Part 2: The Chiefs’ Salary Cap Signings
4 repliesHow the Chiefs have structured cap hits in the past
Look to the Past to Determine the Future
If you have any questions about terminology I suggest checking out Article #1. https://arrowheadguys.com/the-chiefs-salary-cap-setting-up-the-printer/
So now that we understand some basic salary cap terminology, let’s look at what Veach and Tilis have done in the past in order to help us predict the future. Tilis has a certain way of structuring players’ contract to benefit both the player and the team. We’ll look at Jones, Clark, and Mathieu’s contracts, then touch a bit on Hill, Kelce, and Mahomes extensions.
A common thought among fans is that Frank Clark’s contract is an albatross hanging around the Chiefs organization’s neck, and the reasoning for that was discussed previously: His salary cap hit this year is $25.8 million, and if cut would cost the Chiefs more at $38.9 mil. But as you’ll see most of these contracts are set up for major uncuttable years, which actually benefits the Chiefs. Let’s look at his numbers. Clark signed a 5 year, $104 mil contract ahead of the 2019 season. This includes $62.3 mil guaranteed and a basically a $26 mil signing bonus. His guarantees include his signing bonus, and the money from the 2019 ($6.5), 2020 ($19.3), and 2021($25.8) seasons. Outside the $12.9 mil total owed from his signing bonus, none of 2022 ($26.3) nor 2023 ($27.8) are guaranteed, which means after next year the Chiefs can extend him and divide out that money or post June 1st cut him and only owe about $6.5 mil per.
If we look at Chris Jones’ contract we see a similar pattern emerge. Last year Jones signed a 4 year $80 Mil contract with no signing bonus and $37.6 Mil guaranteed. His guaranteed money constitutes his salary from 2020 ($15) and 2021 ($21.9). 18 mil of Jones 2022 cap hit ($22.7) becomes guaranteed on 3/19/21, but all of 2023 ($20.4) is unguaranteed. This mean Jones can be cut/extended/traded with no cap hit.
Mathieu’s contract is again similar. Tyrann signed a 3 year $42 mil contract with $26.8 Mil guaranteed and a $14.8 mil signing bonus ($4.9 per). His guaranteed money can be found in his signing bonus, and contract years for 2019 ($5.9) and 2020 ($16.3). Only his leftover signing bonus is guaranteed for this upcoming 2021 season ($19.7). If things hadn’t worked out well between Mathieu and the Chiefs he could have been cut or traded for less than a $5 mil cap hit.
Kelce and Hill both signed extensions recently. Kelce signed a 4-year extension for $57.3 Mil with no signing bonus giving him 6 more years total. The remainder of his former contract in 2020 ($11.2) and 2021($13.3) became fully guaranteed and…that’s it. The next 4 years (his actual extension) is completely unguaranteed. Hill’s extension is complicated, but basically it plays out as all roster bonus with a whole lot of stipulations, as it came out after the Dubai Audio tape. He can be cut or traded at any time with minimal cap hit, but extending or restructuring him would offer minimal to no value in moving of his cap hit.
I won’t go into the nitty-gritty of it all (since it’s a little more complicated and abnormal), but Mahomes’ 10 year contract extension is the glue that makes this whole process work. Here’s what you need to know: Mahomes got a 10 mil signing bonus (signing bonuses technically only go 5 years out, so 2 mil per for the first 5 years) and 2020, 2021, and 2022 are all guaranteed. The rest of his funds are structured similar to roster bonus, which are set to all guarantee the year prior. This means if he’s on the roster in 2022, his money for 2023 becomes guaranteed, and if he’s on the roster in 2023 his 2024 money becomes guaranteed, and so on and so on. (This technically isn’t the same as a roster bonus, so the money is still flexible) This does a few things, first it gives Mahomes a lot of money and the Chiefs incentive to keep him around since the next year is always guaranteed, but at the same time it doesn’t make him ever uncuttable. Yes, the Chiefs have to take a massive hit for two years, but it’s never more than that (which it would be in a normal contract). That’s not easy move, but doable if necessary. Since there was no big signing bonus, each year of his contract can be manipulated and moved around to fill the needs of any given season. Mahomes wants to win, folks.
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This is very probably the clearest and best laid out explanation of the salary cap (as pertains to the Chiefs) that I’ve seen. Many thanks Mitko.
Thanks! That was the goal so I’m glad to see it’s successful!
The Chiefs are doing contracts the way they should be done. If you sign a big money guys (Ala Clark & Mathieu), you should put as much of the guarantees in the first half of the deal as it is extremely doubtful that the team would cut them. It is always the end of the contract that you want to be able to get out of.
I hope you have a prognostication article coming out soon that says where you would fiddle with the contracts to give the Chiefs cap space this season.
That will be going up tomorrow, the part 3 finale.