How the Chiefs worked the salary cap to keep their best players

Doug Farrar
·7 min read

When the Kansas City Chiefs walked out of Miami’s Hard Rock Stadium holding the Lombardi Trophy on February 2nd, they knew there was work to be done in the immediate future. Yes, the franchise had won its first Super Bowl in 50 years, but head coach Andy Reid and general manager Brett Veach aren’t just looking at this as a one-year wonder — they believe they may be in possession of the NFL’s next dynasty.

And with Patrick Mahomes at quarterback, they may be right. However, for that to happen, there were important players to be re-signed, and not a ton to work with at the time. There was Mahomes’ long-term future. There was tight end Travis Kelce, who was set to become a free agent after the 2021 season. And there was defensive lineman Chris Jones, who played at an MVP level in the Super Bowl, has established himself as one of the best players at his position(s) in the league, and was set to become a free agent before the Chiefs gave him the franchise tag.

And there wasn’t a lot in the wallet. As Kevin Clark of The Ringer astutely put it:

The new league year set a salary cap of $198.2 million, which gave the Chiefs and every other team a base paradigm. Then, it was about getting things done.

Having Mahomes on his rookie deal was an advantage as it would be for any NFL team, but the Chiefs also knew that as goes Mahomes, so goes the potential dynasty. So, the first thing Veach did was to work a new deal for Mahomes that ostensibly keeps him in Kansas City through 2031. Mahomes carries a 2020 cap hit of just $5,346,538, per OverTheCap.com, and while things start to rise up precipitously after that as part of the contract, the deal is more team-friendly than one might assume for a 10-year, $503 million deal on its face.

The interesting aspect of the deal, per the numbers Pelissero presented, is that the first five years of the deal are pretty much guaranteed except for injury (there’s a $140 million injury guarantee built into the contract), and then, the cash and cap hits take a real uptick.

As Pelissero also points out, the structure of the rolling guarantees have the salaries and bonuses vesting before they’re due.

To say that Mahomes “has outs” if guarantee mechanisms aren’t exercised, as the Steinberg tweet does, may simply mean that starting in 2027, the Chiefs could find it prohibitive to pay the rolling bonuses from a cash and cap perspective. They could encourage Mahomes to renegotiate, or, per that possible language, Mahomes could become a free agent. There is a no-trade clause in the contract; it is not known whether there are prohibitions from placing the franchise tag on Mahomes in any year that it may be a little too beneficial on the team end.

In any event, the next step was to get Jones under contract. The defensive lineman was set to make $16.126 million on a one-year tag, and since that number is fully guaranteed, the cap hit would have been the same. Instead, the Chiefs re-upped Jones with a four-year, $80 million deal with $37.626 million in full guarantees, and a $60 million injury guarantee. With that deal, Jones dropped his 2020 cap hit from $16.126 million to $15,001 million. Not a huge savings, but getting your best defensive player not named Tyrann Mathieu happy and under contract is a Good Thing.

In winning the Super Bowl, and making it clear that the intention is to have the infrastructure to win more, the Chiefs also opened themselves up to what one might call the “Patriots Discount,” the unique phenomenon Bill Belichick’s team has enjoyed over the last two decades. Multiple players took less money to play for the Patriots than they would have to join other rosters because they knew there was a better chance they would be utilized correctly, their Super Bowl window was bigger, and thus, their overall value would increase.

Receiver Sammy Watkins, who was set to carry a salary cap charge of $21 million in 2020, restructured his contract to save $5 million in cap space, which gave the team the wherewithal to sign its draft class with no additional cap burden.

Watkins seemed excited at the prospect.

With a great season, and perhaps another Super Bowl win, Watkins can enter free agency next year at age 27, with the world as his proverbial oyster.

Then, it was time to do something nice for tight end Travis Kelce, which the Chiefs did on the same day the 49ers re-set the market at that position by giving George Kittle a five-year, $75 million deal. Kelce’s extension adds four years and $57.25 million to his contract, though there’s no new money in 2020.

If that’s the case, Kelce’s 2020 cap hit of $11,218,400 is just as manageable as it was before. And it’s always a good idea to make your half-billion-dollar quarterback happy.

Thus, the Chiefs turned $177 in March into a remaining cap space of $13,921,310 in August. From the cost of a half-decent dinner for two to the scratch needed to sign one’s draft picks, and a bit of flexibility beyond? It’s entirely possible that Veach, Reid, and the cap geniuses in Kansas City’s front office have done what they need to do to create that dynasty.

Of course, what happens with the 2020 season, and the estimated salary cap shortfalls in 2021 as a result of a COVID-related revenue hit? Weightier matters entirely, and the Chiefs could be in a major hole if the 2021 cap comes in at around $175 million, as anticipated. At that point, all involved will have to have an even sharper contractual eye. But for now, Chiefs fans should be eminently confident in the team’s shot-callers. That confidence has been earned.