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 for three to four to five years really till the end of contracts. The longest contract was the kicker through last season. 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 was the highest-paid 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. When you started looking at those amounts, you start seeing how you get there, it became clear that the money requirements, one way to get there were years and 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 one of the highest contracts in sports at one time."
A major obstacle arises
Negotiations began 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; were definitely interested in extending him," Cabott said. "I think, the uncertainty of the coronavirus when you have certainty, on a roster, usually you like to maintain what is certain during uncertain times. So if you look at the Titans with Derrick Henry. Look at the Titans and everything that went on there with [Ryan] Tannehill. If you look at what the Packers are trying to do with some of their stars, you want to bring back what's worked.
"You want to bring back what has worked well, and have certainty during uncertain times. They knew that there could be some potential cap decrease, obviously, we just saw today that 2020 is going to be at least $175 [million]. It looks like for the first time we could have a flat cap in the best scenario or we could have a decrease. The reality of it is though, we're going to be in a deficit next year across the league because teams are able to roll over what cap they haven't spent from the year before and everybody this year's pretty much up against the cap. So, you're not gonna have a whole lot of rollover the next year. 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 auction bonuses to different signing bonus structures, whatever, but they all kind of went into three categories. The first category was do nothing; literally, ride this out, ride out the tags, things like that. 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
The Chiefs were tasked with diagramming the long-term plan whereas Mahomes' representation would focus on a shorter deal.
"On the short term basis, when you start to go through it, when you looked at the tags if you played out three tags compensation-wise, he was gonna beat that, and obviously no guarantees that come along with it," 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 for everything. But with the NFL funding requirement, teams have to write a check for the fully guaranteed money to the league. It really limits what that amount is. So, you know obviously, if we're going to be like $40 [million] a year, probably could be at $40 [million] and then reset the market and what not but, we didn't want to be in a scenario where he was getting leapfrogged in a couple of years and things like that.
"The more we dug into it. it was do nothing or it was, A.) look at this really unique long-term deal where we could have basketball concepts of outs, baseball concepts with no trade. We could essentially have a scenario where the average went from $35 [million] to $45 [million]. We have never seen a jump like that before. B.) If you look at it, it is essentially two five-year extensions on top of each other; one was at $40 [million], one was at $50 [million]. So we were outpacing the market, outpacing the cap. C.) then we started getting into, for Patrick, what mattered, amounts guaranteed. Chiefs wanted years. Just what mattered there was what we started to figure out, okay, I think we have a way to create a fully guaranteed contract. Ultimately, that is where the $477 [million] in guarantees came from what we started with, with the mechanisms, with stuff, you know the roster bonuses would vest and become guaranteed years in advance. When you looked at, okay, Matt Ryan's contract is the largest in the NFL to that point at $150 [million]. Patrick is at $141 [million] in injury guarantees from the shoot. So, very close to the largest ever.
"You know he's not going to get cut for skill. But, by the time that he would get through that $141 [million], he's already unlocked another $80 [million] in full guarantees. By the time we get to the end of that, he unlocks a whole 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 he is nine figures south of Patrick. I felt like pro football was the big winner of that."
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 Patrick playing on this contract, he would be ahead of Mike Trout. Patrick would be at 15 total seasons because he has three seasons already. Trout would be at 19. LeBron James would be at 19. Alex Rodriguez would have been 23. So he is outpacing career earnings by every sport in the average compensation. He was outpacing every athlete in every sport tremendously when you look at career earnings on an annual basis. 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 forthcoming quarterback contracts," Cabott said. "When you looked at the forthcoming quarterback contracts, there are probably six guys that could potentially be getting an extension coming up; that's Josh Allen, Sam Darnold, Lamar Jackson, Baker Mayfield, Deshaun and then obviously Dak [Prescott], who has a contract scenario coming up. What determines someone's compensation in the quarterback world is Super Bowls and MVPs. That's the standard.
"He would have gone to another Super Bowl had it not been for an offsides penalty. [If he] wins a Super Bowl and he is Super Bowl MVP, 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. But 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. 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.
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