Kaepernick's mega-deal actually has little risk for 49ers

Kaepernick's mega-deal actually has little risk for 49ers
June 5, 2014, 12:30 am
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Only fully guaranteed are a $12.328 million signing bonus, a base salary of $645,000, and a workout bonus of $100,000. (AP)

The 49ers signed Colin Kaepernick to a contract extension a full seven weeks before their target date of the opening of training camp.

There had to be a reason 49ers president Paraag Marathe, known as a shrewd negotiator, would finalize a deal on this expedited timeline. He was negotiating with agents, Scott Smith and Jason Bernstein of XAM Sports, who have little experience with big-money deals.

The initial reports, which come from sources who invariably want to make the deal sound better than reality, were a seven-year deal (including the upcoming season) for up to $126 million, including more than $60 million guaranteed.

Even Kaepernick intimated during his press conference that the numbers were not as they seemed.

“Part of the way the contract is written and the way it was negotiated was so they would be able to sign other players,” Kapernick said. “That was something that my agents and the organization worked out and they felt like this was something they would be able to get other players with.”

As it turns out, the initial numbers were are highly deceptive, according to a league source with knowledge of the deal who sent the details to Pro Football Talk.

Instead of more than $60 million guaranteed, the actual contract includes only $13.073 million in fully guaranteed money. The rest of the money is guaranteed for injury only.

According to PFT, the only fully guaranteed aspects of the deal are a $12.328 million signing bonus, a base salary of $645,000, and a workout bonus of $100,000 in the first year of the deal.

With those figures, Kaepernick’s salary cap figure in 2014 would be approximate $3.8 million. (UPDATED: I originally wrote $2.5 million, but Article 16, Section 6, Paragraph 5 on proration in the CBA states the maximum proration length is five years. I also failed to factor in the remaining proration of $556,691 from his original four-year, $5.129 million). Still, the relatively low cap figure for 2014 leaves the 49ers with flexibility to make other deals.

The rest of the so-called guaranteed money comes in the form of base salaries in 2014-‘17, and part of 2018, which are guaranteed for injury only. In other words, if the 49ers experience buyer’s remorse, they can release Kaepernick and only absorb the remaining prorated money from his signing bonus as a hit on the salary cap.

The deadline for the 49ers to pick up the base salary on Kaepernick’s contract comes on April 1 of each year. His base salaries, according to PFT’s sources are:

2015: $12.4 million
2016: $13.9 million
2017: $16.5 million
2018: $17 million – with $5.2 million guaranteed for injury only by the April 1 deadline.

Then, Kaepernick has non-guaranteed base salaries in 2019 of $18.8 million and, in 2020, of $21 million.

And that’s not all that makes this a very low-risk deal for the 49ers, according to PFT sources.

From 2015 through 2020, the contract could “de-escalate” by $2 million per season.

According to PFT:

Kaepernick can halt the de-escalation by taking, in any year of the deal, 80 percent of the snaps and if: (1) the 49ers appear in the Super Bowl; or (2) Kaepernick is named a first-team or second-team All-Pro. If he satisfies the requirement in 2014, the full $12 million remains. If he fails in 2014 but succeeds in 2015, $10 million stays. If he does it for the first time in 2016, $8 million remains. If he does it for the first time in 2017, $6 million stays — and so on until 2019, when if he satisfies the requirement that year for the first time $2 million stays in the deal for 2010. One of the hallmarks of Marathe’s big-money deals is the inclusion of per-game roster bonuses.

Starting in 2015, Kaepernick has $2 million annually in per-game roster bonuses. In essence, he'll lose $125,000 for every game in which he does not suit up. In comparison, Patrick Willis lost nearly $100,000 total when he was held out for two games due to a groin strain.

According to PFT, the deal requires Kaepernick to purchase, with after-tax dollars, a disability policy that pays the 49ers $20 million if he suffers a career-ending injury.

Kaepernick will earn $400,000 a year via workout bonuses, beginning next offseason.

 

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