The 49ers made it clear their top priority this offseason was to finalize a contract extension for star quarterback, Colin Kaepernick. The 49ers achieved their goal with flying colors nearly seven weeks before the start of training camp. There will be no holdouts for Kaepernick this offseason, and both Kaepernick and the 49ers organization can focus on football.
On paper the deal was lauded as a mega-deal. The rough numbers are impressive: Kaepernick is signed through 2020 (six years) for $126 million and up to $61 million guaranteed. For Kap, this seems like a dream situation. Worst case scenario he walks away with $61 million regardless of his performance on the field. Wrong. The way the contract is set up shows the sheer genius and savvy of the 49ers front office.
According to ProFootballTalk who crunched the exact contract numbers, Kaepernick only walks away with $13.073 million at signing—$12.328 million signing bonus, a base salary of $645,000 and a workout bonus of $100,000. The remainder of the guaranteed base salaries for 2014, 2015, 2016, 2017 and 2018 are guaranteed only for injury.
The following are Kaepernick’s base salaries from 2015-2020:
2015: $12.4 million (guaranteed for injury only until April 1, 2015)
2016: $13.9 million (guaranteed for injury only until April 1, 2016)
2017: $16.5 million (guaranteed for injury only until April 1, 2017)
2018: $17 million (guaranteed for injury only until April 1, 2018)
2019: $18.8 million (not guaranteed)
2020: $21 million (not guaranteed)
Here’s where the genius comes in. The reason the contract is described as up to $61 million guaranteed is that there is a chance Kaepernick doesn’t see a single dime beyond his 2014 payout. The way the contract is structured, the 49ers have until April 1 of any given year to decide to move on from Kaepernick. The only way the guaranteed base salary would kick in is through injury. Other than that, the 49ers can decide to part ways from Kaepernick if he does not perform up to his potential. This gives the 49ers front office the ability to leverage their contract based on Kaepernick’s performance. In short, Kaepernick cannot just sit back on cruise control and count his money, he needs to earn it.
The other stroke of genius in this is Kaepernick’s base salary. Quarterback salaries will likely continue to increase, as well as the salary cap. If Kaepernick does win a Super Bowl in the next couple of years, the 49ers will not have to give Kaepernick the Joe Flacco treatment until 2021. Kaepernick’s base salary will be kept at a manageable amount throughout the duration of his time as a 49er.
If that wasn’t enough conditions for the 49ers front office, this last one is probably the most intriguing. The 49ers put what’s called a de-escalator on Kaepernick’s guaranteed money which could potentially remove up to $12 million in his contract. The way the de-escalator works is that Kaepernick stands to lose $2 million per year until he accomplishes one of the following feats: (1) the 49ers appear in the Super Bowl; or (2) Kaepernick is named a first-team or second-team All-Pro. If he completes either of these, the de-escalator stops. If he achieves it in 2015, he keeps $10 million. If he never achieves it, he loses $12 million.
The 49ers showed that this was not their first contract negotiation. While the numbers look nice on paper, the meat of the contract itself protects the 49ers in the event Kaepernick turns out to be a bust. The contract is performance heavy and prevents Kaepernick from becoming complacent. The 49ers still have a ways to go in terms of bringing back the key pieces to their team, but this was definitely a good start. Even though Kaepernick is secured through 2020, only time will tell who his coach will be and what receivers he will be throwing to.