Kansas City Chiefs quarterback Patrick Mahomes signed the most lucrative deal that American sports has ever seen earlier this month, a 10-year extension that's worth up to $503 million. CBS Sports NFL writer Jeff Kerr caught up with Mahomes for an exclusive interview on his thoughts post-contract, but how did the deal come to fruition? Chris Cabott, President and Chief Operating Officer of Steinberg Sports & Entertainment, pulled back the curtains on how the historic deal came together.
"If you study the relationship, obviously Leigh [Steinberg] and Lamar Hunt, Clark's father, were close. [Steinberg] has known [Chiefs owner] Clark [Hunt] since he was a ball boy," Cabott explained to CBS Sports. "If you go all the way back to our Super Bowl party [in 2017], that's where they met Patrick for the first time.
"My friendship and relationship with Brett [Veach], the GM, is pretty well-documented. So, obviously we're all very strong believers in Patrick, hence the trade and everything that happened there as a rookie. So, in this deal, I mean we see each other almost every week at games; always kind of talking and exchanging notes. After the 2018 MVP season and coming within a penalty of the Super Bowl, it was pretty clear that a potential extension would be a scenario. So from January 2019 and on, we would meet once a month and were really trying to spend a lot of time together. At this level of a deal, you really to take a lot of time."
'There's so much that goes into it'
Some of those conversations would take place on the sidelines prior to Chiefs games last fall but most occurred over the phone rather than some mysterious backroom. Mahomes' representation was detailed in their evaluation of Kansas City's roster and salary cap.
"For us, it was learning the cap from the Chiefs' perspective," Cabott said. "It was learning the roster from the Chiefs' perspective and charting that out until the end of the contract. Through last season, the longest contract on the Chiefs' salary cap was kicker Harrison Butker. Talking with Patrick a lot and getting his feedback and getting his thoughts and just being really, really prepared. When you have something of this magnitude you have so many different scenarios, models, ideas, concepts. There's so much that goes into it. Obviously every time there's a transaction throughout free agency we update the cap, double-check the numbers everything like that, the draft, everything. We were really well prepared when the veil lifted there in the middle of June, we were ready to dig in, mutually, both sides."
At the time of the deal, Angels' outfielder Mike Trout had the largest contract of any American sports figure at $426.5 million over 12 years. How does an agent construct a deal that has little to no precedent?
"[Steinberg] talks about starting with the end goal in mind," Cabott said. "In this scenario, there were a number of things that were important, but obviously guarantees and amounts were two of them. It became clear that with the NFL's funding requirements and their restrictions, which you don't have in basketball and baseball, the only way to get there was adding years to the contract with roster bonuses that vest years in advance. Those would become the famous guaranteed mechanisms. That was starting at the desired goal and working backward and that has always been one of Leigh's principles if you look back over the years with Steve Young. He had the highest contract in sports at one time."
Young signed a five-year deal worth $26.5 million to remain with the 49ers in 1993.
A major obstacle arises
Communication intensified in January, but an obstacle that no one would see coming arose in February: the coronavirus.
"The Chiefs were definitely interested in getting Patrick under contract; we were definitely interested in extending him," Cabott said. "Coronavirus was an uncertainty. I think when you have uncertainty, on a roster, you try to manage what is certain. So if you look at the Titans with Derrick Henry and everything that went on there with [Ryan] Tannehill, you want to bring back what has worked.
"You want to bring back what has worked well, and have certainty during uncertain times. The Chiefs knew that there could be some potential cap decrease, obviously, we just saw today that 2021 is going to be at least $175 [million]. For the first time in years to come, we could have a flat cap for a number of years. With that being said, we started looking at different scenarios.
"There were numerous models that we had; every model that you could imagine from stuff tied to the cap to option bonuses to different signing bonus structures. They all kind of went into three categories. The first category was do nothing; literally, ride this out, ride out the tags. Door number two was shape history on a short-term basis. Door number three was shape history on a long-term basis."
Outpacing the market
Both parties exchanged short-term and long-term models before settling on the final product.
"On the scenario of doing nothing, when you start to go through it, there was not ample protection and insurance would not have provided the injury guarantees that he was able to receive in an extension," Cabott said. "So, when we start to look at the middle ground there, shaping history on a short-term basis, if we are going to do that, you want it to be fully guaranteed across the board. But with the NFL funding requirement, teams have to write a check for the fully guaranteed money to the league. It really prevents fully guaranteed money at market shattering amounts. The presumption is that we're going to be at $40 [million] a year, and that might have been guaranteed, but we didn't want to be in a situation where he was getting leapfrogged in a couple of years.
"The more we dug into it. A long-term deal where we could have basketball concepts with outs and baseball concepts with no trades became more appealing. We could essentially have a scenario where the highest paid quarterback went from $35 [million] to $45 [million]. We have never seen a jump like that before. If you look at the final contract, it is essentially two five-year extensions on top of each other; one was at $40 [million] per year average and the next at $50 [million] per year average. So we were outpacing the market. Then, we started getting into the guarantees and we figured out a way to essentially get a full guaranteed contract. Ultimately, that is where the $477 [million] in guarantees came from what we started with, via the mechanisms, where the roster bonuses would vest and become guaranteed years in advance.
