Most days, it seems pretty good to be Patrick Mahomes. Even by the lofty standards of the reigning Super Bowl MVP, though, Monday was a particularly good afternoon for him. The 24-year-old agreed to terms with the Kansas City Chiefs on what is reportedly the largest contract for an athlete in the history of sports, inking a 12-year deal which could end up being worth $503 million. Mahomes is a special player and he deserves to get an extraordinary contract.
So then, why am I feeling like the Chiefs just got away with a team-friendly deal? While the reported numbers represent a transcendent contract, the guarantees aren’t quite at that level. Mahomes has a résumé unlike any quarterback in football history through three seasons, but his contract in the short term is more in line with what we would have expected for other first-round quarterbacks than it might seem. It’s also a deal that likely made the Cowboys and Texans happier than they would have expected as they try to sign their own quarterbacks to extensions.
Let’s answer some of the critical questions coming out of the Mahomes deal and what it means for the Chiefs and the rest of the league:
Jump to a section:
Will Mahomes play out this entire deal?
How does this compare to other QBs?
Wait, what is a ‘guarantee mechanism?’
Why is 2025 so important for Mahomes?
Could this contract length be a trend?
How are Prescott and Watson impacted?
Is it fair to pick a winner or loser here?
What does this mean for Chris Jones?
What are the chances Mahomes actually plays out this whole deal and makes $503 million?
Slim. He might very well make more than $500 million over the next 12 years, but the chances that the two sides choose to ride this deal all the way out to 2031 are low. The structure of the deal, the history of quarterback contracts and the recent path of the salary cap all suggest that the Chiefs and their star aren’t likely to see the final few years of this contract under the current terms. A lot of NFL deals — especially deals which approach or reset the top of their respective markets — have team options tacked onto the end to raise their value or produce impressive round numbers in the media.
For this deal to play out as planned to its conclusion, Mahomes would need to be just good enough to justify these massive roster bonuses without being good enough to justify a new extension. More realistically, he will play out a portion of this deal and then earn a new extension down the line, well before 2031. The structure of this deal makes me think it will end up as a six-year, $183.4 million pact before the two sides negotiate a new contract after the 2025 season finishes, which would reduce $319.2 million of this deal to paper money.
Comparing this deal to Mike Trout’s 12-year, $426.5 million contract isn’t realistic, since all of Trout’s deal is fully guaranteed, while “just” $141.4 million of Mahomes’ deal is guaranteed, and that is for injury only. It’s more realistic to compare this to other quarterback contracts, with two recent deals coming to mind.
Where does this stand compared to other quarterback contracts?
You could easily argue that no player should be compared to Mahomes, who has a league MVP and a Super Bowl title in his first two full seasons as a starter. In terms of on-field performance, I agree. In terms of contracts, though, these sides were likely looking at the deals handed to other first-round quarterbacks since the league adopted its rookie scale for draft picks. That group consists of Mahomes and six other quarterbacks: Ryan Tannehill, Andrew Luck, Cam Newton, Blake Bortles, Jared Goff and Carson Wentz.
Of those two, Goff and Wentz are the most comparable for two reasons. One is that they each signed an extension after their third season, just as Mahomes did. The other is that they were signed more recently than the other three passers, as Wentz signed his extension in June of 2019 before Goff followed in September. Wentz got $107.9 million in injury guarantees on his deal, with Goff topping him at $110 million. Amid the salary cap rising 5.3% this year over 2019, Mahomes just got $141.4 million, which is all of the cash he’s due over the next five seasons.
Consider that Goff, Wentz and Mahomes were already due somewhere between $26.8 million and $27.6 million over the final two years of their respective deals before signing extensions. Wentz signed a four-year, $128 million deal. Goff signed a four-year, $134 million deal. Mahomes will make $155.8 million in new money over the next four seasons as part of his deal, which is about $14.7 million more than Goff after adjusting for cap inflation.
To put those numbers into context, let’s compare the deal Mahomes just signed over the next six years to the other first-rounders who signed extensions off their rookie deals. I’m going to leave out Bortles and Tannehill, whose deals trail the group. Pay attention to the cap percentage number on the far right:
As you can see, while Mahomes is set to make more than any other quarterback from this group, the difference isn’t staggering in the way that the length or total value of this deal suggests. On the other hand, this comparison undersells the value of his contract because of the contract structure. Here’s where the “guarantee mechanism” comes in.
What on earth is a ‘guarantee mechanism?’
