Alex Smith contract: Trade, Release, Other?

Kelley L Cox-USA TODAY Sports

We break down the various options available to the 49ers as they consider their options at the quarterback position.

Although the quarterback debate remains heated here at Niners Nation, Jim Harbaugh appears set to continue forward with Colin Kaepernick as his quarterback for the foreseeable future. The debate will continue to rage, but one question that will potentially need to be answered in the offseason is what to do with Alex Smith. Assuming the team decides to stick with Colin Kaepernick after this season, Alex Smith is a luxury the team likely would not want to keep given the various other contract issues still to be sorted through.

The 49ers re-signed Smith this past March, after working out Peyton Manning. Whether Jim Harbaugh was pursuing Manning, evaluating Manning, or whatever, it showed some inclination to consider alternatives to Smith. Manning eventually signed with the Denver Broncos, and the 49ers worked out a three-year deal with Smith in a way that provided the team with an opportunity to get out of the deal each year.

Some are asking "Why not trade Smith then"? This is a perfectly valid question, but lets go into detail on what his deal looks like. Smith received no signing bonus, but rather a $3 million roster bonus once he signed the contract. Additionally, he received a guaranteed $5 million base salary. He also is eligible for $1.25 Million in "likely to be earned incentives." Those however would only be met if on the roster.

As we look at the 49ers options with Alex Smith, keep in mind that since the trade deadline has already passed, there can be no more trades done until the new league years begins next March. This is tentatively looking like March 12, 2013.

There are 2 key dates to keep in mind: 1) March 12, 2013 (tentatively based on new league year date, and 2) April 1, 2013. The former date is when Alex Smith is due a $1 million roster bonus. The latter date is when his $7.5 million base salary for 2013 becomes fully guaranteed. Whatever the 49ers elect to do, $1 million of that $7.5 million is already guaranteed separate from the base salary and the earlier March roster bonus.

Now comes the fun part: is it worth it to trade him or cut him?

By trading him, the 49ers would have to either negotiate with Smith to push the $1 million roster bonus back, and allow him to choose a team he would like to go to, or the 49ers would need to take the $1 million roster bonus, pay it, then wait until before April 1st to trade him. The 49ers could trade him after the April 1st date, but the base salary will be fully guaranteed at that point.

What likely makes the most sense is to cut Smith before the $1 million roster bonus is due. By doing that, the 49ers are only on the hook for the $1 million of his $7.75 million base salary that is guaranteed. The question is basically, is it worth a shot at getting a deal done after league year begins, or to eventually find out there is not a sufficient trade market for Smith, and be stuck releasing him before April 1, and pay him $2 million in dead money.

Below is a chart of what would be saved vs. dead money for both cutting Smith and trading Smith.

Money

If Traded/Cut after New League Years Begins

If Traded/Cut before the new League Year Begins

2013 Savings

$6,500,000

$7,500,000

2013 Dead Money

$2,000,000

$1,000,000

2014 Savings

$8,500,000

$8,500,000

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