Well it wasn’t a rip it up and start over like some thought it might be, but the Kansas City Chiefs and Patrick Mahomes agreed to a large contract modification this past weekend, pulling a significant amount of future cash into the next 4 seasons. Our extremely number-filled look at how this new contract shakes out.
Year by Year Contract Breakdowns
One prorated week of his original $5.5M base salary pay + 17 weeks of an updated $1.08M base salary now calculates to a $1.325M total base salary for 2023. There’s a $20.574M signing bonus (half paid this year, half paid next year), and previously vested payments of $22.4M (March roster bonus), $550,000 (workout bonus), & $12M (salary to signing bonus conversion from his original base salary). In total it’s $56.85M of base compensation to be earned this year, against a $37.1M cap hit.
The $8.6M base salary is fully guaranteed at signing, $34.9M roster bonus fully guaranteed 9/20/2023, $1M workout bonus fully guarantees 09/20/2023. The latter bonuses guarantee 3 days of the contract execution to stop them being treated as a signing bonus. But for practical purposes, they’re considered guaranteed at signing. In total, it’s $44.5M of base compensation to be earned this year, against a $57.3M cap hit.
The $16.65M base salary injury guaranteed at signing, fully guarantees the 3rd league day of 2025, while a $32.35M roster bonus fully guarantees 9/20/2023 (to be paid out 5/5/2025). His $1M workout bonus fully guarantees the 3rd league day of 2025 (injury guaranteed at signing). In total it’s $50M of base compensation to be earned this year, against a $60.85M cap hit.
The $45.35M base salary injury guaranteed at signing, fully guarantees the 3rd league day of 2026, while a $10.4M injury guaranteed roster bonus (paid May 5, 2026), fully guarantees the 3rd league day of 2025. A $1M workout bonus, injury guaranteed at signing, fully guarantees the 3rd league day of 2026
A $45.8M base salary fully guarantees the 3rd league day of 2027, while a $6.1M roster bonus (paid out May 5th, 2027) fully guarantees the 3rd league day of 2026. His $1M workout bonus fully guarantees the 3rd league day of 2027
A $17.975M base salary fully guarantees the 3rd league day of 2028, while a $8.2M roster bonus (paid out May 5, 2028), fully guarantees the 3rd league day of 2027. His $1M workout bonus fully guarantees the 3rd league day of 2028
A $8M base salary fully guarantees the 3rd league day of 2029 while a $25.975M roster bonus (paid out May 5, 2029), fully guarantees the 3rd league day of 2028. His $1M workout bonus fully guarantees the 3rd league day of 2029
A $30.625M base salary fully guarantees the 3rd league day of 2030, while a $13.9M roster bonus (paid out May 5th, 2030), fully guarantees the 3rd league day of 2029. His $1M workout bonus fully guarantees the 3rd league day of 2030.
A $37.55M base salary fully guarantees the 3rd league day of 2031, while a $9.825M roster bonus (paid out May 5th, 2031), fully guarantees the 3rd league day of 2030. His $1M workout bonus fully guarantees the 3rd league day of 2031
New Bonus Dates
One of the bigger changes in this contract modification is the timing of the annual roster bonus payment. For the last 3 offseasons, Mahomes’ gigantic roster bonuses have been due a few days after the start of the league year in early March, putting pressure on the Chiefs to decide on if they are willing to take on the bonus as a 1 time cap hit, or convert the figure to a signing bonus, thus spread out the cap for 5 seasons.
Now, all roster bonuses are paid out May 5th of that respective year, giving the Chiefs time to get through the bulk of free agency AND the draft before they have to make a decision on how to treat these figures.
This does not affect the guarantee vesting for these bonuses however. The 2024-2025 roster bonuses will become fully guaranteed this week. While each roster bonus thereafter (2026-2031) will become fully guaranteed an entire March early (14 months before payment).
Updated Bonus Escalators
Originally, Mahomes’ contract carried $2.5M of annual bonuses. He earned all $2.5M last year by winning league MVP & another Super Bowl, so prior to this restructure they were considered likely to be earned for 2023. By converting these to next-year-escalators, that $2.5M can be removed from the 2023 salary cap (by way of a later adjustment).
When these are earned, they are immediately applied to the following year’s base salary.
$1.25M for NFL MVP + Conference Championship Appearance
$1.25M for a Super Bowl Win + 50% of Super Bowl snaps or 50% of regular season snaps
The Cash Increase
Without going into too much detail here (again staying within this 4-year window for practical purposes), Mahomes added $43.3M cash to his pocket from 2023-2026, including an additional $13.9M this season. That doesn’t of course include any escalators that may be factored in.
Total Cash Allocations
This monster restructure actually frees up $2.559M of cap space for the Chiefs in 2023, however - unlike most NFL contract modifications, the purpose of this maneuver is not about opening up cap space for the team. This was about front-loading their QB1 more money. End of sentence.
Patrick Mahomes’ New Cap Numbers
The first thing that comes to mind is, was it really necessary to sign a 10 year, $450M extension in the first place? Not every player is going to garner the cache that Mahomes has - and not every organization is going to be willing to play ball as much as the Chiefs did here (even if it really is just an extra $44Mish over the next 4 seasons when it comes right down to it).
The majority of QB extensions of late still look 1-2 years too long. Only Dak Prescott and Lamar Jackson have really put significant pressure on their organizations from a cash, cap, AND term perspective, while most others have spread things out into the 7-8 year total contract range.
This restructure certainly screams “4 and done”, with a clear and concise out after the 2026 season in terms of cash, cap, and structure. But it isn’t required that the Chiefs do so. The ugly truth is that Kansas City will still hold 5 more years of contract term after 2026. Will Mahomes still be powerful enough to get what he wants at age 31 after the 2026 season? Almost certainly yes.
But if that’s to be believed (and for all intents it should), then why keep the last 5 years on the books at all? Patrick Mahomes is arguably the most powerful player in the history of the NFL, as proven by his original extension, and his ability to ask and receive a monumental restructure just a few years after signing it. Why not take the new cash AND make 2027 a potential free agency offseason. Not only does it serve the player well, but it also puts the onus on the Chiefs to continue to build a contender, with risk that their QB1 might opt-out and leave town in a few seasons.
With that said, this contract modification was a win for both sides, especially as it pertains to the Chiefs - who didn’t need to do this - but also made this a smooth and drama-free process from A-Z. Easier said than done in the current landscape.