Many thought New Orleans Saints head coach Sean Payton was on his way out late last season, but he agreed to a five-year contract extension on Wednesday, the team announced:

New Orleans Saints Head Coach Payton has agreed to a five-year extension with the team, he told reporters at the NFC coaches breakfast during the NFL annual meeting in Boca Raton, Florida.

Payton said he had the contract in his briefcase and had been discussing it with ownership, GM Mickey Loomis and Team President Dennis Lauscha since the end of the regular season. 

ESPN's Ed Werder, citing a source, reported that "Payton has agreed to five-year contract extension worth slightly more than $45 million. He was making $8.5 million per year."

On Feb. 25, Payton said he and the Saints were close to reaching a deal on an extension, per Pro Football Talk's Mike Florio. The former Super Bowl champion added at the time that he plans to remain in New Orleans “for at least the next four or five years." 

In late December, speculation surfaced that Payton would be on his way out after nine seasons.

But less than two weeks later, in a lengthy postseason media conference, Payton reiterated his intentions to remain in the Big Easy.

"I know it appeared there was a looming decision, but I think this is really me saying again...here I am and nothing's changing, and I plan on finishing my career here," Payton said at the time, per Brett Martel of the Associated Press. "I'll be here as long as they'll have me.”

In addition to Payton, Drew Brees is reportedly on the verge of signing a contract extension, the head coach indicated per Florio, as the quarterback enters the final year of his deal.

Brees' $30 million cap hit is set to be the highest in the NFL next year, according to Spotrac. The 37-year-old is coming off a season in which he led the league with 4,870 yards despite missing a game in September. 

However, his hefty cap hit could take its toll and prevent the team from seeking talent upgrades—most notably on defense. The Saints allowed a league-worst 29.8 points per game and were 31st in total yards allowed with 413.4 per contest last year.

Payton acknowledged the defense needs to improve but is also confident that a restructured Brees deal could help free up cap room, per Nick Underhill of the Advocate:

I go to bed thinking about improving our defense. I don’t mean to skirt that but I just know there will be an extension and I know things will get worked out. I just know where he’s at and his mind set and his competitive nature of wanting to be successful and I know without speaking for him, hey, there’s still more success to be had.

Since coming together in 2006, Brees, Payton and the Saints have burgeoned into an NFC powerhouse, reaching the playoffs in five of their first eight seasons, capped with a Super Bowl win in 2009. 

But they’ve hit a skid and finished 7-9 in each of the past two years, leading to speculation over the pair's future. Both appear to be committed to the Saints long-term, but vast improvements on defense and at wide receiver are needed if they hope to catch the Carolina Panthers in the NFC South.