San Francisco 49ers: Evaluating Colin Kaepernick's Contract Situation

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San Francisco 49ers: Evaluating Colin Kaepernick's Contract Situation
Ronald Martinez/Getty Images

Contract negotiations between the San Francisco 49ers and Colin Kaepernick are underway.  Compared to the recent revelations about troubles in the front office, the Kaepernick contract negotiations seem to be going well, according to Tim Kawakami of the San Jose Mercury News

While Kaepernick’s contract isn’t up until next season, both the team and the player want to lock down a long-term extension sooner, rather than later.

The value of said extension, however, is still up in the air.  Ben Volin of the Boston Globe reported that Kaepernick is looking for Jay Cutler or Tony Romo-esque deals—somewhere in the vicinity of $18 million a season.  Kawakami has suggested that $15 million to $16 million is actually the floor here.

How much is Kaepernick worth, and how much will he sign for?  These are two different questions, so let’s try to break them down and work out Kaepernick’s true market value.

The major difficulty, of course, is determining how good Kaepernick actually is—a topic that divides San Francisco fans.  On the one hand, you have clear success in his first seasons, leading the 49ers to two NFC Championship games and a Super Bowl appearance.  He’s a threat with his arms and his legs and has flashed highlight-level ability in his short career.

Christian Petersen/Getty Images
The fourth quarter of the NFC Championship Game showed what Kaepernick still has to work on.

On the other hand, you have a player who’s only started for one full season and has never even achieved a Pro Bowl selection.  His 58.41 percent pass-completion percentage was 33rd in the league last season, for all quarterbacks with at least 100 attempts, according to Pro-Football-Reference.com.  He occasionally has trouble moving to his second read and has trouble anticipating coverages.  He still clearly has room to develop.

Just looking at his completion percentage, however, is misleading for two reasons.  First of all, Kaepernick averaged 7.69 yards per attempt last season, ninth-most in the league.  The fact that Matt Schaub or Sam Bradford completed a higher percentage of passes than Kaepernick is less impressive when Kaepernick’s average pass was more than a yard further downfield.

Secondly, you have to remember that for most of last season, Kaepernick was working with a heavily depleted wide receiver corps.  If we just look at games Kaepernick has started while Michael Crabtree was healthy, his statistical line improves:

Colin Kapernick's Stats with Michael Crabtree
Games Cmp Att Cmp% Yds TD INT Rating Rush Att Yds TD
Regular Season 12 207 333 62.2% 2,768 17 4 100.5 69 407 3
Playoffs 6 94 162 58.0% 1,374 7 5 87.3 51 507 4
Total 18 301 495 60.8% 4,142 24 9 96.2 120 914 7

Pro-Football-Reference.com

That’s still a small sample size, but it helps illustrate why Kaepernick’s statistical numbers were suppressed in the 2013 season—for the majority of the year, he was working without his full complement of talent. 

He’s not at that elite level yet where his raw talent can overcome that sort of deficit—he’s not Peyton Manning, Aaron Rodgers or Drew Brees—but that doesn’t mean he was as bad as his numbers made him look.

So, where does he fall in the hierarchy of quarterbacks?  He’s not in the top five—that’s space reserved for sure-fire future Hall of Famers like Manning, Brees and Tom Brady, as well as MVPs like Rodgers. You’d also have to say that Russell Wilson took a step past him this season, as both his numbers and highest level of success has surpassed Kaepernick’s.

Justin K. Aller/Getty Images
For now, at least, two Super Bowl rings outclasses Kaepernick.

Kaepernick also doesn’t have the track record of success that players like Philip Rivers or Matt Ryan have earned in their years in the league or the multiple championship rings of Ben Roethlisberger or Eli Manning.  Those players have shown their value over multiple seasons of work—something Kaepernick can’t claim at this point.

However, comparing him to the likes of Cutler or Romo, as in his contract demands?  That’s unfair to Kaepernick.  In 2014, the three players are likely to be somewhat similar in level of play—they’re all solid starting quarterbacks who can lead their teams to the playoffs, if surrounded by the right players.

However, Cutler’s turning 31 years old, and Romo’s turning 34—they’re not going to develop into a different kind of player overnight.  They’ve likely reached their peaks as players, while Kaepernick still has boatloads of potential.   

This is a contract for the long-term future of the franchise, and Kaepernick could make that move up to being a great starter as soon as 2014, leaving the Cutlers, Romos and Staffords of the world in his dust.

The 49ers will have to pay for some of that unrealized potential if they want to lock Kaepernick up over the long-term.  If they were to simply offer Kaepernick a contract that reflects what he’s done already on the field, Kaepernick and his agents would likely decline, opting to gamble on his continued development and then getting an even bigger deal next year.

