The Kansas City Chiefs are here, again. Credit Patrick Mahomes, a model of the new sports/business hybrid.
Quarterback Mahomes’ generational skill set, of course, has the most to do with the Chiefs’ recent dominance under coach Andy Reid. But his annual inclination to modify the 10-year, $450-million contract that he signed in 2020 cannot be overlooked.
That combination of game management and money management has helped Chiefs to within a victory of an unprecedented Super Bowl three-peat as they prepare to meet the Philadelphia Eagles in Super Bowl LIX at the Caesars Superdome on Sunday.
MAHOMES COUNTS HIS 4️⃣ SUPER BOWL APPEARANCES 🤷♂️
(via @NFL)
pic.twitter.com/CEolTtCtCR— Bleacher Report (@BleacherReport) January 28, 2024
Chiefs general manager Brett Veach and Mahomes have reworked his contract — the largest in NFL history — four times since was it was signed after his first Super Bowl appearance, a 31-20 victory over the San Francisco 49ers on Feb. 2, 2020. Mahomes won the first the first of his three Super Bowl MVP awards then.
Call it a modern version of the Super Bowl Shuffle.
The maneuver enables them – and other organizations have done the same – to reallocate money due without costing Mahomes a penny, and it freed salary cap space to help the Chiefs retain their edge through the yearly remodeling process that championship teams must wade through. (More on that later.)
The 2024 Season, A Prime Example
The Chiefs faced a money crunch in the offseason after they signed Pro Bowl defensive lineman Chris Jones to a five-year, $158.7 million pending free agent contract extension and placed the franchise tag on cornerback L’Jarius Sneed, although that expense went away when he was traded to Tennessee.
Chris Jones contract is a 5 year $160 Million with $95 Million guaranteed.
Chris Jones is a Chief for life. pic.twitter.com/E4B7Il8kjO
— BBQ Chiefs (@BBQChiefs) March 10, 2024
Enter Mahomes. Jones signed on March 9, and a within a matter of days it was reported that the Chiefs and Mahomes had converted $27 million of his 2024 compensation from salary to a signing bonus, which enabled the Chiefs to shave more than $21 million off their salary cap number.
As it played out, Mahomes received a $34.9 million roster bonus on May 5, 2024, and the resultant salary cap re-calculation brought his cap hit down from $58.6 million to $37 million.
The Chiefs used the extra resources to re-sign starting linebacker Drue Tranquill and all three of Jones’ defensive linemates, Michael Danna, Tershawn Wharton and Derrick Nando. They also free agents wide receiver Marquise “Hollywood” Brown and backup quarterback Carson Wentz. Total outlay for those six: right at $21 million
Drue Tranquill in coverage against the Broncos:
• 20 coverage snaps
• Allowed 1 reception for 4 yards on one target. pic.twitter.com/Bj2yUKYmKs— Chiefs Hive (@chiefshive) November 13, 2024
When lengthy injuries to Brown and running back Isaiah Pacheco created holes in Reid’s offense, the Chiefs had the wherewithal to acquire veterans Kareem Hunt and De’Andre Hopkins to plug the gaps.
“There isn’t much of a recruiting pitch that needs to be made with Kansas City,” Tranquill said when he signed his new deal in March.“You have incredible leadership, top to bottom.
“You have a culture that’s a winning culture, that is not about egos or self or guys getting paid. We all want our guys to get paid, but everything at the Chiefs and in our organization is about winning, and it’s about hoisting the Lombardi Trophy at the end of the season.”
Following the Salary Cap Rules
The collective bargaining agreement between the NFL and its players mandates revenue-sharing between the sides, a figure that usually skews slightly to the owners’ side. Players got 48 percent a year ago.
The league resets salary cap in mid-March each season, which for its purposes is the beginning of the new year. The cap limits the money each team can spend on its players, and the 2024 cap number was $255.4 million.
While it is considered a “hard” cap, meaning teams are prohibited from exceeding that figure, there are several legal ways to get around it. Primary among them is contract restructuring, because of the way a signing bonus is calculated.
The teams with the most salary cap space 💰
Full article: https://t.co/uP19Jt80dp pic.twitter.com/3sgJINoYts
— PFF (@PFF) January 22, 2025
Players normally receive a signing bonus immediately, but the team can prorate that bonus for the life or the contact or up to five seasons. It works the same with salary. Teams can convert a base salary into a signing bonus, enabling them again to spread out the payments.
Jones is following a similar model to Mahomes this season. Jones received $60 million of the guaranteed of $95 million in his new five-year deal when he signed in March, but because he received $30 millions a bonus, his cap hit is only $7.35 million this season.
