Bargain price: Patrick Mahomes' contract is already a good deal, soon to be a great one

Examining how Mahomes' historic extension has already become good market value and is projected to be even better with each year that goes by.

Since QB contracts keep coming into the news cycle, this article from last offseason swings back into relevancy every few months. So I unlocked it. If you want to subscribe for 12 bucks a year and get access to (gestures at the archives and multiple weekly articles), click the link below.

When Patrick Mahomes signed a 10-year, nearly half-a-billion dollar extension in the months prior to the 2020 season, it was met with collective jaw-dropping and stunned gasps (I like to imagine people clutched pearls, but that’s of course speculation).

It wasn’t so much the fact that Mahomes received a massive extension, or that it was the most money anyone had ever heard of for an NFL quarterback. Both of those things were expected given Mahomes’ unprecedented first several years in the league.

No, it was the structure and length of the contract (which, by their nature, led to the eye-catching “half a billion dollars” line that people hung onto) that caused such a commotion. Look at the size of this thing (thanks to Spotrac, an essential in breaking down cap information).

That’s… a lot. A lot of information. A lot of structure. A lot of zeros. And most interestingly, a LOT of time.

By signing a 10-year extension, Mahomes locked himself in with the Chiefs for 12 total seasons. This is one of the things that made this contract a unicorn. In the NFL, most “elite player” contracts are 5 years, with the final year or even 2 years being essentially fake money after the guarantees have started to dry up. For quarterbacks, the rules are a little different, with more money being guaranteed. However, the shorter duration of deals is still the general rule, even with contracts signed since Mahomes’ record-breaking deal.

And that side of things (contract duration) is going to be crucial in the coming years. The reason is that NFL contracts are ever-growing in a shifting landscape of a rising salary cap. And Mahomes’ deal, unthinkably large on a per-year basis, is already (just two years later) essentially a “market value” deal and on its way to being something significantly better.

Let’s talk about Mahomes’ contract, and the general trend of quarterback deals, and how the combination of those two things could affect the Chiefs for years to come. Since we’re talking numbers a lot, I’ll throw in a few reminders that Patrick Mahomes is a “there is no spoon” quarterback.

Having a quarterback like this is already an inherent advantage. Having one under contract until 2032? Well, that’s an even greater one.

In order to understand how all this plays out, let’s first talk about how because of the way his contract extension was designed, Mahomes came at a bargain price in both 2020 and 2021, where his cap hit was a mere $5.3 million and $7.4 million dollars, respectively. For frame of reference, here are the top QB cap hits for 2021.

These numbers are going to be important moving forward, but it’s worth noting that Mahomes’ deal, in part because of its length, allowed the Chiefs to stay flexible in the salary cap for a full two seasons before the “big money” started to kick in with regards to salary cap hit. And make no mistake, cap hit is what matters when it comes to affecting team competitiveness (rather than total salary, etc). While the salary cap is incredibly flexible and can be manipulated to make almost any single deal work, it’s still real in the sense that it creates a limit (you know, a cap) in what total money can be expended. Otherwise, Tyreek Hill would (maybe) still be a Chief.

And so Mahomes’ deal, by being very low-end its first two years, helped extend the Chiefs’ best Super Bowl window. Of course, now we’re moving into 2022 with the larger cap hits starting to come through. While it’s well-known at this point the Chiefs have “guarantee mechanisms” (essentially the ability to alter the designation of Mahomes’ yearly bonuses to spread out their cap hit) they can use if they want to lower his cap hit any given year, they chose not to do so this season and so the larger cap hit has finally arrived. Here’s the 2022 list of QB cap hits:

In 2022, Mahomes goes from not even being in the top 10 in quarterback salary cap hits to being 2nd in the league, with his number substantially ahead of the number 3 player (Kirk Cousins, who has played the contract game as well as anyone throughout his career). Obviously that lowers Kansas City’s strategic advantage a great deal in terms of cap hit vs QB play.

However, something interesting happens when you start to move forward past 2022. In 2023, Mahomes falls to 3rd on the list (behind Deshaun Watson and Dak Prescott). In 2024, he’s 4th behind Matt Stafford. Also, take a look at what is happening to average cap hits in the top 7 at this point. Notice anything about what is happening to those numbers?

We’ll circle back to this, but as we continue to 2025, Mahomes drops to 5th on the list of quarterback cap hits for players already under contract. That’s where he stays when we jump to 2026, where the numbers continue to grow throughout the remaining quarterbacks on contract.

