Writers of Pro Football Prospectus 2008

04 Jun 2014

Colin Kaepernick Signs Six-Year, $110 Million Extension

Russell Wilson licks his lips...

Reportedly there's $61 million in guaranteed money. That's kind of unbelievable, so some of it is probably guaranteed only for injury. Full terms not out yet.

Kaepernick was set to make only $1.073 million in 2014, so kudos to him for cashing in at a time when seemingly every starting quarterback gets at least $16 million per year. Alex Smith and Andy Dalton, please contact your agents.

Just 10 years ago Peyton Manning set a record for contracts with his seven-year deal worth $99.2 million ($14.17M annually). Kaepernick will be at least the 16th player, based on rankings at Spotrac, to exceed that annual amount in 2014.

So far, no NFL player has completed a contract worth over $100 million, though Ben Roethlisberger needs to play the next two seasons in Pittsburgh to complete his eight-year deal from 2008. Kaepernick, who turns 27 in November, should be entering his prime, but as history shows, the large contract is rarely a predictor of long-term success.

Posted by: Rivers McCown on 04 Jun 2014

38 comments, Last at 06 Jun 2014, 3:54pm by Perfundle

Comments

1
by Aloysius Mephis... :: Wed, 06/04/2014 - 6:31pm

At first blush this looks like a good deal for the Niners. They lock up their franchise quarterback for what should be his peak years, at a salary comparable to Matt Stafford and Jay Cutler's. Kaepernick has his limitations but he’s better and more durable (so far) than either of those guys.

Also, I infer from this that the team has investigated and is absolutely certain that the incident in Florida isn't going to amount to anything.

2
by theslothook :: Wed, 06/04/2014 - 6:35pm

Is it clear hes currently better than Cutler? He could eventually be, but still, hes not a proven quantity just yet.

3
by Aloysius Mephis... :: Wed, 06/04/2014 - 7:12pm

Got nothing against Cutler, but yes, Kaepernick’s the better QB today and it would take a significant decline in his performance for it to be a real argument. Cutler’s been inconsistent and hindered by injuries for the past three years. Sure, Colin could blow out his knee or psychologically implode next year, but so could Jay (or pretty much any other QB).

4
by theslothook :: Wed, 06/04/2014 - 7:19pm

I think it's closer than that, but I won't argue it too much. Kaep has his flaws too but I actually think the 49ers are primed for a huge offensive season.

5
by Karl Cuba :: Wed, 06/04/2014 - 7:25pm

I think it's close but that might be because I think Cutler is pretty good and is unfairly blamed for things that went wrong that were beyond his control.

9
by Noah of Arkadia :: Wed, 06/04/2014 - 8:23pm

And the other way around, with Kaepernick.

Risky deal for the Niners, but as Jason points out in overthecap, if San Francisco waits for Rusell Wilson, Luck and Griffin to get their new contract, things could get even crazier.

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Who, me?

21
by Aloysius Mephis... :: Thu, 06/05/2014 - 3:56pm

Cutler definitely gets a bum rap at times, and has had way too many games when he's been stuck trying to cobble together drives behind almost no pass blocking. I do feel that almost any coach in the league, if he had to win one game, would take Kaepernick over Cutler without hesitating based on Kaepernick's playmaking ability. I’m a raging Niners homer, though, so take it for what it’s worth.

In any case, I had always envisioned going into the negotiation that Kaepernick would end up with something like Matt Stafford and Jay Cutler’s salary on the low end, and something like Matt Ryan’s salary on the high end, so by that standard this looks to me like a good deal for SF.

6
by theslothook :: Wed, 06/04/2014 - 7:27pm

I'm happy for Kaep as I was sure the insidious rookie wage scale would allow the contract negotiators to low ball him. WHat do I mean? He makes so little right now and the risk of an injury, I thought, would allow the Front office leverage a smaller but more immediate contract. Since this one is pretty enormous, I'm glad he didn't cave.

