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Joe Staley contract adjustment turns option bonus into signing bonus

The San Francisco 49ers made an interesting adjustment to Joe Staley's contract last week. We break down the details.

Kyle Terada-USA TODAY Sports

The San Francisco 49ers made a slight adjustment to Joe Staley's contract this past week, and it is unique and a little bit interesting. The adjustment will result in a $1.2 million increase to Staley's cap number this season, but then a $1.2 million credit for next season. The 49ers had $7.3 million in cap space prior to this move, so it would appear to drop the 49ers current cap space to around $6.1 million.

Last week, the 49ers had to make a decision whether or not to exercise a $6 million option on Staley's contract. That would apply to his 2018 contract year, but he would get the bonus now. The 49ers have a similar decision next year, as Staley has a $4 million option bonus for his 2019 season.

Jason Hurley first reported the 49ers did something with Staley's option, and we now have a better handle on it. According to Joel Corry, the 49ers converted Staley's option bonus to a signing bonus. It results in no increase in salary, and Staley gets paid the $6 million up front in both situations. Our friends at Over The Cap provided some details as to why the team is taking a cap hit this year and a credit next year. They also suggested some reasons why the 49ers would do this given that they are paying the money upfront either way.

Why the cap increase?

According to OTC, the NFL assumes all options are exercised when the new league year starts. Even though Staley's option was due on April 1, the league hits the 49ers with the cap charge for it. By converting the option bonus to a signing bonus, the 49ers effectively "declined" the option. However, the league already factored it in, and they view the signing bonus as a new bonus entirely.

Either bonus would be prorated out for cap purposes to the tune of $1.2 million per year. That means, for this year, the cap considers it as two separate $1.2 million cap hits. The 49ers will get back that $1.2 million next year as a credit. I don't know why the NFL can't just remove it, as it seems like a simple paperwork issue. But they can't, so that's that. I tweeted at Jason from Over The Cap to see if he knows why it can't just be removed from the books.

Why would the 49ers do this?

OTC suggested the switch might have been due in part to the recent retirements of Patrick Willis and Chris Borland. Apparently had Staley been paid the option bonus and decided to retire next year, the 49ers could not go after the money. However, with a signing bonus they are allowed to go after remaining prorated money. I'm a little surprised this difference exists since the option bonus gets prorated out as well for cap purposes. But my guess is he is getting the bonus strictly because of the exercising of the 2018 option year. I think that means it is viewed as payment for the single transaction. That seems similar to a "signing" bonus, but I guess there is a difference. This is something I am going to try and learn a little more about this offseason.