The hot new term coined to make the Mahomes deal look even more significant, it appears that a guarantee mechanism is the language in a deal designed to trigger a guarantee at a particular date and time. The language itself is nothing new, but it plays a unique role in this particular extension.
Let’s start with a quick explainer. Most years of NFL contracts aren’t guaranteed, meaning that a veteran could theoretically make it all the way through the preseason before being cut without their income guaranteeing. As an example, Larry Warford’s base salary of $7.7 million with the Saints wasn’t guaranteed this season. The team was able to keep him on its roster throughout free agency, but once New Orleans drafted Cesar Ruiz in the first round, it no longer needed Warford and cut him in May, freeing up that $7.7 million.
When veterans sign extensions, they typically try to get it in writing that their organization will have to guarantee their salary at or near the beginning of the new league year in March, forcing their teams to either keep them or cut them while the league is still throwing around free-agent money. In Mahomes’ case, for example, the Chiefs have to guarantee each of his salaries and roster bonuses by the third day of each league year.
In the case of the league’s stars, though, they can get their base salaries guaranteed a year before they come due. Take Tannehill’s extension. In addition to a $20 million signing bonus, the Titans guaranteed his $17.5 million base salary in 2020 and his $24.5 million salary in 2021 at the time of signing, which is common for free agents or pending free agents when they sign new deals. Critically, though, Tannehill’s 2022 salary of $29 million becomes fully guaranteed on the fifth day of the league year in 2021, meaning that if the Titans want to keep Tannehill on their roster for more than one season, they’re in for three.
The Titans’ deal either guarantees him $62 million for one year or, more realistically, $91 million over three. I’ve called these sorts of guarantees “practical guarantees,” because while they aren’t actually guaranteed at the time of signing, they’re extremely likely to be realized. Todd Gurley’s 2020 compensation from the Rams is one of the rare exceptions for when these practical guarantees didn’t turn out to be guaranteed.
One of the reasons Mahomes’ deal is so unique, beyond the length, is that his yearly compensation guarantees in advance throughout the deal. As the NFL Network’s Tom Pelissero reported, his 2020-2022 base salaries and roster bonuses are guaranteed alongside his $10 million signing bonus when the deal is inked. His 2023 compensation guarantees in 2021, his 2024 compensation guarantees in 2022 and most of his 2025 compensation guarantees in 2023, with the remainder guaranteeing in 2024. After that, Mahomes’ money guarantees one year in advance, with his 2026 compensation locking in place in 2025, his 2027 compensation guaranteeing in 2026, and onward until 2030. There’s no precedent I can recall for that sort of guarantee structure.
The benefit of this sort of structure for Mahomes is to make it more difficult for the Chiefs to cut him. As an example, let’s say Mahomes tears up his shoulder in 2027 and misses the remainder of the season, and Kansas City decides that it’s better to move on. (I don’t want to live in this example, and I suspect most Chiefs fans would prefer to opt out, too.) He is due $44.5 million between his base salary, roster bonus and workout bonus in 2028, which guarantees before the 2027 season begins. If the Chiefs wanted to cut him, they would still owe him all of that $44.5 million for 2028, even though he wasn’t on the roster. While $44.5 million won’t seem like an exorbitant amount of dead money by 2028, having that sort of protection gives him leverage as he ages throughout this contract.
The Chiefs would still be able to trade Mahomes without incurring a salary-cap disaster, but the contract has a no-trade clause, so he would be able to refuse any deal if he wanted to stay in Kansas City. If he continues to play at a high level, this deal basically locks in his floor over the next decade at somewhere around $500 million.
Why do you keep bringing up 2025 as the time for a new extension?
There are a few reasons. One is that this present crop of quarterbacks — Goff, Wentz, Dak Prescott and Deshaun Watson — will all be signing new deals around that time. With Goff and Wentz locked up until 2024 and Prescott and Watson reportedly seeking shorter extensions, some of Mahomes’ peers will be resetting the top of the market. Those deals are also likely to come after the league has doubled their television rights, meaning they could exist in an environment where the cap is north of $300 million as opposed to the $198.2 million mark of today.
Next is the guarantee structure of the deal. The big year on the contract comes in 2027, when Mahomes has a $10 million base salary and a roster bonus of $49.4 million. He’ll make $59.5 million in cash that year, which is a staggering sum to think about by NFL standards. Traditionally, when teams have that sort of increase in a contract, it’s used to spur them into signing an extension or a restructure; Joe Flacco’s post-Super Bowl deal with the Ravens is an example.
