KC Masterpiece? Why the Patrick Mahomes Contract Should Scare MLB

Kyler Murray was just proven right. And that should scare Major League Baseball.

First Truth

It is categorically impossible to grow a sport without a financial incentive. Yes, we all love to think players play “for the love of the game,” but it’s also their jobs. This is how they provide for their families, how they pay their mortgages, how they send their kids to college. Professional athletes, just like any Average Joe like you and me, deserve and expect to make as much as the market will allow.

Compensation update: Patrick Mahomes’ 10-year extension is worth $450 million, sources tell ESPN.

The injury guarantee is $140 million, per source.

The contract does not contain language that ties its value to a percentage of the salary cap.

Richest deal in sports’ history.

— Adam Schefter (@AdamSchefter) July 6, 2020

Immediate Cash

In the NFL world, earlier today, Patrick Mahomes II reportedly agreed to a 12-year contract worth $450 million. That specific number is significant because it beats Mike Trout’s $426.5 million over the same term. That means that, for the first time since Kevin Garnett in December of 2000, the highest-paid player in sports isn’t playing baseball.

Second Truth

There’s a lot more money in the National Football League than there is in Major League Baseball, and it was only a matter of time until a star quarterback signed a long-term “baseball style” contract. However, it is a bad thing that it has happened so soon, prior to Major League Baseball beginning to pay a large number of their star players fair value. It’s going to only be a catalyst towards driving people away from baseball and to other sports, and it’s already started.

Missed Chance

The Oakland Athletics spent their ninth overall pick in 2018 on current Arizona Cardinals quarterback Kyler Murray. That’s a sentence that, in the past, wouldn’t have been fathomable. It’s one that, quite frankly, shouldn’t be now. However, it is. And how did we get here?

Foundation

Going into his junior season at quarterback for the Oklahoma Sooners, Kyler Murray wasn’t seen by many as a potential franchise quarterback. He quickly changed people’s minds, however, and got selected #1 overall by the Cardinals, becoming the first-ever player drafted in the top 10 in both sports. It also presented him with a scenario in which he had to pick. He picked football, and, unfortunately for the health of Major League Baseball, he made the right decision.

Making Moves

Murray signed for $4.66 million with the A’s. It’s impossible to truly predict how good Murray would have been in the minors, or in the majors, but for the sake of argument, let’s assume Billy Beane and David Forst were correct in their evaluation of Murray, and he would become a very good Major Leaguer. I’m going to model his arbitration process after Kris Bryant’s as a best-case scenario for Murray.

Cold Realization

Murray would probably have spent 2019 in A ball, 2020 in AA, and 2021 in AAA. In all of those seasons, he is making next to nothing. Let’s assume that a small market team like the A’s manipulates his service time for an extra year of control. He finally cracks the big leagues in 2022, and is under team control until after the 2028 season.

Baseball Green

Over that time, he can expect to make pre-arbitration salaries for the first three years. That’s roughly $2 million over those two years. In years one and two of arbitration, which would be 2025 and 2026, he combines to make roughly $22 million. After that,  2027, he makes $18 million or so, and then in 2028 he makes $25 million. In his first 10.5 professional seasons, that comes out to roughly $72 million.

Smarter Move

Instead, he signed an NFL contract which pays him $35 million over the first four years. Over that same time period playing baseball, he would have made, at best, $6 million. He then gets to enter an NFL free agency market in which the best player in the league now makes more than baseball’s best player. And he enters that free agency market in 2022, a whole six years before he would enter free agency in baseball.

History

The previous highest paid contract in the NFL was Matt Ryan, who signed a 5-year contract worth at least $100 million guaranteed. Kyler Murray is a really good quarterback, so that’s probably his floor when he signs another contract. This means he is guaranteed at least $135 million by the time he would hit Major League free agency, with the potential for a lot more.

Now give me one logical reason that someone would choose the green line over the red line, especially now that the precedent for long-term NFL contracts has been set. There isn’t one, and the fact that there isn’t is what is starting to drown Major League Baseball

Previous

Major League Baseball’s boast was always that they gave out the biggest contracts. Mahomes’s contract is being colloquially described as “baseball money.” It does fall on deaf ears, however, when you boast that you give out the biggest contracts without having given out the biggest one.

Changing Landscape

A lot has changed since Alex Rodriguez topped the Kevin Garnett contract back in 2000. The NBA had a massive revenue spike in 2016, leading to a lot bigger contracts for role players, and is on target for another one. The quarterback market in the NFL has doubled since 2011.

Peyton Manning signed for $18M APY in 2011, just over half of Russell Wilson's $35M APY.

The QB market will now officially have grown by 100% over the decade, with Mahomes more than doubling that APY

— Brad Spielberger (@PFF_Brad) July 6, 2020

Needed Change

Baseball just hasn’t had a spike like that, and if the labor negotiations we just sat through show anything, the owners aren’t going go pay players enough for one without both a salary floor and completely tearing apart the arbitration process, neither of which seem viable.

Puzzling

MLB seems to have a perception that, as long as they focus on the major leagues and specifically their superstars, their sport isn’t going to fall behind. They are doing a fantastic job making sure their superstars get paid long term. 18 of the top 20 contracts in sports, even after Mahomes is included, are Major Leaguers. That was, however, by virtue solely of giving out longer-term contracts than either the NBA or NFL do.

New Era

As of July 6, 2020, that’s no longer the precedent, so “added stability” is no longer a plus when comparing MLB to their counterparts. All it takes is the NBA getting rid of their “max contract,” allowing ten-year contracts, and MLB will have zero pluses. They don’t pay their best teenagers more than a stipend. They don’t pay their best players fair value until they are almost 30 years old.

Going Forward

Imagine trying to convince 18-year olds, most of whom are playing multiple sports at a high level, that it is this league in which you should spend the rest of your life in. It’s an impossible conversation because it would either be rooted in a lie or in a logical fallacy.

Changes Afoot

The CBA is going to be renegotiated within the next 18 months, and it is now extremely fair to say that these negotiations hold the future of the sport in its hands. If the league fails to, at minimum, reclaim the pluses it had over the competing leagues, it’s time to kiss Major League Baseball goodbye. Because, at best, it’ll then be the best players who fail to make other professional sports leagues, playing.

And that can’t be the fate of Major League Baseball because that’s the definition of a Minor League.