More than 113 million viewers watched the Super Bowl this year, attracted for a variety of reasons – rooting for their favorite team, making bets, and/or watching the commercials and halftime show. However, how many watched the game and received a master class in budget management? 

On Super Bowl Sunday, I was sitting at home thinking about an upcoming long weekend trip and the choices I had to make. Specifically, whether to drive or to fly, where I was staying, and where I was going to eat. My reckless side of course wanted to not only fly but also fly first class, select the nicest hotel, and pick all Michelin starred restaurants – price be damned. However, I did not have the luxury of spending whatever I wanted and therefore I had to decide among the various choices.  

As I spent way too much time pondering different restaurant and hotel options, I eventually got bored and turned on the television to watch some of the Super Bowl coverage. Little did I know that my television break was going to give me two great examples in budget management.  

During the coverage, there was a discussion about the Chiefs quarterback, Patrick Mahomes, and the Eagles quarterback, Jalen Hurts, and their salary disparity. Both quarterbacks had great seasons and in fact Mahomes was voted the Most Valuable Player in the NFL and Hurts finished 2^nd. However, this season Hurts’ pay did not accurately reflect his performance or his value to his team as he was still being paid based on his predetermined rookie contract amount, while Mahomes was paid closer to market value. (UPDATE – On April 17, 2023, Jalen Hurts signed a 5-year extension worth $255 million dollars making him the second highest-paid player on an annual basis in NFL history.) 

The NFL Salary Cap and Rookie Contracts 

The NFL has a hard salary cap, meaning each team may only spend a certain amount in total for all the players on their roster. For the 2022 season the salary cap was $208.2 million per team.  

While there are many rules and details related to a club’s spending relative to the salary cap, one major component is rookie contracts. Each year the NFL holds their newly eligible player entry draft, where each team drafts eligible players from colleges. Based on whether a player is drafted and which round and slot that player is drafted the player’s maximum annual salary is pre-determined for 3 -5 years based the collective bargaining agreement (“CBA”). (The CBA is a multi-year agreement negotiated between the National Football League Players Association (“NFLPA”) and the NFL owners.) In general, the amount of pay in a rookie contract is less than what a “veteran” player would make playing the same position as the rookie has no track record of performance at the NFL level. As a result, it is likely that a player will outperform their pre-determined rookie contract pay if they play at an elevated level in their 3 – 5 years.  

Mahomes and Hurts 2022 Salaries 

In the case of Patrick Mahomes, in 2022 he was in his sixth year in the NFL or the first year that he was not bound by his rookie contract. As a result, he was getting paid closer to his free market value. For the 2022 season Mahomes' salary cap number was $35.8 million. (The NFL salary cap has many nuances. One nuance is how the salary cap calculates a player’s salary each year. As a result, a player’s actual cash compensation and their salary cap number may not be the same. For this article, we will just be using a player’s salary cap number.) This made him the 2^nd highest paid quarterback relative to his salary cap number in the NFL. A price the Chiefs were happy to pay, as the quarterback is the most valuable position in all team sports, and Mahomes is the best quarterback in the NFL as reflected by his MVP award. 

Jalen Hurts, on the other hand, was only in his 3^rd year in the NFL and therefore he was still on his rookie contract. As a 2^nd round draft pick in 2020, his salary was only $1.6 million. This made Hurts the 53^rd highest paid quarterback! To put this in perspective, there are only 32 NFL teams so in theory every single other NFL team was paying their starting quarterback more than Hurts and 66% of the teams were paying their backup quarterback more! In fact, the Eagles were one of those teams as they paid their backup quarterback, Gardner Minshew, $2.5 million, almost $1 million more than Hurts! 

Salary Cap (Budget) Management 

As the NFL has a hard salary cap and the disparity between the two quarterback’s salaries was so severe - $34,2 million - each team’s General Managers had to make vastly different types of choices when constructing their teams’ rosters and staying within their short- and long-term budgets.  

For the Chiefs General Manager Brent Veach, he knew he was going to being paying his quarterback 17.2% of the team’s 2022 salary cap and Mahomes’ salary would be increasing over the coming seasons. As a result, he had to make tough decisions on other players on the roster. The most crucial decision was with his star wide receiver – Tyreek Hill. By all measures Hill is a superstar and one of the elite players in his position. As a player with one year left on his contract, Hill was due a new contract with a significant raise. (Star players regularly sign new contracts with at least a year left on their existing contracts.) As Veach negotiated with Hill, Veach realized that the team could no longer afford Hill with Mahomes new salary starting without significantly impacting available salary cap space for other positions. As a result, to build the best team within their salary cap space, Veach traded Hill to the Miami Dolphins for a 1st, 2nd, two 4ths and 6th round 2022 draft picks. So that is five players on rookie contracts in exchange for Hill. While the odds that any one of those players ever reach the heights of Hill’s performance are low, the potential for the cumulative roster to improve and at an annual cost of less than what Hill’s salary was high. Veach made a budgeting decision – diversifying the cost of one premier player among five cheaper and potentially better valued players. He sacrificed a star player for a deeper and better overall roster.  

