Drastic times sometimes call for drastic measures.
Or in the case of the Kansas City Chiefs, who signed QB Patrick Mahomes to a record-shattering 10-year, $450 million contract extension in July, risky business calls for added protection.
On Wednesday evening, ESPN NFL Insider Field Yates reported that the Chiefs have taken out an insurance policy on their MVP quarterback’s massive deal, an unconventional practice in the world of non-guaranteed NFL contracts.
When you do a record-setting deal, it’s smart business to insure the contract. And the Chiefs have done that with Patrick Mahomes. https://t.co/F7sc5a5hKk
— Field Yates (@FieldYates) September 10, 2020
According to ESPN, the policy offers the organization protection against any potentially significant injury that could keep Mahomes off the field, as well as providing corresponding salary cap credit for missed time.
Mahomes’ Big Guarantee Presents Business Risk
Despite the undeniable talent and enormous upside of the Chiefs’ Super Bowl-winning quarterback, the Mahomes deal presents a unique challenge to a business tied to a league-wide salary cap. With his extension in place, the All-Pro passer is guaranteed approximately $141.4 million over the course of his new deal, over $30 million more than Houston Texans QB Deshaun Watson and Los Angeles Rams QB Jared Goff received on their recent mega-deals.
What’s more, Mahomes is eligible to accumulate up to $503 million in total earnings, thanks to some added playoff and award incentives. Oddly enough though, his $5.3 million cap hit (base salary + bonuses) represents only 2.4 percent of the team’s cap this season.
The 24-year-old is now under contract — the largest in sports history — in Kansas City through the 2031 season.