Patrick Mahomes contract is an outlier in the American sports world and here is another detailed look at the deal, a few days on!
Patrick Mahomes, new deal sent shock waves around the NFL when it was announced yesterday. Its headline number a 10 year $450m dollar extension reads well and resets the market for QB’s so let’s look at it in a bit more detail.
First things first this a great piece of business by the Chiefs it locks up the best QB in football until he is 36 years old. And I would argue should the chiefs hold firm on this deal he will remain on a team-friendly deal for a number of years.
The NFL salary cap for 2020 is $198.2m, this is an increase of $10m from the previous years, in fact over the last 7 years the salary cap has increased by $10m every year. I am going to use that as a baseline projection for predicting the salary cap going forward. However, there are some caveats that I will need to put in place. One we do not know what form the NFL is going to take this year, will fans be absent from the game? or will games be partially attended? or will we get full attendance? so one form of a revenue stream for the NFL will be impacted next year. Two the TV rights deals for the NFL are due to expire in 2021 (ESPN) and 2022 (FOX, CBS, NBC), these rights are incredibly valuable to TV networks, with the streaming age and the diversification of content platforms the only thing that constantly delivers high viewing figures is live sports. The current rights deals pay $4b per year ($1b from Fox and CBS, $950m from NBC and $1.7b from ESPN), and analysts are expecting all packages to double in value as Apple, Amazon and potentially TNT enter the bidding. All this matter as both these revenue streams factor into the Salary cap. Below is the NFL Salary cap going back to 2008, 2014 is when the new TV deal started.
2020 – $198.2 million | 2019 – $188.2 million | 2018 – $177.2 million | 2017 – $167 million | 2016 – $155.7 million | 2015 – $143.28 million | 2014 – $133 million | 2013 – $123 million | 2012 – $120.6 million | 2011 – $120 million | 2010 – Uncapped | 2009 – $123 million | 2008 – $116 million
So again with that preamble lets have some fun with numbers and project the cap hits out for the next 12 years for the Chiefs and see how much of the cap Patrick Mahomes will take up.
Year: 2020 Cap: $198,200,000 Mahomes pay and %: $5,346,538 3% |
Year: 2021 Cap: $208,200,000 Mahomes pay and %: $24,806,905 12% |
Year: 2022 Cap: $218,200,000 Mahomes pay and %: $31,450,000 14% |
Year: 2023 Cap: $228,200,000 Mahomes pay and %: $42,450,000 19% |
Year: 2024 Cap: $238,200,000 Mahomes pay and %: $39,950,000 17% |
Year: 2025 Cap: $248,200,000 Mahomes pay and %: $41,950,000 17% |
Year: 2026 Cap: $258,200,000 Mahomes pay and %: $41,950,000 16% |
Year: 2027 Cap: $268,200,000 Mahomes pay and %: $59,950,000 22% |
Year: 2028 Cap: $278,200,000 Mahomes pay and %: $44,450,000 16% |
Year: 2029 Cap: $288,200,000 Mahomes pay and %: $44,950,000 16% |
Year: 2030 Cap: $298,200,000 Mahomes pay and %: $50,450,000 17% |
Year: 2031 Cap: $308,200,000 Mahomes pay and %: $52,450,000 17% |
The two years that stick out are 2023 and 2027 when he will account for 19% and 22% respectively of the Chiefs overall salary cap. However, 2023 as I outlined above is less of an issue as that will be when the new TV rights deals kick in so I think my conservative $10m salary cap increase will be surpassed. Generally, these TV deals are 7-year terms so Mahomes could see another one come in for the 2030 season so the last two years that cap number could be $20m – $40m higher.
Even if we keep the numbers as they are Mahomes will average around 17% of the Chiefs projected cap over the 10 years of his extension, I think that’s a fair price to pay for a player in his prime and one who has already been named NFL MVP and a Super Bowl MVP. With Deshaun Watson and Dak Prescott still to sign new deals the benchmark has now been set by Mahomes, and both will be wondering if they can top it.