Mina Kimes is stunned when coming across the news of Patrick Mahomes’ 10-year extension on her phone.
That 2027 figure guarantees on the third day of the league year in 2026, which is why the window for a new Mahomes deal would likely be before that deadline hits. At that point, he will be staring at a six-year, $294.2 million contract with just under $42 million already guaranteed. An average annual salary of just over $49 million per year might sound great right now, but if the cap hits $300 million in 2025, that would only amount to 16.3% of the cap. If he continues to play at this level, he’s going to deserve more money and get a higher percentage of that money guaranteed. Mahomes will be 31 in 2026 and could reasonably sign a restructured contract with an added year or two or a new deal altogether.
The flipside would also be true, although it’s far less likely. If Mahomes took a step backward for some reason and wasn’t playing at his currently established level, the Chiefs would likely try to use the threat of cutting him to bring down that $59.5 million figure in 2027 as part of an extension. In this scenario, they would be stuck eating $38.9 million in dead money on their 2026 cap.
Why haven’t other NFL players signed deals of this length?
Mahomes has the longest deal in football, topping the eight-year extension signed by Tyron Smith with the Cowboys in 2014. To my knowledge, this is the longest extension signed by any player since Brett Favre and Drew Bledsoe signed 10-year extensions in 2001. Philly tackle Lane Johnson is the only player under contract past 2026, and his deal expires in 2028. Mahomes is on the books through the 2031 campaign.
Typically, if a player is good enough to justify this long of a contract, it’s better for him to take a shorter deal and either get a crack at free agency or use the threat of free agency to negotiate a market-value deal). The cap has grown at a faster rate than most NFL contracts and seems extremely likely to rise dramatically in the medium-term once the league negotiates new television contracts.
The only way a player would be able to justify signing a deal of this length would be if his team was willing to both guarantee the majority of the contract and pay him like a star the whole way. The Chiefs are practically guaranteeing the entire deal, and while the contract isn’t tied to a percentage of the salary cap, Mahomes would be compensated handsomely if he played out the entire deal.
Leaving their current contracts out of the equation, is there anybody else in the NFL you could realistically do that for right now? Every non-quarterback is immediately off the board. All the guys in the twilight of their careers are out. You wouldn’t do it for anybody 30 or older and be stuck with the risk of paying someone nearly $200 million over the final four years of this deal, so you would rule out Russell Wilson. Goff isn’t good enough, and Prescott hasn’t shown that sort of ceiling yet. Wentz and Watson both have significant injury histories. The only guy from the Class of 2018 who would even be under consideration is Lamar Jackson, and as smart as I think he is about protecting his body, I would still be a little scared about basically guaranteeing him 10 years.
Mahomes is realistically the only player who could justify this sort of deal. While someone like Joe Burrow could command a similar sort of deal three years from now if he plays at an MVP level, my guess is that Mahomes’ deal is going to be one of a kind.
How does Mahomes’ contract impact Prescott and Watson?
The Cowboys and Texans are breathing a sigh of relief. If Mahomes had signed a short-term contract with a big average annual salary, those two teams would have been forced to negotiate off that deal as they tried to lock up Prescott and Watson, respectively, on their own extensions. And while the teams would have surely preferred to come to terms on agreements with their quarterbacks before the Mahomes deal finished up, this isn’t as bad as they would have feared.
There have been suggestions that Watson is looking for a three-year extension to the two years and $19.9 million remaining on his current contract. Mahomes got $113.9 million in new money across the first three years of his extension and will have an average annual salary of $28.3 million over that time frame, leaving the guarantee structure aside.
While Houston might try to play a hard line on treating the Mahomes deal as an outlier when the team negotiates Watson’s deal, coach and general manager Bill O’Brien’s recent track record suggests that he’s less concerned about negotiating the best deal down to the final penny than he is about having his desired core of players locked up for years to come. A three-year, $120 million extension for Watson would push the Texans star’s total compensation ahead of Mahomes over the next five years while keeping his average salary at a relatively team-friendly number of just under $28 million per season. I would expect this contract to come together relatively quickly now that Mahomes’ deal is done.
Prescott’s deal will be a little trickier, since he has already played through his rookie deal and is on a franchise tag. As I mentioned earlier this offseason, he could go year-to-year and end up making nearly $188 million over the next five seasons. Everything reported about this situation suggests the Cowboys and Prescott are disagreeing less about the money involved than they are about the years of the contract, with the quarterback preferring a shorter deal and the Cowboys wanting a longer one.