I also wondered if Wilson might have signed a similar low ball contract, but it won't happen now.

7
by dank067 :: Wed, 06/04/2014 - 7:50pm

For the guys on the new rookie wage scale who have had to wait for their really big deal (Kaep, Wilson, Luck, Newton, etc.), I wouldn't be surprised if they all have insurance policies in place in case injury prevents them from getting their payday similar to the one Jermichael Finley reportedly has. Not that Finley would have ever been in line for the kind of money those guys should eventually get, but his was still supposedly worth $10 million for a career ending injury, so I'm sure (well, I hope) that these guys have something like that worked out.

8
by theslothook :: Wed, 06/04/2014 - 7:59pm

That doesn't come for free though. Like Life insurance, they will have to pay the premiums on that for some time. In the end, that cost is born by the players and the teams gain all the benefits. My point is, the rookie wage scale had to happen, but the contract terms made it so that those few players who do hit it big, end up being at deep discount for 4 long years. You don't think someone like Wilson hates being the lowest paid qb on his own team? The seahawks naturally love it. Even Luck will be a discount for 5 years.

10
by dank067 :: Wed, 06/04/2014 - 8:39pm

Oh yeah, being in limbo for a few years while you're prohibited from getting a new deal you deserve like that is not a lot of fun. Where I was going was that if these guys are able to get some kind of insurance against injury, they shouldn't feel pressured to cave in and take a lowball deal. (Wasn't totally clear about that, sorry.)

Also, Wilson will be able to sign a new contract after this season since he was a 3rd round pick, right?

14
by dank067 :: Thu, 06/05/2014 - 11:31am

Well, this couldn't have been more wrong—now that the details are out, accepting a crappy contract for a massive injury guarantee appears to be exactly what Kaepernick just did.

16
by theslothook :: Thu, 06/05/2014 - 2:06pm

Well, what I was afraid might happen, happened; Kaep caved in a big way. Some of the de-escalators are pretty loopy, like he gets a de-escalator if he doesn't make all pro this year or win the sb while playing 80 percent of the snaps. I guess we could speculate that this was really just Kaep being ultra confident in his abilities or he caved.

18
by bravehoptoad :: Thu, 06/05/2014 - 2:25pm

The de-escalators are "only" $2 million a year, $12 million max, and he only needs to fulfill those conditions once to guarantee the remainder.

If he "caved" anywhere, it wasn't particularly in the total money, but in the way he allowed the 49ers to be protected for injury or regression. Every year includes something like $2 million in roster bonuses, and they can cut him any year without much penalty, and they've got him locked up for 7 years if he does turn out to be great.

19
by theslothook :: Thu, 06/05/2014 - 2:51pm

Things like making the all pro team and the Superbowl and are totally not injury protected clauses. Also, reading online summaries of the contract, the deal very much protects the 49ers, who can technically cut bait on Kaep multiple periods. Considering Cutler and Stafford didn't have these kind of qualifiers in their contracts, leads me to believe the 49ers used every bit of leverage they could in this.

20
by Karl Cuba :: Thu, 06/05/2014 - 3:48pm

Kap and his brother are tweeting that he deliberately left money on the take and agreed to the team friendly structure to try and win championships. Whether you believe that is another matter, there's often an attempt to spin deals in that way.

22
by theslothook :: Thu, 06/05/2014 - 4:10pm

Yeah that's possible. I still think, given the convoluted way it was framed(seriously, there are mortgaged backed securities with all kinds of embedded options that are less opaque than this contract), that Kaep signed it because he felt pressured to. We'll never know, but that's my overall take.

It will be interesting to see what comes forth from this, especially with the contract language. I'm not familiar with the stafford, cutler, brees, or rodgers' deals, but I can't imagine they have as many escalators and cap saving flexibility that this contract has.

