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When Patrick Mahomes signed his record-shattering 10-year, $405 million extension with the Kansas City Chiefs in 2020, it sent shockwaves across the NFL. It was the richest deal in sports history, and still is. It made Mahomes the highest-paid quarterback in NFL history as well, but in just a few years, Mahomes is no longer even in the top 10 in terms of the annual average value of the contract. So… was the contract a mistake?

Quite the opposite. Mahomes’ deal might be one of the smartest ever signed in the NFL – for both the player and the team.

Why Patrick Mahomes’ Contract Was a Genius Move

While the $450 million headline grabbed attention, the absolute brilliance lies in the structure. The contract includes guarantee mechanisms, not fully guaranteed money – a crucial distinction. Only about $63 million was truly guaranteed at signing. The rest becomes guaranteed gradually, year by year, if Mahomes remains on the roster at the start of each league year.

This rolling guarantee approach minimizes the Chiefs’ upfront financial risk and reduces the amount of money the team must place in escrow, unlike the Cleveland Browns, who had to set aside $185 million in cash when they guaranteed Deshaun Watson’s contract.

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Instead of backing up the Brinks truck all at once, Kansas City effectively turned Mahomes’ mega-deal into a year-by-year commitment with a manageable payout schedule. That financial flexibility matters, especially in a hard cap league.

How Patrick Mahomes’ Contract Helps the Chiefs Win Every Year

Beyond the creative guarantee structure, the Mahomes contract is packed with roster bonuses that are easily convertible into signing bonuses. Why does that matter? Because converting roster bonuses into signing bonuses allows the team to spread the cap hit over five years, a maneuver Kansas City has used multiple times to stay competitive.

Enjoy these 2018 Patrick Mahomes highlights! pic.twitter.com/9BTkTqrkXc https://t.co/BxNAIVzZpP

— Jacob ✍🏼 (@HitStickHicks) November 10, 2023

Since signing the deal, the Chiefs have restructured Mahomes’ contract in 2021, 2023, 2024, and 2025 to create cap space.

• In 2021, a simple restructuring created $17 million, which helped overhaul the offensive line.
• In 2023, the Chiefs boosted Mahomes’ pay to $59.35 million (the second-highest in the league) but still managed to restructure.
• In 2024, they freed up $21.6 million, a critical move to re-sign star pass rusher Chris Jones.
• In 2025, Mahomes and Jones again restructured their deals to save $49 million in total cap space.

The genius? Kansas City still has up to five more years to spread out future restructures from Mahomes’ deal. That gives GM Brett Veach a unique financial lever most teams don’t have. In practical terms, Mahomes’ contract is a flexible loan machine – whenever the Chiefs need cap space, they can unlock it.

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Of course, there’s a limit. Restructuring every year would push massive cap hits into Mahomes’ mid-30s, which could become a problem. However, the ability to pick and choose when to restructure, while keeping their MVP happy and highly paid, is an almost unfair competitive advantage.

In a league where windows close fast, Mahomes’ deal might be the reason Kansas City’s stays open indefinitely.