The Chiefs and their Pro Bowl safety failed to reach an agreement ahead of Friday's franchise tag deadline, a source familiar with the negotiations told NFL Media's Rand Getlin.
Getlin previously reported the sides were "miles apart," leaving Berry with just one option: playing out the year under the $10.8 million franchise tag before hitting the open market next offseason.
"Unfortunately, we were unable to reach a long-term agreement with Eric's representatives before today's deadline," Chiefs general manager John Dorsey said in a statement released by the team on Friday. "Although both sides would have preferred a different outcome, Eric is a true professional and a tremendous football player, and we know that he will continue to be a leader in our locker room. We look forward to resuming our discussions on a long-term agreement when the negotiating window reopens after the season."
Berry admitted last week that he was surprised a new contract hadn't been worked out. It's a sour turn of events for both sides after Berry roared back last season from Hodgkin's lymphoma -- which wiped out his 2014 campaign -- to earn his fourth Pro Bowl selection and Comeback Player of the Year honors.
Berry was likely angling for a deal close to Harrison Smith's five-year, $51.25 million pact with Minnesota, but NFL Media's Mike Garafolo made it clear on Friday that Kansas City played hardball from the start.
"This is business and, boy, did the Chiefs stick to business on this one," Garafolo told NFL Network. "They weren't just about to hand this guy a deal in which they felt they were going to be overpaying because of everything that he went through. This was hard negotiating at times and, in fact, we had a couple of sources ... tell us that during negotiations the Chiefs wanted Berry to pay for a disability insurance policy that would have named the team as a beneficiary. Given everything that he's been through, that didn't go over so well."
The Chiefs, per Garafolo, refused to weigh in on the matter, but the team later pulled the disability clause. Getlin reported that the $20 million insurance policy included a premium that could rise up to $2 million.
Said Garafolo: "For the Chiefs to ask Berry to do that, I asked a couple people around the league, they thought that was a big surprise on that one. That was just another example -- there were other holdups in the overall value of the deal -- but that was an example of how this was strictly business here and personal feelings did not get involved too much for the Chiefs."
Berry's successful comeback was the best story in football last season, but his failure to land a new deal in Kansas City is another stark reminder of how today's NFL really works.