24
by dank067 :: Thu, 06/05/2014 - 4:20pm

I know that Rodgers has week-by-week "stay healthy" roster bonuses like Kaepernick, but they are a bit lower- something like $600,000 per season rather than $2 million. Cutler also has those bonuses in his contract, but not starting until year 4 (at which point it will probably be re-done anyway).

23
by dank067 :: Thu, 06/05/2014 - 4:14pm

If that is what Kaepernick wanted though, I still can't help but feel that he could have gotten much more actual guaranteed money or at least significantly better protection from being cut. The dead money hit is already as low as $7.4 million in 2016, and $4.9 million in 2017. If he doesn't at least maintain his current level of play the next 2-3 years and avoid a season where he misses something like 5-6 starts or is just very injury-plagued ala RG3 this past season, he has no leverage against either being cut or forced to take a pay cut. What's the point in signing a team-friendly deal if part of that friendliness is making it easy for them to move on without you?

25
by theslothook :: Thu, 06/05/2014 - 4:20pm

I have to admit, cap friendly to me is a kind of misleading term. The original thought is, players care about guaranteed money and since guarantees can be prorated over the life of the contract, you can, in essence, short change on the base salary if you commit on the guarantees. That allows you to pay a player a low base salary and prorate the bonus over the life of the contract so the cap hit is less painful. That at least is the intuition. of course, if you cut such a player, then the bonus accelerates to the current year and then it's not "cap friendly"

Even still, Kaep's contract appears less cap friendly than you might think. If I'm reading the deadspin article correctly, its cap friendly in the next two years, then his base salary starts to kick in. Seems to me, it's only cap friendly in the sense that if they cut Kaep(confusing I know), they won't have to pay those bonuses and they won't get hamstrung. But seriously, is that any consolation to Kaep, to not hamstring the team if they move on from him?

I just have to believe that Kaep got to save face with the headline terms, but really was not paid what he really could have gotten if he was allowed to hit free agency. His more realistic annual salary is 16.1 million, less than Stafford, Cutler, and Romo.

26
by Karl Cuba :: Thu, 06/05/2014 - 4:36pm

The potential for cap friendliness (is that a word?) comes from each year being a base salary, if the niners need to create space then they can probably convert some of his base salary into prorated bonuses.

27
by dank067 :: Thu, 06/05/2014 - 4:39pm

The base salaries do get quite high starting in 2017 or so, but at that point, because it is all tied up in the base salary, it gives the 49ers the flexibility to convert some of that money into a bonus or possibly re-do the entire deal into a more traditional contract w/ a big up-front signing bonus, giving them more space in 17, 18, etc. It's also possible that $21 mil/yr won't even look that big in 2017 given all the guys waiting in line as well as the fact that the cap may increase substantially before then.

If Kaep is still playing at a high level in 2017 he will do just fine and get all that money one way or another. He's taking a big risk for the next 2-3 years or so though.

16
by theslothook :: Thu, 06/05/2014 - 2:06pm

Well, what I was afraid might happen, happened; Kaep caved in a big way. Some of the de-escalators are pretty loopy, like he gets a de-escalator if he doesn't make all pro this year or win the sb while playing 80 percent of the snaps. I guess we could speculate that this was really just Kaep being ultra confident in his abilities or he caved.

30
by Insancipitory :: Thu, 06/05/2014 - 9:18pm

He didn't cave. He bet on himself. Big. I would guess he expects to earn most of the incentives and escalators. Look at how he plays; he tries Sherman, repeatedly, when there are easier successful throws to be had. He doesn't do that on accident. I might even go so far as to suggest it's arrogant. If Tom Skerritt can like that in a pilot when lives are on the line, can't we at least appreciate it in a quarterback who's so entertaining?

34
by theslothook :: Fri, 06/06/2014 - 1:53am

/

33
by theslothook :: Fri, 06/06/2014 - 1:53am

I don't think I've ever seen a contract that the player allowed a team to void the contract whenever they felt like it. THe 61 million in "guarantees" is not really guaranteed at all. To me, allowing that screams low ball. Frankly, the whole contract feels like saving face. Realistic projections for Kaep puts it at 16.1 mil, a definite FAR cry from the 21 mil a year the contract originally purports to pay.

