It has been almost three weeks since Colin Kaepernick agreed to terms on a six year contract extension with the San Francisco 49ers. During that time, we've seen a vast assortment of hot takes. Initially some folks were wondering how the 49ers could give him so much money given his overall lack of experience. When the real numbers came out, this switched to people wondering how he could have "lost" so badly in the negotiations. And this all happened in the span of about 24 hours.
The takes have quieted down, but the question still gets raised from time to time. Kap was asked about his contract after the final practice of minicamp:
Q: Since you had that press conference, there’s been a lot of talk about the 49ers having won the negotiations and maybe it wasn’t the best contract for you and maybe your agents got taken a little bit by the 49ers. What’s your response to all of that?
“You can skew things however you want. At the end of the day, a lot of the way the contract is set up is how every other quarterback’s contract is set up. And the things that aren’t set up like those contracts are because we wanted them that way so we can sign other players.”
Q: So it was very deliberate on your part?
“It was very deliberate by agents, the organization and myself that we want things done this way so we can keep a solid team here.”
Q: So do you feel you’re betting on yourself in the negotiations?
“If that’s what you want to call it, yes.”
A problem that frequently arises in the media, and can arise in comment sections as well, is this need to declare somebody a winner and somebody a loser. Too many national folks have ignored the context of how this deal could potentially work out for both sides. If Colin Kaepernick continues to improve as a quarterback, he could make at least $114 million, and as much as $126 million over the life of the contract.
There are two notable comments about the contract and why it is viewed as the 49ers won this negotiation. The first is that there is very little "fully" guaranteed money, and the second is that even if he earns the entire deal, he'll quickly be outpaced by other quarterback contracts.
The 49ers did get a lot out of this deal in terms of early cap space, and some flexibility later. However, as Kap pointed out, he and his agents were aware of how this deal is structured. He's repeatedly said he wanted a deal that would allow the team financial freedom to sign some of the quality players around Kap. While Kap is extremely talented, he recognizes the importance of having quality players around him. It's not exactly shocking.
More importantly, I think a lot of the people looking for a winner and a loser overlooked the fact that maybe Kap is not quite wired the same as a lot of professional athletes. Based on how quickly these negotiations wrapped, it would seem like he did not really push too hard to break the bank on this one. It does come across as a bit of a bet on himself type of deal, but the rolling guarantees are something the 49ers and other teams use. It catches some off guard when it's the quarterback getting this, but with the NFL negotiating table tilted in management's way to some extent, it's just the way things are.
The only downside to this contract for the 49ers would be if Kap does not show much, if any, improvement over the next few years. I think he has the talent and work ethic to continue improving, but hypothetically, let's say he remains about the quarterback he is right now. If that's the case, is he a $100 million quarterback? Right now, this level of quarterback play can be enough because this team is incredibly deep. If the 49ers continue to draft well, they can remain a deep roster. But even with this contract set up as it is, the 49ers will not be able to keep everybody. In 2015, Kap's cap hit rises from approximately $3.7 million to approximately $15.3 million. After that, it will continue to climb, eventually reaching $21 million in the final year. If the contract was not restructured between now and 2020, the simple mathematics mean there will be some losses. A team's ability to draft well is always important, but it takes on a whole new level of importance when you have a $100 million quarterback.
As long as Kap remains with the 49ers, the odds are pretty good this deal gets restructured, and that new deal gets restructured, and so forth, several times over the remaining years of Kap's time with the 49ers. Kap has a fairly small signing bonus coming into this deal. It helps keep the 2014 salary cap hit fairly minimal, but it also opens the door to renegotiate future years without getting killed with dead money. Teams often will create cap room by turning large base salaries into a signing bonus, and then giving the player a league minimum base salary. That allows a sizable chunk of money to be pro-rated over the life of a deal. If a player already had a big signing bonus, that can be problematic in creating large chunks of dead money. With Kap's deal, his prorated signing bonus is $2,465,754 from 2014-2018. The final two years of the deal feature no cap hits outside of base salary and roster and workout bonuses. I would bet good money his deal is renegotiated well before then to create cap room.
The only other question remaining would seem to be how the 49ers progress in contract talks with other players. This deal was structured to afford the team the opportunity to extend key players. Michael Crabtree, in particular, is a guy who has been a big part of Kap's success, and vice versa. Trent Baalke mentioned the team had spoken with him, as they do with all their free agents. The question now is what the next step will be. We haven't really heard any rumblings since then, but the team now has a lot of free time leading up to training camp. And much like Kap's agents came to town during OTAs to wrap this up, we could see the next contract extension (whomever that might be) wrapped up when training camp gets going. It's tough to predict at this point.
Thankfully for the most part though the Colin Kaepernick contract talk has died down. Moving forward, I'm sure he'll get a question or two during training camp. Additionally, when some of these other young quarterbacks sign new contracts, the topic will pop back up. It will be interesting to see if other quarterbacks go this route, and create some measure of flexibility for their team. I suspect there will be some agents pushing against that. For our purposes, none of that really matters.