Mike Florio of Pro Football Talk put an article up today detailing where the Chiefs and Chris Jones stand on a contract. Per Florio, the Chiefs have offered Jones a three year, $74 million contract and that Jones would settle for a three year, $84.5 million contract. The numbers in the article are framed in a way to make the contract look much lesser than the recent Aaron Donald contract with the Rams but I think that fails to take into account the way that the Chiefs and many others around the NFL would likely view the offer.

The thing with contracts that often leads to the most confusion in the NFL is the concept of how to value a contract extension. A contract extension is typically valued based on the “new money” in a contract. The calculation is simple. Add up all of the money in the contract and subtract from that the money that is owed to the player on his current contract and then you have the new money in the deal. Divide that by the number of new years and you come up with the average per year on the contract.

The valuation in this manner makes sense. Essentially you are buying out a player’s free agency early and this new money is the value you are giving the player. Some constantly look down on this method of contract valuation saying it inflates the contract’s value but when you run through it logically it is the most fair way to value a deal and create a system that allows for teams to be extended prior to the expiration of their current contract- if every player demanded that a current year be ripped up a team would simply wait until the contract expires to make an offer.

However, there are rare instances where teams have agreed to negotiate as if the current contract does not exist. That occurred last season with Aaron Rodgers in Green Bay and then later with Aaron Donald with the Rams, which is pertinent to the Jones negotiation. Donald had three years remaining on his prior contract at a total value of $55 million. The Rams replaced those salaries with new salaries that totaled $95 million. With no new years added it was clear that this was just being viewed as a replacement contract and that is how we arrived at the value of $31.67 million for Donald.

The decision by the Rams to do that deal was likely very controversial among NFL front offices. From the Rams point of view they probably did not look at this as paying nearly $32 million for Donald but rather as a modification of his original six year, $22.5 million per year contract, bringing the value of the contract to about $29.2 million per year. It would not surprise me if this is how most NFL teams are trying to spin the Donald numbers when dealing with other pass rushers and defensive tackles.

The numbers reported by Florio are based on the idea that the Chiefs would follow a similar path as the Rams and just assume that this year doesn’t exist when it comes to doing a deal with Jones. I would think it is doubtful the Chiefs are thinking that way and in many ways the offer likely shows that.

The $74.5 million offer works out to $24.8 million a year, but if we value this as new money, it represents an offer from the Chiefs worth $55 million in new money over two new years, an average of $27.5 million. That number is a “cleaner” figure than the $74.5 million which certainly leads me to believe the Chiefs are taking a traditional approach to the contract valuation. The $84.5 million that Florio says is the magic number would lead to a new money total of $65 million, or $32.5 million a season, which would blow away any other extension for a non-QB and fly past Donald’s number.

$27.5 million a season is certainly a fair offer that splits the market between Donald and everyone else. $32.5 million is probably too rich for the Chiefs. For the most part almost all of the past history is on the Chiefs side other than Donald. Contracts are valued using new money. Older pass rushers (Von Miller, Chandler Jones, Cam Jordan) have all signed contracts that averaged anywhere from $13 million to $20 million a season. The Chiefs offer blows those numbers away.

So when it comes to evaluating offers made to Jones it is important to keep in mind the way that typical contracts are valued to see how the offer compares to the market, the majority of which are valued on the basis of new money.