37
by bravehoptoad :: Fri, 06/06/2014 - 2:42pm

16.1 million doesn't seem terribly low compared to the Romo/Cutler deals.

38
by Perfundle :: Fri, 06/06/2014 - 3:54pm

It does if you take into account the absurd ease the team can cut him. Players usually choose either more guaranteed money with a lower AAV (Brady) or less guaranteed money with a higher AAV (Revis).

12
by dryheat :: Thu, 06/05/2014 - 7:56am

Is he upset? I don't know...some of his hurt feelings are certainly soothed by the Super Bowl ring and a good chance for another which was made primarily possible because he (and Thomas, and Sherman) are/were on below market deals. Off-field financial opportunities are certainly enhanced by the "Super Bowl Winning Quarterback" that now precedes his name in introductory graphics.

I'm starting to see some real similarities to Tom Brady at this stage of their careers -- Well-grounded, humble, well-spoken, good-looking, hard-working kid who knows how lucky he has it in this world and has achieved the ultimate goal early in his developmental path. As long as he continues to surround himself with good people and is able to say "no" once in a while to those outside interest which would infringe on his time, the sky's the limit.

11
by Steve in WI :: Wed, 06/04/2014 - 9:16pm

On the one hand, I don't think Kaepernick has proven himself to be a great QB yet. On the other hand, the market for proven starters has become so crazy that viewed in the context of other deals, the money is probably about right. And if Kaepernick does improve to be a top 5 QB, it definitely makes sense (just so long as he doesn't get hurt running around out there).

The 49ers are in effect committing themselves to an extra 3-4 years given the guaranteed money, right? Seems like he would have to regress quite a bit in the next couple years for them to want to move on sooner than that, so again that makes the deal sound pretty reasonable.

13
by Noah of Arkadia :: Thu, 06/05/2014 - 11:03am

Now that the details have come out it looks like an extremely good deal for SFO. Bottom line, in my estimation, it's a two year deal worth 18 million a year and it doesn't kick in till next year, so 2014 he gets to play nearly for free.

Kudos to the Niners, they strike again.

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Who, me?

15
by Karl Cuba :: Thu, 06/05/2014 - 12:31pm

I agree it looks like a team friendly deal but I think the total compensation over 2014, 2015 and 2016 is about $43 million.

28
by Noah of Arkadia :: Thu, 06/05/2014 - 8:10pm

The numbers I'm seeing at overthecap say it's a bit under 40 million in cap dollars over the next three years. That would be 3.8 this year, 17.2 in 2015 and 18.8 in 2016.

The rest of the deal will only go if it suits the team.

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Who, me?

29
by Karl Cuba :: Thu, 06/05/2014 - 8:28pm

That doesn't include the remaining $4.8 million of the signing bonus that prorates over the fourth and fifth years of the deal.

32
by Perfundle :: Thu, 06/05/2014 - 9:45pm

But at the same time, it includes $4 million-worth of the de-escalator clause that he might not get.

35
by Karl Cuba :: Fri, 06/06/2014 - 4:27am

You're right, I missed that.

36
by Noah of Arkadia :: Fri, 06/06/2014 - 9:43am

I didn't include it in the first three years because, like you said, it prorates over the fourth and fifth years of the deal. In cash flow, yes, the player gets that money, but I'm more interested in the team perspective, which is more tied to cap dollars.

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Who, me?

31
by Will Allen :: Thu, 06/05/2014 - 9:40pm

Also, if he is still healthy, and playing well, as he enters his last year on the contract, he'll only be 31, and the way things look these days, a 31 year old qb, in good health and good track record, will be looking at another very large payday. It isn't crazy for him to put a large priority on being with a well managed roster that has room to maneuver financially.