Winning with a $450M Contract

Michael Ginnitti
Michael Ginnitti, Managing Editor & NFL/MLB ExpertJanuary 24, 2022
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It's long been said that the second a quarterback signs a maximum level contract extension, his respective team's ability to remain in contention vastly decreases. And while recent data and trends do allude to that (no player with the highest average salary in the league has ever won the Super Bowl), the Bills & Chiefs just battled to the playoff death with respective quarterbacks sitting on $43M+ contracts.

So how have the Chiefs reached 4 straight AFC Conference Championships, despite the last two being clinched with their QB1 on a $450M contract extension?

Structure (view the full contract).

The cap isn't totally a myth (Saints, Eagles & Steelers fans know it eventually comes home to rob you in the end), but it's more flexible than an other financial metric in sports. It can be massaged, pushed around, piled up in one bunch, or even traded away in certain instances. 

The reality of Patrick Mahomes' contract extension is that it really doesn't start to get interesting from a cap & cash standpoint until 2022. Mahomes has earned just $33.7M cash over the first two seasons of his new contract - just $6M more than he would have reeled in had he stayed on his rookie contract through all 5 years. His 2020 cap figure was just $5.3M. His 2021 cap figure, following a $21M restructure, was $7.4M. His 2022 cap figure currently sits at $35.8M, but another restructure can drop that down to $13.8M - handing his team another $22M of cap space to work with next season. 

So this all sounds great, but the Chiefs are just pushing this down the line and delaying the inevitable, right? Right. That's exactly what's happening here. This is the window to push everything out of the way and keep pressing. Mahomes & his camp know he can't step onto a field and win 21 games on his own, and if the front office continues to do their job, moving cap around for Mahomes, Hill, Kelce, and some of the O-Lineman will continue to be an annual tradition - as long as the roster still smells like a contender. 

So when will things start to get dicey with this contract? If the 2022 restructure happens as I've laid out (convert his $27.4M roster bonus into signing bonus), this will create a $52.2M cap charge in 2023! Again, there's a $34.4M roster bonus to be restructured as needed (and a massive roster bonus each and every year through 2031), but eventually enough will be enough. There will be a thick black line drawn soon defining the current window (and significant, expensive pieces), and the next window - both of which will include Patrick Mahomes, and this gigantic contract. 

How long will Mahomes truly stay in this contract? The structure of it makes it purely his decision. With early guarantees built in all the way through, the Chiefs truly have no "easy" out with this deal, but it stands to reason that at some point, Mahomes and KC will agree to cut this thing off and start anew - both for team cap purposes, and for cash flow adjustment. 

Current Contract Yearly Cashflow Rank:
Year 1: $10.9M (210th)
Year 2: $33.7M (57th)
Year 3: $63.1M (24th)
Year 4: $103.6M (12th)
Year 5: $141.5M (5th)
Year 6: $183.5M (2nd, Allen)

When you look at the contract through this lens, it's clear as day just how middle-back loaded it is. There are left tackles and edge rushers and wide receivers ahead of Patrick Mahomes' 3-year cash payout. His own teammate Frank Clark earned $65.2M across his first three seasons. Dak Prescott's $126M is literally double the 3 year payout that Mahomes' agreed to. Current NFL Contract Cumulative Cash Flow

My guess for when the two parties force their way out? Prior to the 2027 season. This will give Mahomes $225M over 7 years of this contract (still with $252M to go). The 2027 season is currently slated for a whopping $59.95M cash. It stands to reason that much of this can be converted into a restructured extension signing bonus, ripping up the rest of the contract and structuring it to be a little more "player-friendly) for the second act to his career, when this current iteration of the Chiefs should be gone, if not dwindling down. 


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