When the final numbers came in, Patrick Mahomes’ 10-year contract extension looked even more enormous than it did at first. What was first reported by several sources as a more nebulous $400 million deal was actually light in the pockets. The final deal the largest in sports history, the first half-billion contract in sports history, and it makes an NFL player the highest-paid athlete in the world for the first time ever.
Steinberg Sports, Mahomes’ agency, laid out the official terms of the deal: It’s a 10-year extension that starts in 2022 and goes through the 2031 season at the end of a rookie contract that was set to pay the 2018 NFL MVP and reigning Super Bowl MVP $2,704,905 in the 2020 season.
Congrats to @PatrickMahomes on agreeing to terms on a 10-year extension worth $503 Million. He gets $477M in guarantee mechanisms and ability to have outs if guarantee mechanisms aren’t exercised. No trade clause. First half billion dollar player in sports history. History made. pic.twitter.com/beSGN4jyej
— Steinberg Sports (@SteinbergSports) July 6, 2020
The maximum value more than triples any other NFL contract.
Before the Mahomes deal, Falcons quarterback Matt Ryan was the champion of the max value contract, which happened when he signed his five-year, $150 million contract extension on May 4, 2018. Bears edge-rusher Khalil Mack was next with his six-year, $141 million extension signed on September 1, 2018. Then, Wilson’s deal, and then, 49ers quarterback Jimmy Garoppolo with his five-year, $137.5 million contract with the 49ers on February 8, 2019.
To put it into perspective, you could add those four contracts together and come up with a total max value of $568.5 million — just 65.5 million more than Mahomes’ max value.
The incentives are interesting.
The total value of the contract without incentives is $477,631,905, per Tom Pelissero of the NFL Network. What rounds it up to nearly $503 million is two sets of incentives, starting in 2022, per ESPN’s Adam Schefter — $1.25 million every year in which the Chiefs go to the Super Bowl, and $1.25 million each year in which Mahomes is named NFL MVP.
Mahomes still won’t break $1 million in base salary until 2022.
He’ll make $825,000 in base salary in 2020 and $990,000 in base salary in 2021 as part of the last two years of his rookie contract, though the $10 million signing bonus will ease that pain. Then, starting in 2022, his base salaries go from $1.5 million, all the way to $38 million in 2031.
What the heck are “guarantee mechanisms?”
It’s not a common term, but these could just be roster bonuses that obligate the Chiefs to pay Mahomes if he’s on the roster at the start of any league year. The interesting aspect of the deal, per the numbers Pelissero presented, is that the first five years of the deal are pretty much guaranteed except for injury (there’s a $140 million injury guarantee built into the contract), and then, the cash and cap hits take a real uptick.
Here's a breakdown of the cash flow on Patrick Mahomes' new contract with the #Chiefs. It'll take more than one tweet to fully explain, but the bonuses have varying vesting dates that paint a fuller picture of how the deal works. pic.twitter.com/LepwqYMT0K
— Tom Pelissero (@TomPelissero) July 6, 2020
As Pelissero also points out, the structure of the rolling guarantees have the salaries and bonuses vesting before they’re due.
Rolling guarantees are common in NFL contracts, but never over the entire life of a 10-year extension (12-year deal). Patrick Mahomes gets over $63 million fully guaranteed at signing and $103M by next March. Most of the salaries and bonuses vest a year or two before they’re due. pic.twitter.com/az8jsKBZgN
— Tom Pelissero (@TomPelissero) July 7, 2020
To say that Mahomes “has outs” if guarantee mechanisms aren’t exercised, as the Steinberg tweet does, may simply mean that starting in 2027, the Chiefs could find it prohibitive to pay the rolling bonuses from a cash and cap perspective. They could encourage Mahomes to renegotiate, or, per that possible language, Mahomes could become a free agent. There is a no-trade clause in the contract; it is not known whether there are prohibitions from placing the franchise tag on Mahomes in any year that it may be a little too beneficial on the team end.
Mahomes is the first quarterback to exceed $50m in max value. He won’t be the last.
As I wrote earlier today, Mahomes’ contract puts the pressure on the Cowboys to do something long term with Dak Prescott, and creates similar circumstances for the Texans and Deshaun Watson. And though Lamar Jackson’s rookie deal goes through 2021, you have to imagine there are people in Baltimore who are currently crunching the numbers, trying to figure out how to keep the 2019 unanimous NFL MVP in the fold for a good long time.
Mahomes’ deal expands the numbers where they were going anyway, with a new Collective Bargaining Agreement and broadcast revenue dictating higher salary caps every year. In that regard, Mahomes’ contract is less an outlier, and more a glimpse into the near future.