Chiefs and Patrick Mahomes now have a 12-year commitment. pic.twitter.com/3j8NYur0aP— Adam Schefter (@AdamSchefter) July 6, 2020
Stunned is the only way I can describe my reaction right now to this news. I had joked in the past that maybe there might be some old school nature to this contract when it happened but never in a million years did I think we would see a contract that runs for 12 years happen in the year 2020. This contract will effectively cover Mahomes’ entire prime of his career leaving him with one last negotiation at the age of 37 for the “twilight of the career” contract.
I can’t really come up with any comparisons to this. Back in the day there was a rush in NFL circles to do $100 million contracts. Players that signed those contracts were players like Brett Favre and Drew Bledsoe in 2001, Donovan McNabb and Daunte Culpepper in 2002, Mike Vick in 2004, Carson Palmer in 2005, and then Tyron Smith in 2014. Culpepper’s was the only one that ran 12 years.
Players moved away from these contracts because for generational talents, specifically at QB, the money grew larger and larger at the position while the players were locked into contracts that were 4 and 5 years old and their salaries lagged. Players moved much more into the realization that the massive size of the contract did not matter but just that the contracts made more sense to run five to six years so that they had access to at least two free agent contracts during the “prime” years of their career. Right now the fight between Dallas and Dak Prescott is over a four year contract just to show how this is so out of the ordinary.
There are a few ways a contract like this could make a little sense. One would be to tie the value to the percentage of the salary cap which can be done with yearly escalators. QB contracts are one of the few positions in the NFL to grow at the rate of the cap but generally you enter into long term agreements to gain a benefit somewhere in the contract. Usually that occurs after the 3rd year when the contract begins to lag the market. It could be a risky strategy for both sides given the uncertainty in the cap the next few years if salaries are tied for the entire contract rather than just the back end of the contract. This would be something that I never anticipated a team doing, but its one of the few ways to makes sense for a player to do a deal this long. Most likely for a team to have this make any sense they would have to set some kind of running average threshold that only kicks in if in its entirety it falls below a certain number.
Another option would be to tie the value to the market. There were clauses in older contracts that can tie salary to the average of say the top 5 at a position or the top player at a position. That would give the team side a little more certainty knowing that the Mahomes base value will likely be a block on the market for some time and let thing grow more organically rather than seeing perhaps a spike in 2025 in the cap that makes Mahomes’ salary astronomical compared to other players at the position.
Could the deal be fully guaranteed? I think teams would want to hold onto their cash rather than do that but that might be a way to spin a contract if its say $45 million a season with the entire $450 million guaranteed. I dont like this for a player because contracts always rise and QBs usually last a long time but its something.
A consideration that I would also have is if this is a 12 year deal designed to sound massive but one that contains a set of options that effectively make these mini contracts. As an example you could do a deal where in 2025 there is a massive $100 million payment and another $40 million in 2027. Numbers that are high enough to really jump the value of the deal or get a player into free agency.
All I know is that it’s certainly something different going on here and one that I never expected see no matter what mechanisms are used. Im sure this will be said to be the ultimate “win-win” but its rare to see that happen, so I guess we shall see if it truly works out that way.
Jason is the founder of OTC and has been studying NFL contracts and the salary cap for over 15 years. Jason has co-authored two books about the NFL, Crunching Numbers and the Drafting Stage, which are widely circulated in the industry and hosts the OTC Podcast. Jason’s work has been featured in various publications including the Sporting News, Sports Illustrated, NFL Network and more. OTC is widely considered the leading authority on contract matters in the NFL.