Howie Roseman the Eagles General Manager had a completely different situation. Since Hurts was on an inexpensive rookie contract, Roseman had the luxury of spending more money on other positions. In fact, Roseman did the exact opposite of what Veach did. Roseman traded away his 2022 first round pick to the Tennessee Titans for their star wide receiver – AJ Brown. Roseman then signed Brown to a new four-year contract worth $100 million. The reason for the trade was that the talent and therefore the cost of Brown was needed to help ensure that Hurts – who was still unproven before this season – had the most high-quality players around him to ensure his success. Roseman was able to add this salary as he was paying his quarterback so little. 

Lessons Learned 

The results of both moves were an absolute success for each team even though the moves were the exact opposite of each other. The lessons the teams taught me were: 

1. When managing a budget, it is important to think about both the short and long term. 

In the case of the Chiefs, the trade of Tyreek Hill had short-term implications – the loss of his services and the additions of five rookies – and longer-term implications – helping prevent future salary cap issues. Brett Veach successfully managed the current year’s salary cap by staying within it and winning the Super Bowl. Longer term he successfully strengthened his roster by adding younger cheaper players while also giving him more future salary cap flexibility by trading away an expensive player.  

2. Budgets can be constructed in many ways, understand what is critical to you and build around that. 

Both teams' general managers properly evaluated their rosters prior to the season and built their teams within their budget accordingly. The Eagles’ Howie Roseman knew he had an inexpensive quarterback and had the luxury to splurge in other areas to complete his roster. The result was the trade for AJ Brown and the signing of a few more expensive players. This led to an overall roster that was widely considered more talented than the Chiefs. The Chiefs on the other hand knew they had an expensive quarterback and thus their general manager had to reduce costs across their roster with the hope that Mahomes greatness would help carry the team to success.  

3. If you find an inexpensive alternative use that to your advantage. 

The Eagles starting planning for this scenario not in 2022, not in 2021 but in 2020. Going into the 2020 draft the Eagles had a young quarterback, Carson Wentz, who they signed to a 4 year $128M contract in 2019. However, Wentz’s 2019 season was mediocre so to cover their basis Roseman drafted Jalen Hurts in the 2^nd round of the 2020 draft. (This move was unusual as teams do not generally draft another quarterback that high one year after signing the current quarterback to a significant contract. This is just another example of why Roseman is so good at his job.)  

In 2020 Wentz started the season but was ineffective again and lost his starting job to Hurts for the final two games of the season. Hurts showed enough positive signs in those two games for the Roseman to trade Wentz for a 3^rd round and what turned out to be a 1^st round pick. He turned an expensive player into two cheaper players on rookie contracts – budget management – like what Veach did with Hill.  

All these maneuvers put Roseman in position to build his 2022 Super Bowl worthy roster around Hurts – the most inexpensive starting quarterback in the NFL – by adding Brown and other more expensive players.  

So How Did These Lessons Apply to My Long Weekend Budget? 

While I was stressing about a particular weekend trip, this was not the only trip I was planning for this year. As a result, I had to budget for this weekend trip within my overall holiday budget. I could splurge for this weekend but if I did, I may not have been able to go on a few other trips I had planned for later this year. I had to think about both the short and long term. 

For my trip, I had to decide what I wanted to center my trip and budget around. In the end, I decided on a couple of nicer dinners and compensated for them by staying at a more modest hotel. 

Finally, the reason I decided to go on this trip in the first place was that I found very inexpensive airplane tickets – and no they were not first class. I decided to take advantage of this cheap option and enjoy a long weekend away from home.  

In the end, my choices and my decisions did not have the same consequences as the Chiefs or the Eagles, but I was happy with them. I stayed within budget, enjoyed my meals while spending a limited amount of time in my room and now I am looking forward to my next trip feeling more prepared because I watched the Super Bowl! 

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Written by Dan Hattori 

Fact checked by Billy Quirk 

Reviewed by KJ Kim 

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