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merlin
The Rams like what they've seen from Higs in preseason and expect him to pick things up a bit. That plus the fact they didn't draft a TE this year and start that 2 year timer ticking meant their backs were against the wall.
I see it as an overpay, but not a grievous one. And they probably think he has a good chance to live up to it or exceed it.
I really don't think they plan on developing him as a receiver. Maybe a few more targets.
I think they want him as a 6th OL type blocking TE.
One hint of that is that the new contract does not pay him like a top TE. It pays him more like a Celek type blocker.
It could be they extended him because they see him as integral to their blocking schemes.