Projecting Patrick Mahomes’ unprecedented, NBA-like contract extension with Chiefs
The Chiefs can enjoy the relatively low-cost version of Patrick Mahomes for about four more months. The price of poker will soon be jumping exponentially with the reigning NFL MVP.
Kansas City owner Clark Hunt and general manager Brett Veach would love their franchise quarterback to play next season for just the $2.7 million in the fourth year of his rookie deal. There’s no way that’s happening.
Trust me as a former GM who negotiated several major contracts with Mahomes’ agent Leigh Steinberg. Along with his partner Chris Cabott, Steinberg knows well that with a $200 million-plus contract on the horizon, they can’t allow Mahomes to risk a career-altering injury before he takes the field next season. And there’s no doubt Mahomes is deserving of the top spot on the NFL salary scale.
In his second season as the Chiefs’ starter, Mahomes is actually playing better than he did last year when he led his team to the AFC title game with 5,097 passing yards, 50 touchdown passes and 12 interceptions (113.8 passer rating). Mahomes has fueled a 4-1 start while playing on a sprained ankle since Week 1, without top receiver Tyreek Hill and without a dominant rushing attack. He has thrown 11 TD passes and no interceptions (114.7 rating), and his 1,831 passing yards are on pace to reach 5,859 yards, which would shatter Peyton Manning’s NFL record of 5,477 yards in 2013.
There’s already plenty of speculation on how big a leap Mahomes will take over the current highest-paid player in the league. Seahawks QB Russell Wilson is signed for four more years at $35 million per year in new money, and including this year, his compensation is $157 million over five years ($31.4 million per year).
Following Kansas City’s regular-season finale against the Chargers on December 29, Mahomes will be eligible to sign an extension. Mahomes’ camp will want negotiations to begin in earnest immediately, and Veach will have to comply.
The Chiefs are likely to quickly exercise the fifth-year option on Mahomes as a 2017 first-round pick (they have between the last regular-season game this season and May 3, 2020 to do so). That will lock Mahomes in at his scheduled $2.7 million in 2020, and for 2021, as a top-10 pick in his draft class, he would be at the transition tag amount — the average salary of the top 10 quarterbacks in 2020 (estimated at $24 million).
A five-year, $200 million extension would enable Mahomes to reach the coveted $40 million per year level in new money. But with the two years remaining on his contract factored in, his total cash under such a deal would be approximately $226.7 million over seven years ($32.38 million per year).
That would put him in the top spot over Wilson, but I don’t think it’s enough of a jump to satisfy Steinberg, who has often represented the NFL’s highest-paid player going back to Hall of Fame quarterbacks Warren Moon and Troy Aikman.
Steinberg will rightfully tell the Chiefs they would be wise not to drag things out until after new TV contracts and a CBA extension are likely signed sometime next year or in early 2021. That could only further complicate matters. He’ll also push to get a deal done before the next offseason program begins in April, as Mahomes will not want to risk injury by participating in anything other than the mandatory minicamp (if he would even do that with so much at stake).
I think Mahomes will be shooting for a five-year extension that totals $220 million in new money, an NBA-like $44 million per year. And I think he’ll hit that number or come very close, perhaps with a few incentives for being a Pro Bowler or MVP and the team being in the playoffs or Super Bowl.
Think those numbers sound absurd? The reality is that such a deal would really amount to approximately $247 million over his seven years under contract, or $35.28 million per year. That would put him 12 percent over Wilson’s deal on a per-year average, which is not outrageous, and it would give him a cushion for when the next wave of prolific QBs hits the pay window.
And the Chiefs can’t expect a Tom Brady-like discount. That might come down the road, when Mahomes has even more endorsements than already are in place. But with this contract, he wants to get paid max dollars.
I always felt the easiest deals to negotiate were with our best players. The market is well defined at the top, and it’s expected that the next superstar contract will lead the pack. There will be plenty of discussion on guarantees, and again, Mahomes will leapfrog current leader Jared Goff with his $110 million guarantee. I’m thinking it will wind up in the neighborhood of $165 million on Mahomes’ guaranteed money, which is similar percentage-wise to the Wilson and Goff deals.
The Chiefs can structure the contract to make the cap hit reasonable at least for next year and probably for 2021, too, if they need the cap room.
As an example, with a signing bonus of $70 million that would be partially deferred (topping Wilson’s $65 million and Aaron Rodgers’ $57.5 million signing bonuses) and a 2020 combination of base salary and roster bonus of $5 million, Mahomes’ cap number would be a very manageable $15 million next season. (The $70 million signing bonus would pro-rate to $10 million per year over his seven years under contract.) As the new TV money hits in future years and the salary cap correspondingly rises, so too would Mahomes’ cap number.
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As he ponders his future, Mahomes will want to stay in Kansas City with a top offensive-minded coach in Andy Reid, who at 61 should remain in his position for many more years. Mahomes surely appreciates that Reid was such a strong believer in his ability and leadership skills that he was willing to trade starter Alex Smith after a playoff season in 2017. Reid has designed a prolific offense that takes advantage of his QB’s immense talent, great instincts, fearlessness and terrific ability to improvise when things break down along with delivering in the clutch. Those are all traits of a Hall of Fame-caliber QB.
Contract negotiations are about leverage, and you can’t get much more of an edge than being a possible two-time reigning MVP by this season’s end.
When Mahomes and his agents put the squeeze on the Chiefs immediately after this season, Hunt and Veach will have little choice but to make a record-setting new deal happen in short order.
Jeff Diamond is a former president of the Titans and former vice president/general manager of the Vikings. He was selected NFL Executive of the Year in 1998. Diamond is currently a business and sports consultant who also does broadcast and online media work. He makes speaking appearances to corporate/civic groups and college classes on negotiation and sports business/sports management. He is the former chairman and CEO of The Ingram Group. Follow Jeff on Twitter: @jeffdiamondNFL.
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