As you can see, we’ve now moved past all but 5 quarterback contracts (the rest are just dead cap hits that are already on the books for teams) when we get to 2026, 4 years in the future. And here’s where I want to talk about a couple of very interesting points, right after we watch Mahomes play point guard as a quarterback.

The first is that, when you get to the quarterbacks who remain on the books in 2026, Mahomes has the lowest cap hit for that season by a fairly sizable mark. How could that be? Well, a big part of it is the fact that Allen, Stafford, Rodgers, and Watson all signed their contracts after Mahomes’ extension was put in the books, as well as many of them are starting to reach the latter stages of their contracts.

And this is where the way the NFL contract world (and the salary cap) works comes into play, and why having Mahomes under such a long-term deal provides such an advantage down the road. The short story; NFL contracts are always, always, ALWAYS getting bigger. Every new elite player (or even top 5 player at their position) who hits free agency gets a record-setting deal with very few exceptions. And again, that’s because the salary cap is always climbing (barring a year ruined by Covid). For example, per Spotrac, the cap climbed from about $120 million in 2011 to a shade over $208 million in 2022. That’s nearly $90 million in difference.

Players know that, and so do agents. And so each time a new contract comes out it involves the most money ever because… well, there’s the most money ever to spend. Percentage of the salary cap is a much better way to calculate cap, and the best way to determine the “value” of a deal is to compare it to other relevant deals.

And here’s where we get to the largest overall point. Lets look at the average “top 8” cap hit for quarterbacks over the last few seasons and the next few (projected) seasons by millions:

2020- 26.84

2021- 26.86

2022- 30.59

2023- 41.73

2024- 44.86

2025- 50.92 (top 6 due to limited number of deals)

Look at what is happening to the average QB numbers. For frame of reference, no quarterback has a $50 million cap hit in 2022 or before. Three years later that becomes the AVERAGE of the top 6 deals.

Now think about this… Lamar Jackson, Kyler Murray, Justin Herbert, Joe Burrow, Dak Prescott (whose deal runs through 2024), and Kirk Cousins (AGAIN!) are all certainties to land new contracts prior to the 2025 season actually begins barring something crazy happening. While it’s hard to say what will happen with Cousins and maybe Murray, it’s a certainty that the rest are going to get absolute fortunes that will further push the quarterback market up.

The crazy thing is that the mega-deals that have recently been signed since Mahomes’ contract extension (Allen, Watson, Rodgers, Stafford) that have pushed up the market are all going to expire prior to Mahomes’ deal, which doesn’t end on paper until after the 2031 season. For frame of reference, the only other quarterbacks signed through 2028 (three full seasons earlier) is Josh Allen.

With all of these quarterbacks looking to continually reset the market, it’s hard to believe it will necessarily slow down any time soon at the very top end. And given that it rose by $24.08 million from 2020 through 2025 (as of now), it’s perfectly reasonable to believe it will continue to grow at a similar pace.

So how does that relate to Mahomes?

Well, it’s simple. If you average out Mahomes cap hit moving forward in his contract, you come to a per-year number of $46.74 million in cap hit per season.

Yes, that’s a big number, but as we’ve seen over the course of this article, that number actually places Mahomes at around the average for the top 8 QB contracts in 2024, and several million dollars BELOW the top 6 QB contracts in 2025. In other words, Mahomes’ contract is set to be below his market value in just 3 years. Outside of an outlier 2027 season, it is set to be below market value every single year after that as well. And that’s without factoring in the inevitable continued growth that the QB market has seen.

Here’s an example… At the rate things are going, the top 8 quarterback cap hits could well average to something like $65 million or more per year by 2028. And that’s just the average, not the very top deals In the meantime, Mahomes remains on the books for around $44 million that year and the next.

In other words, Mahomes’ deal, by being as long as it is, allows for him to go from market value now to well below market value for multiple years. That’s in addition to the rolling guarantees that allow the Chiefs to convert his roster bonus into a signing bonus (and spread out the hit over the course of 5 seasons) any year they decide they need extra cap space to go all-in on a few big signings. And THAT’S in addition to the guaranteed money not being crippling for the team in a worst-case-scenario (injury, etc).

A long road to a short thought is that Patrick Mahomes’ deal, while massive and unprecedented on its face, is actually already a good value for the Chiefs just a few years in, and on its way to being a great one. Just another way in which Mahomes is helping them compete in the short and long term.