Do the Chiefs have a looming salary-cap crisis?

The Kansas City Chiefs face a critical deadline on Tuesday, July 15th at 3 p.m. Arrowhead Time to sign franchise-tagged right guard Trey Smith to a long-term contract. If no deal is reached, Smith will play the season on the $23.4 million franchise tag tender he signed in March.

The outcome of these negotiations significantly impacts the Chiefs' future salary cap management. While currently estimated at $11.5 million under the 2025 cap, the team is projected to be $24.6 million over a hypothetical $307 million cap in 2026, partly due to over $100 million in guaranteed money given to free agents this spring.

A long-term deal for Smith (likely structured with a signing bonus) could significantly reduce his 2025 cap hit from $23.4 million to around $7 million or less. However, this saved cap space might need to be rolled over to 2026, when his high salary would complicate an already difficult financial picture. Failure to reach a deal makes it highly likely Smith would hit free agency after this season, as a second franchise tag would require an expensive 20% raise.

The Chiefs also face the massive future cap charges of quarterback Patrick Mahomes' contract. Annual restructures have led to cap hits of $78.2 million in 2026 and $74.4 million in 2027, which the team cannot afford. With the quarterback market settled, discussions about Mahomes' next deal (expected to average over $60 million per season) are likely needed soon. His willingness to structure it with a nominally lower average to help the team's cap will dictate the Chiefs' long-term financial strategy.

If a deal with Smith is secured, the Chiefs could turn their attention to extending their 2022 first-round draft picks, cornerback Trent McDuffie and defensive end George Karlaftis, whose fifth-year options were exercised for 2026. Starting talks now could prevent future standoffs. This is particularly relevant for McDuffie, an All-Pro who hasn't made a Pro Bowl; the lack of Pro Bowls keeps his scheduled 2026 salary at only $13.6 million, well below his market value.