That $500 Million Number May Look Big, But Patrick Mahomes Is Actually Giving Up a Lot
Shortly after news broke Monday about Patrick Mahomes's 10-year contract extension, lists started circulating on Twitter of other similar deals in NFL history. Of course that includes one I'm very familiar with, having handed out Brett Favre's contract in 2001.
While I like to touch on many topics in my Business of Football column, analyzing long-term deals for MVP quarterbacks is right in my wheelhouse. And plenty of people wanted to know what I thought of the Mahomes deal.
My first thought, and my continuing thought: Why in the world would Pat Mahomes negotiate such a long deal? NFL teams love long-term deals; it gives them cost certainty and, unless there is a full guarantee (which there never is), the team has optionality to exit the deal. Further, the top-tier quarterback market goes up every year; there will obviously be new leaders after Mahomes sets the pace this year. Thus, the real key to the deal would be for Mahomes to have that optionality on his side, allowing him to either (1) opt-out of the deal at an early juncture, as NBA superstars have regularly negotiated, (2) have market adjustment to quarterbacks that ascend past him in the marketplace, or (3) have a built-in adjustment to the ascending salary cap, whether through percentage or cash compensation.
According to reports, Mahomes was unable to achieve any of these optionalities. In other words, the Chiefs were able to entice him with a huge number to avoid any precedents that could be used by other players on their team or other teams. Without that, it is hard to see the value of locking in for such a long term unless, of course, getting a magic number was the goal. And it appears it was.
The Mahomes camp put out that this deal is north of $500 million, a massive number that the media can build stories around. The real deal? Well, Mahomes has a $10 million signing bonus, the level of a mid-tier free agent, and had to commit for the extraordinary time frame of 12 years. Further details are needed on the "full guarantee" but the deal is loaded with "guarantee mechanisms," a euphemism for contingent monies (roster bonuses) depending on Mahomes remaining on the team. Of course, no one is now suggesting Mahomes will be in danger of being cut, but it is Mahomes, not the Chiefs, who bears the risk of those contingencies. Obviously the total value of this deal, if earned, is enormous. But the market will inevitably pass him by, and while the Chiefs will want to do right by Mahomes, they will be armed with the leverage of contract control.
The Chiefs hit Mahomes’s target of $500 million, but the player gave up at least a couple of free agent contracts in return. Time will tell on this contract, but the Chiefs have the most precious asset in the NFL now in the fold for an NFL lifetime.
One other thought here anticipating a common argument: We need to lose the tired narrative about teams not being able to pay top-of-market quarterback contracts while fielding contending teams. That is tired and a cop out; there is no reason why a team cannot now pay a quarterback $30 million and build a strong roster with a $200 million cap. Keep in mind: Most NFL rosters are built with about half the team on rookie contracts, with cap numbers in the $1 million range (usually lower). That's about $25-30 million in cap room for half your roster, leaving $170-$175 million for the other half. Only poorly managed teams cannot handle this.
A final note on this deal: When I was coming up in the agent business, the standard-bearer in the industry was Leigh Steinberg. Leigh had some personal challenges but re-emerged in the most cutthroat of businesses to now have negotiated the largest overall contract in NFL history with the league's most important player. Kudos to Leigh's enduring resilience in the business of sports.
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