Patrick Mahomes signed the richest contract in NFL history on Monday.
The Kansas City Chiefs signed their franchise quarterback to a 10-year deal potentially worth up to $503 million. In case you didn’t read that correctly, that is a little over half a BILLION dollars. We aren’t going to do a deep dive on how the contract pays out or whatever.
Every other network is going to be doing that all week. Let’s look and think about the ramifications of the deal for the rest of the league, the future, and what this means for Mahomes and the Chiefs.
I believe the Chiefs got the better end of this deal.
I know what you are thinking: “What do you mean? The man is getting over $40 million a year to play football.”
Yes that is true. However, the NFL’s TV deals are coming due over the next few years.
This is going to be a HUGE payout for the league with new players, such as Netflix, Amazon, and Facebook, expected to hop in the ring and compete with CBS, FOX, and ESPN. These streaming companies have massive markets capitalizations with the cash reserves to go out and make huge splashes in the realm of live sports.
This is going to create huge cash flows for the league as the TV contracts are signed. In turn, this will create an even bigger share that is distributed to the teams which creates larger increases in the salary cap.
Now that everyone is up to speed in “NFL Economics 101” we can get to the point. The chiefs signed their $40 million man while they still could for $40 million.
If they hadn’t locked him up for so long and gave him a contract that expires after the new TV deals are signed, I believe they could have lost him. To give some context here, this is the battle the Cowboys and Dak Prescott are waging now. The Cowboys want to lock their man up long-term right now for $35 million/year.
The price is right for Dak, but not the length. Dak wants to roll the dice and take his $35 mill, but have new, bigger pay day once the new TV deals are signed.
So, this is why I think the Chiefs won this deal. They locked up Mahomes before salaries could skyrocket even more than they have.
The rest of the owners and GMs are sweating.
QB salaries have been on the rise over the last ten years as it seems to have gotten harder and harder to find competent QB play. Much less transcendent QB play.
So this contract for $40 million/year, under the old TV money, is going to be dangerous for top-15 QBs under the new deals. Within the next 15 years, we are going to see QB salaries reach as much as $65 million/year, mark my words. So for the Chiefs to wrap him up now is a big deal. Not to mention the precedent they are setting for future salaries.
With all that said, this is a fantastic marriage.
The Chiefs are poised to be a dynasty over the next 10 years. They have their franchise man locked up with a host of talent around him. Not to mention one of the best offensive minds in the league.
Grab the popcorn and let’s watch the Chiefs degrade and embarrass the league for the next decade.