"You know he's not going to get cut for skill. But, by the time that he would get through $141 [million in injury guarantees], he's already unlocked another series of future full guarantees. By the time we get through that series of guarantees, he has already unlocked a bunch more. So, if for whatever reason, they decide we're going to let him go because there's so much on the cap then they would suffer dead cap and they would essentially be paying him to leave and then he could go do another blockbuster deal somewhere else. It just makes so much sense. It is a really great deal. It is a really revolutionary deal. The thing I love about it too, I think we created a template for quarterbacks to really be able to get guarantees late in their future deals. I'm interested in seeing what happens with Lamar Jackson and whether the Ravens want to commit that much to him. Seeing Mookie Betts' deal yesterday, there's an amazing baseball player and he's on a 13-year extension and it is much less than Patrick's. I think pro football having the largest contract in pro sports makes them a big winner in this deal."
Guaranteed money the key
At the end of the day, the total guaranteed money over a 10-year period was too enticing to ignore.
"When we started to realize that we can essentially have a fully guaranteed deal via the mechanisms, and that was extremely lucrative, we obviously kept negotiating up and up and up," Cabott said. "Certainly didn't leave any pennies on the table. When we started to compare the career earnings, what became apparent was that Patrick playing through this contract, would have more career earnings than Alex Rodriguez, LeBron James and Mike Trout, who all would have played more years than Patrick. So he is outpacing career earnings by every sport. He was outpacing every athlete in every sport tremendously when you look at career earnings on an annual basis as well. At that point, we started to realize the longer-term deal was really the best scenario; certainly, ended up being record-breaking that way across the board in all sports."
When parameters of a deal were researched, it was done with upcoming quarterback contracts in mind.
"It's interesting because when we did this deal, we looked at the potential forthcoming quarterback contracts," Cabott said. "When you looked at them, there are a number of guys that could potentially be getting an extension coming up but they do not have Patrick's resume with MVP, missing the Super Bowl by one penalty and then winning a Super Bowl. His resume is pretty tough to compete with. I think that is the one thing that folks may not realize here is that the Chiefs have committed $477 million in guarantees to Patrick Mahomes. They could pay another $25 million on top of that. No one else has ever come close to that."
Watching it all happen
When the contract was metaphorically on the 1-yard line, the franchise sent some runners to a local liquor store to pick up some celebratory champagne. The purpose of their mission was sniffed out by a clerk, who posted it on social media. A local radio station picked up on the story before it made its way into the national news.
Mahomes and Cabott were together watching it all unfold.
"We're watching it on TV at Patrick's house," Cabott said. "We are watching people talk about it and we are still not done with the deal. We still had some language to massage out with the union. We are watching people talk about it and I remember people saying 'we are not going to be impressed unless it is over $400 million.' We were smiling because it is over $500 [million]."
The fact that the deal was not yet complete may have had something to do with the slow rate at which financial details began to leak out to the media.
Shortly after the deal's completion, there was a text exchange between defensive lineman Chris Jones and Mahomes circulating through social media indicating that the latter may have taken less money to aid his teammate's contract objectives. Despite a deal coming together for Jones shortly thereafter, Cabott assured that the Chiefs offered his client top dollar.
"There was not any money left on the table. I think the Chiefs would tell you that," Cabott said. "I do not think there was any penny left unturned. Here's what I can say to you: we had so many different models that we looked at but, in one scenario -- their cap is extremely tight -- but we looked at enhancing the signing bonus. In order to do that, we would have had to cut a player. When you go down their roster, their roster is built really well.
"When you look at it, there is no one that you say 'this guy has a ton of fat that can be trimmed down.' They had trimmed a lot of the cap already. It didn't make sense to cut a good player just for the sake of pouring an extra million or two million onto the signing bonus. There really just wasn't anyone that you could look at to change that way. Most teams, you look at their cap and you say 'this guy is already overpaid and you can trim some of the fat there.' The only thing that I wish wasn't the case was that there was a little bit of dead money on the Chiefs cap, which obviously if it was not there, it could have enhanced the signing bonus some. Even then, it would not have been much more. It would have only been two or three million more.
"It wasn't so much dollars left on the table. In my opinion, it was 'hey, man. Good news. Your cap number was not interrupted.' His cap hit was a little over $16 million. So, however Chris and his representatives wanted to work within that cap number, they were still in a space where they could have some flexibility with that and could essentially pursue a larger signing bonus."
Chiefs stability plays role
Chiefs head coach Andy Reid publicly said that he has not yet thought about retirement, which corroborates his message to Mahomes as well.
"We worked on a trade for Patrick for 94 days to get him to Kansas City [before the 2017 NFL Draft]," Cabott said. "Coach Reid was such a big part of that. You are obliterating the market. You are setting records across the board in career earnings. It puts you in a different orbit. It gives you security. It was 'coach, do you think you're going to be here for the full time too?' He said 'look, I'm not going anywhere.' Behind him, if he does retire before, you have an amazing Eric Bieniemy. If coach Bieniemy is gone by then, then you have a great future mastermind in Mike Kafka, who has been with Patrick since his rookie year. The ownership stability and GM stability is strong there too."
At some point, the deal signed by Kansas City's young quarterback will be eclipsed. It is unlikely that day comes any time soon, however. It was truly a one-of-a-kind contract.