The NFL season kicks off Thursday night with the defending Super Bowl champion Chiefs hosting the Texans. The game features the NFL's two highest-paid players: Chiefs quarterback Patrick Mahomes and Texans quarterback Deshaun Watson.
Mahomes landed the most lucrative contract in American team sports history in early July when the 2018 NFL MVP signed a 10-year, $450 million contract extension worth up to $500 million with incentives. Him becoming the NFL's highest-paid player was expected, but the enormity of the contract took practically everybody by surprise. Extremely long quarterback deals had fallen out of favor around the league by the middle of the 2000s.
Typically, the later years of lengthy NFL contracts are essentially a series of one-year options where teams can release players when it best suits them, but Mahomes has protections that aren't usually in the later years of deals. A significant amount of Mahomes' compensation in these years is in unsecured March roster bonuses that become fully guaranteed at least one year early. For example, Mahomes' 2027 compensation consists of a $10 million base salary, a $49.4 million third day of the league roster bonuses and a $550,000 workout bonus. The $49.4 million roster bonus becomes fully guaranteed on the third day of the 2026 league year. The base salary and workout bonus are fully guaranteed on the third day of the 2027 league year. The Chiefs would have to buy Mahomes out for $49.4 million to exit his deal in 2027 before the remaining $10.55 million became secure.
Texans quarterback Deshaun Watson opted for a more conventional contract. He signed a four-year, $156 million extension worth a maximum of $160 million through incentives last weekend.
The devil is in the details with NFL contracts since the deals aren't fully guaranteed like in the NBA and MLB. The chart below summarizes the two quarterbacks' contracts and compares the common years of the deals. A direct comparison can be made because the two players were taken two picks apart in the 2017 NFL Draft (Mahomes 10th, Watson 12th).
|Length||10 Years||4 Years|
Notes: (1) New Money and Cash Flow are cumulative amounts; (2) Watson's $1,177,123 fifth day of training camp roster bonus is included in cash flow calculations.
Surprisingly, Mahomes' new money average in the early years of his deal didn't serve as a salary ceiling for Watson. The Texans quarterback is ahead of Mahomes in new money at every juncture of their contracts. Most importantly, Mahomes' new money average after four years is $38.95 million per year, which is $50,000 per year less than Watson's extension averages.
The only time Mahomes tops Watson in cash flow is through the final common year of 2025. The difference really should be more pronounced since the final two years of Mahomes' rookie contract were nearly $7.75 million richer because he was drafted two picks before Watson.
The fact Mahomes doesn't have considerably more than Watson after every year in these two metrics signifies that the Super Bowl LIV MVP's contract is backloaded. Mahomes only has 34.6 percent of his new money through 2025, his fourth new contract year. He would have needed 40 percent or $180 million in what is considered a neutral deal that is neither frontloaded or backloaded.
By taking the shorter deal like all of the highest-paid quarterbacks except Mahomes, Watson is better positioned to maximize his career earnings from his NFL player contracts. Mahomes seems to be trying to find a happy medium between being compensated fairly and allowing the Chiefs to consistently remain Super Bowl contenders with the structure of his contract.
Most likely, the Texans will attempt to extend Watson's deal in 2025 when he is heading into his contract year. Mahomes' new money through the most relevant point of his deal will almost certainly be a monetary benchmark. On another four-year extension in 2025, Watson would need additional $191.1 million to match Mahomes' $347.1 million in new money through 2029. Essentially, a four-year extension averaging $47.75 million per year is the break-even point for Watson with Mahomes' contract after eight new years.
It remains to be seen how much the quarterback market will have grown in five years with the addition of a 17th regular season game and new media rights deals in place. Watson getting to $50 million per year on his next year would be a little more than a 28 percent increase over his newly-signed extension. There were five-year lag times between Packers quarterback Aaron Rodgers and Falcons quarterback Matt Ryan's current contracts and their previous deals. Rodgers got a 52.2 percent raise in average yearly salary with his current deal while Ryan's increased by 44.6 percent. If their deals are any indication of what's going to be store for Watson, $50 million per year could prove to be a conservative estimation.