Eric Paolini

Financial Impact Of Jamaal Charles' Extension

Created on Aug. 01, 2014 4:55 AM EST

Throughout much of this offseason, I’ve written about the extensions for Alex Smith and Justin Houston that are probably coming. Recent decisions by the Kansas City Chiefs appeared to be made to potentially free up cap room to make these apparently necessary signings. 

Future cap space is vital for Kansas City as Houston’s annual cap hit will increase considerably if he signs an extension. If Smith gets the contract he reportedly wants, the same could be true for him. 

The player who I didn’t consider was Jamaal Charles. With two years left on his current deal, it seemed that extension talks wouldn’t occur until next year. However, after a brilliant season in 2013, Charles wanted a raise and threatened to hold out of training camp. Technically, Charles held out of camp the day he was due to report, but he signed his new deal later that day. 

The deal tacks on an extra two years to Charles’ current contract, keeping him away from free agency until after the 2017 season. However, the biggest impact of the extension is the raise Charles will receive these next two seasons. Charles’ cap hit for this season more than doubled and is now a little more than $9.6 million. 

The deal is structured so that Charles’ yearly cap hits will decrease as he ages. Usually, a contract that pays less year after year is a safe bet against an aging player’s on-field value decreasing while his monetary value is increasing. Charles isn’t at the age (27) where that’s a concern for Kansas City. By front-loading the contract, the Chiefs can keep the books a little lighter when, or possibly if, they sign Houston and Smith to extensions. Furthermore, Kansas City can appease Charles’ financial desires by using cap space they probably wouldn’t be able to use otherwise. 

Kansas City increased its cap room to nearly $10 million when it released Brandon Flowers in June. The timing of the release didn’t allow Kansas City more spending in free agency, as that had come and gone. Anybody else they wanted to sign most likely would have been a minimum-salary player. The Chiefs found a way to use that cap space. The extra $4 million-plus Charles will get paid this season fits nicely into the remaining space. 

Charles will just be turning 30 as his contract expires. Provided Charles doesn’t fall apart a la Chris Johnson, he should be in his prime throughout the contract. Charles should continue to thrive in Andy Reid’s offense and justify his contract.

Charles had a historic year last season. While this contract pays Charles closer to what he’s worth, how is the deal is structured prevents him from being overpaid if he doesn’t replicate his phenomenal 2013 season. Even more importantly, it shouldn’t price the Chiefs out of an extension for Houston. 

Any deal that makes your star running back, let alone the majority of the offense, happy while simultaneously keeping the books clean enough to pay one of your best defenders is a good deal.

Loading ...