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Patrick Mahomes new contract is a wake-up call to the Steelers: Parameters

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In the first part of the series, we’ll take a look at the basic structure of Mahomes contract and what the Steelers can learn from it.

Kansas City Chiefs v Pittsburgh Steelers Photo by Joe Sargent/Getty Images

Kansas City Chiefs quarterback, Patrick Mahomes, signed the largest contract in sports history on Monday. News of the deal started trickling out with the usual unsubstantiated and incorrect information that his massive contract was somehow tied to the salary cap. (Not sure if this is even a legit practice yet.) Then numbers of $400 million, $450 million, $477 million and finally the reported number of $503 million (max value) came out. Anyone who has followed my cap articles or others who break down contracts knows that there are twists and turns in contracts and that the $503 million is not guaranteed. What makes this contract unique and forward thinking on both sides — the structure of the contract. This is where I wish the Pittsburgh Steelers would get more creative and come out of the stone ages. I really believe how the team handles contracts have cost us valuable free agents while losing others to free agency.

Basic contract structure

10 year extension: Why is this important? Mahomes had two years left on his current contract, which was left untouched except $2 prorated signing bonus money added per year. This gives the Chiefs flexibility and a cheap quarterback while the NFL deals with the uncertain financial times.

New signing bonus money: The extension included $10 million in signing bonus money. Nope, not a typo. In the day and age of players demanding more and more guaranteed money, the signing bonus has been the prime vehicle in which guaranteed money is assured. Seattle Seahawks Russell Wilson landed a four-year extension which gave him a $65 million signing bonus for comparison. Just keep in mind signing bonus money can only be prorated out over the first five years — this includes the two years before the extension starts.

Per year average: The figure I will use is $45 million per season, but you can pull that amount down if you want to calculate the two years remaining before the extension starts. The figure beats Wilson’s newly minted contract by $10 million per season, but is still the largest contract in NFL history.

Guaranteed money at signing: Do not fall for false terms that are not indicative of guaranteed money. Rolling guarantees are not fully guaranteed money. The reigning Super Bowl champ’s deal fully guarantees him $63 million at signing. Only? His fully guaranteed portion is over $31 million less than league leader Matt Ryan and ranks fifth behind Ryan, Aaron Rodgers, Wilson, and Carson Wentz. If the Chiefs cut Mahomes at any time between now and the third day of the league year in 2021, that is all they would owe him as long as it was not injury related.

Injury guarantees: $141 million at signing. If he were to sustain a career ending injury before mid-March 2021, that is all they would pay him.

Rolling guarantees (Guaranteed mechanisms): New terms being bandied about this year. Let me start out applauding whoever made up these phrases. The term was made up to fool people into thinking there is more guaranteed money in a contract than what there really is. Rolling guarantees work when a player is on a team’s roster at a certain date — future money in his contract becomes fully guaranteed.

Incentives: Mahomes is eligible to earn $1.25 million per year, on the new contract if he wins the league MVP and another $1.25 million if he wins the AFC Championship Game — both of which he already has under his belt.

No-trade clause: With no guaranteed money after five years, trading Mahomes would be very easy. If things get rocky between the two sides, Mahomes could always waive the clause and choose where he would want to be dealt.

This is just the parameters of the contract and not the meat of it. The meat of the deal will come in the second part of this three-part series.

I knock Colbert and company for not getting with the times on contracts, but I agree with how they handle 95% of them. When T.J. Watt, Minkah Fitzpatrick, or others start entering contract extension talks, I believe the Steelers have to change with the times and look at the structure of the Mahomes contract as a possible blueprint to satisfy their lofty contract demands. I am not meaning the length, but the myriad of caveats that will make up the deal.