I don’t think the Cowboys would offer Prescott an 11-year extension to his franchise tag, but the Mahomes deal gives Dallas more fuel for its side of the argument. Prescott was always going to get more money than Mahomes over the next few years. While he will make $141.5 million over the first five years of his new deal, a Prescott contract is likely to come in somewhere between $170 million and $190 million over that same time frame. If anything, the Mahomes deal getting done makes it a little more likely Prescott and the Cowboys come to terms before the July 15 deadline.
Is this a good deal for both sides? Did one side win?
Both Mahomes and the Chiefs can generally feel good about this deal. He and his representation wanted to come away with something that blew away the typical quarterback contract. The numbers on this deal aren’t figures we talk about when it comes to even the best football players. Nobody in league history has earned more than Eli Manning’s $252.3 million. Mahomes just signed a contract for nearly double that much money over the next 10 years, and it’ll be difficult — although not impossible — for the Chiefs to get out of the deal unless Mahomes wants to sign for more money. This is one of the most significant contracts in pro football history.
And yet, the more I look at it, the more I feel like this deal is risk averse. The contract is structured to make it almost impossible for the Chiefs to cut him, but what are the chances that they’re going to do that over the next decade? It would take a catastrophic injury or an unprecedented case of the yips for the Chiefs to cut him, and insurance could have helped cover the risk with the former. Obviously, I can never fault him or anyone else for taking this kind of money. I just think you can make a case that he gave up a lot up front in this deal without getting something like a guaranteed percentage of the cap down the line.
While there’s a huge total value on paper, the guarantees and the short-term cash flow of the deal don’t blow away the competition. So much of what makes this deal truly staggering doesn’t guarantee until 2026 or start arriving in Mahomes’ bank account until 2027, and by then, it might not be a stratospheric deal.
Dan Orlovsky explains why Patrick Mahomes’ 10-year extension with the Chiefs is good for all parties involved.
As an example, the most popular number tossed around for Mahomes publicly was $40 million per year on a new extension. If he had signed a four-year, $160 million extension, he would have made $187.6 million over the next six seasons, slightly more than he’ll make through the first six years of his new deal. He would then been up for free agency after the 2025 season, which likely would have forced the Chiefs to the negotiating table again in 2023 or 2024 as the new TV money hits.
The final six years of this new deal amount to $294.2 million without any significant up-front guarantee remaining. Mahomes would likely do better than that if he were negotiating a year away from free agency or the franchise tag in 2024 or 2025. He still could if the Chiefs are willing or want to avoid that $60 million payout in 2027, but he is going to be underpaid in the short-term and have less leverage in the long-term than he would have by signing a five-year extension this time around.
From the Chiefs’ perspective, they lock in a guy who is on a Hall of Fame track for about as long as they want. They do so without destroying their cap or making a huge upfront payment out of their coffers; in fact, this deal barely changes their short-term cap situation. Mahomes’ cap hits over the next two seasons before the extension were set at $5.3 million in 2020 and $24.8 million in 2021, and they’ll be virtually identical after this deal. By keeping their cap obligations for Mahomes relatively low in the years to come, the Chiefs might be able to make another signing before the July 15 deadline …
Does the Mahomes signing means Chris Jones is on the way out?
While the Chiefs could still decide to trade Jones or let him play out his franchise tag, they’re still in a position in which they can get an extension onto their cap for the defensive tackle. Kansas City only has $3.5 million in remaining cap space, but with Jones occupying a $16.1 million cap hold, it could use a more traditional extension to get him locked up without needing to create additional cap room.
There are reasonable questions to be raised about signing Jones to an extension. The Chiefs had a better pressure rate, sack rate and a far better run defense in 2019 with him on the sidelines than they did with him on the field. With that being said, he was also my pick for Super Bowl MVP after he helped take the game back for the Chiefs.
If they could sign the guy who won Super Bowl MVP and the guy who arguably should have won the award in a matter of two weeks this July, they’ll probably feel pretty good about their chances of getting Jones another shot at Super Bowl honors. With Mahomes in the fold, they can rightfully dream about adding multiple Super Bowl trophies to the one they took home in Miami this February. The three most important things in football are winning a Super Bowl, finding a franchise quarterback and holding onto him for as long as possible. The Chiefs have now done all three.
Credit: Source link