It had been assumed that when Patrick Mahomes and the Kansas City Chiefs finally agreed to a contract extension it would be a market-setting contract. However, when Adam Schefter reported on Monday that a new contract had been agreed, the contract sent shockwaves around the NFL. As a 10 year extension, it is the first contract of that length in the NFL since Michael Vick and the Falcons back in 2004.
With Mahomes now signed by the Chiefs until 2031, the next question was naturally about the amount of money. Mahomes’ contract is officially worth $450 million, but he will have the ability to earn up to $503 million over the course of the contract. Therefore, Mahomes now has the largest contract in American sports history, surpassing the $426 million contract given to Los Angeles Angels superstar Mike Trout.
Patrick Mahomes signed a 10-year, $450 million extension that could be worth up to $503 million, per sources. The extension includes a $141.48 million injury guarantee, as well as a no-trade clause. It marks the first time an NFL player has had sports’ most lucrative deal. pic.twitter.com/kohX8rFSFN
— Adam Schefter (@AdamSchefter) July 7, 2020
However, with any contract in the NFL, the details are a crucial element. Let’s take a deep dive into the contract that has shocked not just the NFL world, but the sports world as a whole.[sv slug=”mocksim”]
Patrick Mahomes contract extension
The face value of the contract
On the surface, the Mahomes contract is both impressive and underwhelming at the same time. At $45 million per year, it shatters the current highest contract based on the annual average value. Including the final two years of his rookie deal, the contract is worth a base value of $480 million across the next 12 years.
The questionable part of the face value of the contract comes with the relatively little guaranteed money at signing. While there are injury guarantees of $141 million, the amount of money guaranteed at signing is just $63 million. Those guarantees are his $10 million signing bonus, his salary for the next three years, and roster bonuses in 2021 and 2022.
A $10 million signing bonus is extremely beneficial to the Chiefs. Even with the signing bonus pro-rating across just the next five seasons, that equates to just a $2 million extra cap hit in each of those five seasons. It also means that if the Chiefs decide to move on from the contract, they will not be left with a massive cap hit based on the prorated signing bonus.
On the surface, this looks a very clever contract for the Chiefs with such a small amount of money guaranteed and an extremely small signing bonus, but there is more to the contract that protects Mahomes down the line. This is a stark contrast to the two deals signed by Kirk Cousins in Minnesota, which are short-term deals with a lot of money tied up in signing bonus, making it hard for the Vikings to move on from their quarterback.
The fine details of the Mahomes contract
The majority of the money over the first half of Mahomes’ contract does not lie in his base salary, but in his roster bonuses. Mahomes’ base salary does not go above $2.5 million until the 2027 season, but in that time his roster bonuses vary from $21 million through to $38 million.
From 2027 onward, the base salary ramps up season-by-season culminating in a base salary of $38 million in 2031. His roster bonuses peak at $49.4 million in 2027 before slowly falling as his base salary increases.
A very well constructed contract for Mahomes
During the course of the contract, Mahomes is protected from the Chiefs simply moving on by rolling advanced guarantees. While no money from 2023 onwards is guaranteed at signing, his roster bonuses right through to 2031 will become guaranteed either a season or two in advance. The same can be said for his base salary until 2030. It is only the final 2031 base salary that does not become guaranteed until that season, but even then it is guaranteed on the third day of the league year.
Here are the exact details of when each part of his contract becomes guaranteed and what (per Spotrac).
- 2023 salary & roster bonus + workout bonus fully guarantee on the 3rd league of 2021
- 2024 salary & roster bonus + workout bonus fully guarantee on the 3rd league day of 2022
- 2025 roster bonus + workout bonus fully guarantees on the 3rd league day of 2023
- 2025 salary + workout bonus fully guarantees on the 3rd league day of 2024
- 2026 roster bonus fully guarantees on the 3rd league day of 2025
- 2026 salary + workout bonus, 2027 roster bonus fully guarantee on the 3rd league day of 2026
- 2027 salary + workout bonus + 2028 salary + 2028 roster bonus fully guarantee on the 3rd league of 2027
- 2029 salary + workout bonus & 2029 roster bonus fully guarantee on the 3rd league day of 2028
- 2030 salary & 2030 roster bonus fully guarantee on the 3rd league day of 2029
- 2031 roster bonus fully guarantee on the 3rd league day of 2030
- 2031 base salary fully guarantees on the 3rd league day of 2031
This means that the Chiefs never have an easy out from Mahomes’ contract without incurring at least a $50 million cap hit. While that $50 million may end up being a reasonably small percentage of the cap during the next 12 years, it will still be a significant cap hit for the Chiefs to swallow.
A further $25 million in incentives
The final $25 million of the deal can be found in incentives for Mahomes across the full 10 seasons of the extension. In each of those 10 years, Mahomes can earn a further $2.5 million. Half of that incentive ($1.25 million) is activated if the Chiefs win the AFC Championship Game, with the other half activated if Mahomes wins more MVP awards.
Starting in 2022, and for 10 years running, Patrick Mahomes has a $1.25 million incentive for winning AFC Championship game and a $1.25 million incentive for winning NFL MVP, per source. That’s $25M of incentives over 10 years, taking value of his deal from $477M to $503M.
— Adam Schefter (@AdamSchefter) July 6, 2020
Who wins this deal?
Right now it is hard to not look at the $450 million and $503 million numbers and not believe that Mahomes has absolutely come out of this deal on top. However, while agreeing to a deal with cap numbers ranging all the way up to $52.45 million may seem risky given the current uncertainty of the NFL salary cap, this deal has the potential to be very friendly to the Chiefs as well.
Prior to the current situation, the salary cap was expected to jump significant amounts in the next few years with a new television deal. Those jumps should still occur over the next 10 years, and this deal could end up looking extremely team-friendly. The year that the contract will likely be the most stressful for the Chiefs is 2027, when his current cap hit is projected to be $59.95 million. Even if the salary cap is at $300 million by then, Mahomes will still count 20% of the cap in that season. However, the Chiefs will have options to move money around with restructures during the deal, so a situation where that season becomes an issue may never happen.
With this contract, the Chiefs are securing their biggest asset and ensure he will not be going anywhere in the next decade unless they decide they want to move on. Of course, they are also gambling on the salary cap increasing a significant amount over the next decade — if it does not, the Chiefs could find themselves unable to build a team around Mahomes during the decade.
Ben Rolfe is an editor and writer at Pro Football Network. You can find him on twitter @benrolfe15.