Forget The Chiefs’ Contracts, Pay Attention To This Number

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Welcome to the part of the season that features the elements that football fans everywhere adore the most — cryptic statements and accounting.

We know that the Chiefs are trying to extend both QB Alex Smith and OLB Justin Houston. We hear that those talks are close and far away. The team used draft picks on both positions, despite being solid on paper in both places moving into the 2014 season.

If you believe that Smith is descended from George Washington and can never tell a lie, then you believe that he hasn’t given the situation “a thought.” If that’s the case, he truly is the only one.

Mandatory Credit: Andrew Weber-USA TODAY Sports

I actually think the Houston situation is more interesting in many ways. And, for the reasons I outlined last week, I think his extension should be the focus for now. For those that interpreted that to mean that I’d rather have Houston in red than Smith, that’s not my point. I want them both, but I think the Chiefs have better leverage over Houston and can sign him more easily, because, like Smith’s protege Colin Kaepernick, he’s only made a few million so far in his career with his 3rd-round-pick contract and he has a lot of injury risk going into 2014.

The team is set to pay Houston just $1.4 million for the year. Any reasonable offer sheet he signs now will probably result in him cashing in $10 million or more this year in salary and bonuses — that’s more than double what he’s made so far since being drafted.

Smith on the other hand, has already banked over $50 million from past contracts and is due $7.5 million this year. In the worst case scenario where he gets seriously injured or has a catastrophic year, he’s still going to walk away an extremely rich man, regardless of whether he agrees to an extension or not.

Is your head spinning from all the numbers yet? Well, here are some more.

The Chiefs currently just have $3.5 million in cap space for the 2014 season to work with. Without Smith or Houston on the roster, the Chiefs’ payroll still jumps by about $5 million to $132.8 million in spending in 2015.

So where are the Chiefs going to get the money to re-sign these guys? Well, that’s why the most important number in all of this discussion is the number we don’t currently know — the 2015 salary cap.

This year, the cap jumped a historic $10 million to $133 million per team. Will it jump another $10 million or more? PFT reported in March that at the time, none of the teams saw the last big bump coming:

"The full truth as to the bump, annually negotiated by the NFL and NFLPA, never will be known.  The teams, however, didn’t anticipate it.  Last October, owners were told that the cap would increase by only $3.3 million, to $126.3 million.  More recently, the number was pegged increasing by $128.3 million. As one source explained it to PFT, that’s the number most if not all owners used when establishing their budgets for the upcoming free-agency period.  It means that most if not all General Managers will have to persuade their owners to increase the budget in light of the increased cap room."

It appears the league is keeping its formula for this under wraps, but PFT pointed out that in 2014 it appeared to be pretty simple. Through TV contracts and the like, the league’s revenue went up by about $640 million during the previous year. Under the latest collective bargaining agreement, the player’s union and the teams are supposed to split that 50-50. Guess what? The 2013-2014 salary cap bump amounted to a $320 million aggregate increase in the salary cap.