 10 forced fumbles and 161 quarterback pressures since he entered the league as a third-round pick in 2016. He has more sacks than Lawrence (26), Dee Ford, (25) and Trey Flowers (21) in that same three-year span. The latter two got new contracts that guaranteed them $45 million and $56 million, respectively.
Ngakoue is due to make $2.02 million this season. If he reports after the 30-day threshold next month and doesn't get a new deal, he'll be a restricted free agent after the season, which means the Jaguars would have the right to match any offer from another team.
That certainly gives the Jaguars leverage, but there's a feeling inside the Jaguars facility that a deal will be struck by the deadline to ensure that Ngakoue, who already ranks third in franchise history in sacks, will remain a key part of the defense for the next several years.