While the devil always does and always will reside in the details of NFL contracts, the early reports regarding the contract given by the Texans to quarterback Deshaun Watson suggest that his deal will compare favorably to the one signed by Chiefs quarterback Patrick Mahomes.
Watson’s four-year extension (he’d wanted at one point a three-year extension) puts him under contract for six total years. Mahomes has a 12-year commitment to the Chiefs, with no obligation on the part of the team to tear up the contract at any time before it expires after the 2021 season.
Watson reportedly received a $27 million signing bonus. That’s $17 million more than the signing bonus paid by the Chiefs to Mahomes. Beyond signing bonus, other key factors to assess include guarantees for skill, injury, and cap at signing and cash flow through the first three seasons. There’s a very good chance that Watson’s deal, based on the three key factors for assessing the value of a contract, will look better than Mahomes’ deal.
That said, here’s something important to remember when processing the news that Watson’s deal has a value of $39 million per year. That’s the new-money average based on the four new years. Factoring in the total money that Watson was already due to make over the next two years, the new six-year contract that will replace his existing deal has a value of $29.11 million per year.
Which metric makes the money sense? Frankly, neither. Officially, the union focuses on the new-money average. Most agents argue for the new-money average, too, given that it’s almost always higher than the total value at signing. Regardless, there’s technically no such thing as an extension. The old contract goes away and a new one takes its place. Ultimately, the full picture as to what the player is receiving can be discerned only by taking into account both the “new money” and the actual value of the new contract.
Whatever the metric, Watson got the reward he deserved. And he’ll be in position to get another reward far sooner than Mahomes. Watson’s next deal, based on increased revenues for the league and in turn a much higher salary cap for all teams, could be the one that gets the Chiefs to look at the remainder of Mahomes’ contract and replace it with something that better reflects where the market eventually will be.