Assessing Kaepernick's Contract

I'm listening to the NFL network this morning and I am hearing the radio broadcasters discuss how Colin's agents' lack of experience lead to Colin taking a team friendly deal. I don't believe this is a fair representation of what happened and the results of the contract.

At issue is the amount of guaranteed money Colin is getting. He is only getting $13M guaranteed. Most QB's have been getting at least $30M. The difference is that Colin has $61M guaranteed for injury. In most QB contracts there is not a separate injury guarantee amount (it does happen, just not often). This is a fair trade off that the media seems to discount.

We still don't know how good Colin can eventually be, but we aren't working in a vacuum either. He's had plenty of starts and we know that we can win a SB with him. It hasn't happened yet, but he has shown enough to reasonably believe that he is capable of it.

So, if Colin has an average year in 2014, or plays worse than 2013, does anyone really think we are going to cut him for 2015? We won't, so guaranteeing Colin's 2015 salary is essentially done. We've got Harbaugh and Baalke both under contract, and Jed York's support. Colin isn't on a team that may completely rebuild itself next year, so he doesn't have to worry about guaranteeing that money in the contract. As long as an asteroid doesn't hit the earth, or something equally as catastrophic, Colin is getting his 2015 money. Colin is due approx 14.8M in cash in 2015, bringing his two year total to 27.8M. Close enough to $30M. Colin is getting as much money as he would have gotten with a larger signing bonus and has the additional $30M guarenteed for injury. His agent's did fine on this one.

Another area where the media has mentioned that Kapernick got "fleeced" is in the amount of money in the first years of Colin's contract. Colin is set to earn 46.7M from 2014-2016. If the de-escalators kick in for 2 years, that drops to 42.7M. What if Colin hadn't signed the contract? He would have made 1.1M in 2014, and potentially been franchise tagged for two years at $20M and $24M, for a total of $45M. In the first 3 years of Colin's deal he is making virtually the same money he would have made if he had held out and forced the 49ers to franchise tag him. Colin get's more of it up front, and the 49ers get to spread out the total over more years. The 49ers could now also use the tag on someone else if they need to. A true win-win.

Another oddity that I've heard discussed is the insurance the Colin has to pick up to cover the Niners if Colin does get injured. This is odd, but probably required because the 49ers couldn't do it themselves. Maybe there was a limit on the amount of insurance they could take out, or there may be legal restrictions. It could have been a last minute negotiating chip, but that seems odd. The worst part of this is that it would have been nice to handle this off-line and not use cap space to pay insurance. I'm sure will get the low-down on the reasoning for this at some point. AnthonyLy wrote a nice article on the expected insurance costs. It's not an insignificant amount, but its nothing he can't absorb as the cost of doing business.

I'm sure it's cool for Colin to be a $20M quarterback. The contract was written to reflect this (6 year extension @ 126M). If we factor in the potential de-escalators, the total contract could be for as low as $114M. Over 7 years, this works out to 16.3M - 18M per season on average. Is this too much to pay for a single player?

Over the last year we've probably dedicated at least a dozen blogs to how much you can pay your quarterback and still win the SB. Using average contract amounts and a 3 season average (Sb + prior 2 seasons), our current staple of franchise QB's all won their Super Bowls making approximately 7-9% of the salary cap. The exceptions are the Manning brothers. For Eli's second SB he was at 13.4% of the 3 year cap and for Peyton's SB win he was at 15.9% of the 3 year cap. If you assume Peyton is an outlier, then Eli's percentage represents our target max to pay our QB. How do Colin's cap numbers compare? If you assume 5% cap growth annually, and the same methodology of using 3 year averages, the Colin's cap percentages are 9.5% (2016), 13.1%, 13.4%, 13.3%, and 13.0%. We are pushing the limit for how much we want to pay our QB, but we are working within a proven super bowl winning pay range.

The only flaw in the above calculation is, what if the salary cap doesn't go up 5% every year? Since there is virtually no dead money in the contract, we can re-negotiate at any time. This works both ways, BTW. If the salary cap were to explode there is little to prevent Colin from holding out.

I know there is nothing new here, but I wanted to compare the elements of Colin's contract to some of the previous analysis we (me and others) had done waiting for this deal to come to fruition. To say that Colin's agents didn't do well is lazy reporting. Colin is getting everything that was coming to him, and is protected from a career ending injury. The 49ers also came out well, locking up a key position with little risk if, unfortunately, he doesn't turn out to be as great as we all know he will be. I think the media always wants a winner and a loser, so they have vacillated the last few days because this is truly a win-win deal.

This is a FanPost and does not necessarily reflect the views of Niners Nation's writers or editors. It does reflect the views of this particular fan though, which is as important as the views of Niners Nation's writers or editors.

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