It’s the richest deal in US sports history. It’s also smart money for KC. Let’s talk about the long-term implications of the Chiefs’ colossal Patrick Mahomes contract.
Fresh off a Super Bowl victory against the San Francisco 49ers, Patrick Mahomes became eligible for a contract extension. Four months later, the Chiefs quarterback signed a record-breaking 10-year contract worth up to $450 million, including $141 million guaranteed.
The deal can reach a $503 million maximum if the player satisfies every incentive, and though that’s not likely, the contract is still the largest in US sports history by total value, comfortably surpassing Mike Trout’s 12-year, $426.5 million pact with the Los Angeles Angels.
At the time, the Mahomes contract set the market for how much a superstar-level quarterback could be paid. It’s notable, however, that no one would surpass his $45 million annual average for nearly two years; this was primarily because the NFL salary cap dropped from $198 million in 2020 to $182 million in 2021 due to COVID-19 revenue dips. In the more immediate wake of Mahomes’ deal, both Josh Allen and Dak Prescott re-signed with the Bills and the Cowboys respectively. Neither of the two surpassed Mahomes’ mark of $45 million per year, but Allen set a new record with $150 million in guaranteed money, while Prescott was the NFL’s highest earner in 2021 at an incredible $75 million thanks to massive signing bonuses.
Since the conclusion of the 2020 season, however, a lot has changed.
The NFL salary cap took a massive $25.7 million jump entering the 2022 season. The leap served as a signal across the league for players who were eligible to sign with other teams to get as much money as they could. As a result, Aaron Rodgers ($50 million), Kyler Murray ($46.1 million), and Deshaun Watson ($46 million) have since eclipsed the $45 million average salary milestone in the Mahomes contract.
That has to have the Chiefs patting themselves on the back about the long-term investment they’ve already got squared away, but the ultimate extent of the brilliance engineered both by Mahomes’ agent and the Chiefs front office will be determined by the team’s ability to perform the right salary cap gymnastics in the years to come.
2022 marks the actual first season of the $450 million Mahomes contract, and its ramifications have already come into full view this offseason with the departures of superstar wideout Tyreek Hill and Pro Bowl safety Tyrann Mathieu (for the record, the Chiefs did offer Hill a new deal). Mahomes’ cap hit over the next nine seasons will exceed $40 million each year. In 2027, it will max out at an eye-popping $59.95 million.
The numbers are massive but there is a chance that by the time each of Mahomes’ cap hits takes place, it could be small in comparison to other contracts. That is because if the salary cap continues to increase, players will sign more record-breaking contracts. Take for example quarterbacks like Lamar Jackson, Joe Burrow and Justin Herbert.
Jackson is in the final year of his rookie contract and will be due for a substantial extension that will almost certainly exceed the likes of Watson and Murray. Burrow is similar to Mahomes in that he has reached a Super Bowl at an early stage in his career while also taking his franchise to the next level. Herbert, an incredible talent, has yet to have the success to match Jackson and Burrow, but has shown he has the talent to lift the Los Angeles Charges to new heights.
From 2013-20, the salary cap jumped at least $10 million every year. As the salary cap increases, players will be paid more. This means each of the quarterbacks signed will exceed the mark of the once record-breaking contracts.
Meanwhile, as new contracts break records with regards to guaranteed money and annual value, Mahomes’ deal, which will last until 2031, will remain the same (at least on paper). As years go by, the Chiefs and Mahomes are likely to restructure the contract, perhaps more than once, through common methods like converting roster bonuses or base salaries into signing bonuses in order to manage Mahomes’ effective impact on their salary cap outlook.
But while the Chiefs engage with this imperative, so will other teams tasked with extending their own signal-caller’s contract. And if/when the salary cap continues to increase opposing quarterbacks’ average salary, guaranteed money, and overall cap hit will undoubtedly exceed all Mahomes’ salary numbers. In return, the Chiefs will have to sign key free agents as well as draft talent that can bloom in their system in order to reach the mountaintop just as they did in the 2020 season.