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The 49ers are gambling with Jimmy Garoppolo, but it makes sense

The 49ers could have decided to wait with Jimmy Garoppolo, but they are officially all in.

The San Francisco 49ers and Jimmy Garoppolo have reportedly agreed to terms on a five-year contract extension worth up to $137.5 million. Matt Maiocco is reporting the deal includes $74 million in total guarantees, and Adam Schefter is reporting the deal includes as much as $90 million to be earned in the first three years.

We are still awaiting the specifics, but that gives us at least a ballpark of this deal. Barring anything unexpected, the fully guaranteed money is likely to be somewhere between $40 million and $50 million. The APY is the highest in league history, but his guarantees seem set to be just north of Derek Carr. It’s record-setting in regards to APY, but as always, the devil is in the details.

We are now a little over 12 hours removed from the announcement. Passion is still running high, but we have a chance to assess this a little more thoroughly outside of the emotion of the moment. Naturally, reactions are all over the place. A lot of us are excited, while more objective observers (and some opposing fans) are snickering at the 49ers signing Garoppolo to a “record-setting” contract. Garoppolo has 12 career touchdown passes and seven career starts. He looked fantastic the final five weeks of the 2017 regular season, but the sample size argument is not going away this offseason.

The details will offer more clarity, but at first glance, we can see some logical reasons to get this done now as is, and some reasons it was not entirely logical. When you’re talking about a player getting this much money at this point in his career, it will never be entirely logical. But it is worth considering both sides of this.

We’ve talked about the realities of NFL economics. Jimmy Garoppolo is the highest paid quarterback because he is the most recently signed big name quarterback. The counter for some is that the 49ers could have used the franchise tag to decide if he’s worth it, and then if he is, pay up a year from now. I see some logic behind that. Teams have an inherent advantage in contract negotiations, and the 49ers appear to have elected not to use one of the tools in their negotiation tool kit.

A logical argument would have been to use the franchise tag this year to see if he could carry his five games over to a full season. The 49ers have the cap space either way, so why not wait a year and get a bit more confidence in the quarterback in which you are investing. They would pay a premium for waiting, but again, cap space is not the problem.

On the other hand, the 49ers seem pretty confident in Garoppolo. Shanahan was high on him dating back to last offseason during roster assessments, and the final five games would only add to that confidence. There is always talk about paying for potential rather than paying for what a player has already done. The 49ers are doing exactly that, in a big way.

In reality, this deal could benefit both sides. It requires a certain leap of faith on the 49ers side, but when it comes to a franchise quarterback, sometimes it makes sense to make that leap. If they think he’s their guy, then they have to pay the man. They could wait, but this is also potentially creates a more productive relationship moving forward. If things work out the way we hope, the two sides will be looking at multiple contract re-negotiations in the coming years. I’m guessing there is a fair bit of good will right now between all parties involved.

As for Garoppolo’s side? The $90 million over the next three years is not fully guaranteed, but the total does come close to matching what he would earn if he was given the exclusive franchise tag for three straight years. If tagged this year, he would have earned roughly $24 million. If tagged again next year, he would have earned a 20 percent increase, or $28.8 million. If he was tagged a third time in 2020, he would have earned a 44 percent increase, or $41.4 million. That adds up to $94 million.

I don’t think it’s a coincidence that the first three years of pay are reportedly adding up to nearly $90 million. I have to think both sides knew they had to use that $94 million as a benchmark in negotiations. For Garoppolo, the franchise money is fully guaranteed with each tag, but the 2019 and 2020 tags are not guaranteed until the tag is applied in those year. That $94 million would have been fully guaranteed, but only if he made it to next year and the following year to get tagged. There is something to be said for getting further security now.

Furthermore, the last franchise tag would be the final year of the current CBA. He’d have plenty of money from the three tags, but there would be uncertainty about what his next contract might look like following a new CBA and TV deals. With this contract, he is signed through the CBA and TV negotiations (barring negotiation breakdowns), and can re-assess things as the new CBA and TV deals happen.

There is plenty to be debated on both sides of this decision — and I think both sides have reasonable arguments to be made for why they are right. A franchise quarterback does not come around very often. At the same time, Garoppolo does only have seven career starts and 12 career touchdowns. There are few guarantees in life, and so yes, the 49ers are rolling the dice to a certain extent. But it is entirely clear that confidence is not a concern.