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Why the Chiefs should use their cap space for trades, not free agency

In 2023, Kansas City should work to use its cap dollars as efficiently as possible.

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When the Kansas City Chiefs traded wide receiver Tyreek Hill to the Miami Dolphins in late March, it gave them flexibility in two roster-building areas: the salary cap and draft picks. The trade opened up $18.5 million in cap space — and also gave Kansas City a total of five draft picks. Three of those (a first, second and fourth-round pick) were in the 2022 NFL Draft. Two more (a fourth and sixth-round pick) are in this April’s draft.

Over the next 72 hours, the Chiefs signed numerous free agents — including safety Deon Bush, tight end Blake Bell, wide receiver Marquez Valdes-Scantling, linebacker Jermaine Carter Jr. and running back Ronald Jones. Later would come defensive tackle Taylor Stallworth, running back Jerick McKinnon and defensive end Carlos Dunlap.

The extra 2022 draft picks (and some wheeling and dealing) allowed the Chiefs to acquire first-round cornerback Trent McDuffie, second-round wide receiver Skyy Moore and fifth-round tackle Darian Kinnard.

Not all of these players were immediate home-run swings. But many of them played important roles on the road to the team’s second NFL championship in four seasons. Others will play important roles in future seasons as cost-controlled players on a roster that will continue to be dominated by quarterback Patrick Mahomes.

At this writing, the Chiefs have just $526,000 in cap space. But the team has plenty of ways it could open more. Among them would be cutting defensive end Frank Clark, which would give the team an additional $21 million in cap space. Kansas City could also open cap space with a contract extension for defensive tackle Chris Jones — or with the stroke of a pen, convert as much as $39 million of Mahomes’ 2023 salary and roster bonus to a signing bonus that could be spread over 2023 and the four years after that. That could clear as much as $31 million.

In short, the team can open up as much cap space as it needs without gutting the roster. At a time when many of the team’s young core players are on cost-controlled rookie contracts, it might make sense to boost the already-deep roster with big moves in free agency.

That’s something the Chiefs have been willing to do since head coach Andy Reid arrived, signing All-Pros like right tackle Mitchell Schwartz, left guard Joe Thuney and safety Tyrann Mathieu in free agency.

Denver Broncos v Kansas City Chiefs Photo by David Eulitt/Getty Images

For every great free agent signing, however, there can be a bad one. Kansas City signed wide receiver Sammy Watkins and linebacker Anthony Hitchens to top-of-the-market contracts in 2018. While neither player was bad, neither performed to the level of their contract, either. Generally, free agency acquisitions succeed about 50% of the time. But the misses can appear to outweigh the hits, because large contracts for underperforming players can remain locked into a team’s books for years.

But I’m not sure it makes sense for the Chiefs to be big spenders in free agency in 2023.

Traditionally, large free-agent contracts are backloaded — that is, the larger cap hits are in the later years of the contract. Teams do this because it allows them to sign good players without carrying cap hits in the current year. But this hurts your salary-cap flexibility in later seasons — which for the Chiefs, will likely include contract extensions for players like Jones, wide receiver JuJu Smith-Schuster, linebackers Nick Bolton and Willie Gay Jr., offensive linemen Creed Humphrey, Orlando Brown Jr. and Trey Smith and cornerback L’Jarius Sneed.

To keep players like these, top-of-the-market contracts will be needed. Those will be much harder to do if the team is carrying very many backloaded contracts. Considering free agency’s success rate, why would a team want to sacrifice the future flexibility that will be needed to retain proven players?

The Chiefs could minimize this problem by using their cap dollars to absorb contracts from other teams through trades. Every year, we see good players being traded for late-round picks. The Baltimore Ravens, for example, acquired players like defensive tackle Calais Campbell, defensive end Yannick Ngakoue and cornerback Marcus Peters without trading a top-75 pick.

Instead of hoping a player can be signed to a reasonable deal on the open market after he is released, teams will trade a Day 3 pick to guarantee the acquisition and absorb a contract negotiated in a previous season — usually with the original signing bonus staying on the other team’s books. If the player works out, his contract can be extended much more easily.

The Chiefs will have as many as 12 picks in the 2023 draft — with nine of them on Day 3. Although Kansas City has acquired a number of good players with late-round packs in recent years, the success rate for these picks is still low. Most years, teams get just one good player on Day 3. Even when these late picks are successful, it’s often hard to roster the young players, giving them the playing time they need to develop.

The Chiefs should still explore free agency. But if it were me, I’d rather use the biggest chunks of money to extend the deals of players who have already proved themselves in Kansas City — and then use some of the late picks to acquire good veteran players for 1-2 seasons. Players like defensive ends Carl Lawson, Za’Darius Smith and Emmanuel Ogbah might be available — and give the Chiefs quality play for minimum investments.

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