Michael Conroy/Associated Press
The next wave of major quarterback contracts is coming, and these guys will break the bank.

With the salary cap set to skyrocket over the next few seasons, according to ESPN NFL Insider Adam Schefter (h/t ESPN.com), now is absolutely the time to lock Kaepernick up for a longer deal—before the next wave of contracts, led by Andrew Luck, redefine quarterback value once more.  Quarterbacks are going to see their contracts continue to skyrocket.

The 49ers are extending Kaepernick with the assumption he’ll continue to develop into a great starter.  If you agree with the 49ers that he will, and you think that Romo and Cutler are paid fairly, getting Kaepernick for one of their deals would be well worth the price—it might even look like a bargain in a few seasons.

Of course, you may not think Cutler and Romo are being paid fairly, and therein lies the difficulty in contract negotiations.  Cutler and Romo have the two largest cap hits among quarterbacks next season, well beyond their level of performance on the field.

Some of that, of course, is creative accounting—Romo’s cap hit is partially due to the Cowboys’ efforts to get under the salary cap last season, while Cutler’s cap number drops by $7 million next season and never again reaches the high point of this year.  In addition, the back years of both contracts are mirages—non-guaranteed money that can and will be re-negotiated as necessary.

Uncredited/Associated Press
This article is in no way an excuse to use this picture.

The contract that will be the most comparable to Kaepernick’s new deal sadly hasn’t been signed yet.  Cam Newton is in a similar place as Kaepernick right now—he’s another duel-threat quarterback coming to the end of his rookie deal. 

They were picked in the same draft class and have similar numbers so far in their career, on a per-game basis.  Whichever one signs an extension first will set the standard for the other.

In absence of that, we can look at some of the other recent quarterback extensions and try to figure out how they will compare to Kaepernick’s situation—in a contract negotiation, teams and players use other recent contracts as a starting point for negotiations.

Spotrac tried to break down Kaepernick’s potential contract value last month by doing just that—comparing recent deals and adjusting them for Kaepernick’s age and production.

First, the site looked at comparable contract extensions signed over the past few seasons, in order to get the market rate.  This includes the extension Joe Flacco signed after winning the Super Bowl last season, Aaron Rodgers’ record-setting extension, as well as the recent extensions for Matt Ryan and Matthew Stafford

Kaepernick fits rather snugly into the middle of that group—Rodgers and Ryan are probably better quarterbacks right now than Kaepernick, while I’d rather have Kaepernick than either Flacco or Stafford.

Here are those extensions:

Recent QB Extensions
Player Length Value Avg. Salary Guaranteed Age
Joe Flacco 6 $120,600,000 $20,100,000 $29,000,000 27
Aaron Rodgers 4 $110,000,000 $20,000,000 $20,000,000 30
Matt Ryan 6 $103,750,000 $17,291,666 $42,000,000 27
Matthew Stafford 3 $53,000,000 $17,666,666 $33,500,000 25
Average 4.75 $96,837,500 $18,764,583 $31,125,000 27

Spotrac.com

These are much better comparables than Cutler or Romo’s deals—all of these players have more potential to grow, simply because they’re younger.  Only Rodgers is already at the peak of his prime; the other three are still young enough that they could take another step forward.

Length-wise, Ryan and Flacco’s deals seem to be the most comparable—Kaepernick is only 26, so a long-term deal makes the most sense. 

It’s the average salary that's the most problematic—Flacco and Rodgers are getting paid like elite-level, top-of-the-line players at $20 million a year, while Stafford and Ryan are sitting at a more salary-cap friendly $17 million to $18 million.  That’s your ceiling and floor for your Kaepernick extension, right there.

The problem with simply taking the average of these deals—which Spotrac does and then adjusts for performance—is the Flacco-level outlier.  The other three quarterbacks are being paid roughly at their levels of performance, though Stafford's salary feels a bit high to me.

David Kohl/Associated Press
Joe Flacco's deal feels a bit too large.

Flacco’s numbers throw everything off, however.  If it was truly a $20-million-a-year deal, then he’d be making way too much money for his performance—he basically parlayed a fantastic postseason run into a best-of-the-best level contract.  

However, you can see that only $29 million of the deal was guaranteed—a lot of that salary comes from things like an insane $31 million cap hit in 2017—non-guaranteed money that will never hit the books.  He’ll either be extended or released well before that point.

With the somewhat bloated numbers, Spotrac spits out a six-year, $120 million contract—an average of $19.7 million a season, with more guaranteed money than any of the contracts listed.  That’s a tad on the high side, in my opinion.  It ignores the fact that Kaepernick has less than two years of starting experience and includes Flacco’s mirage of a contract as part of the baseline.

Instead, I look at Stafford and Ryan’s deals for comparisons here.  While $17 million to $18 million feels like a lot for a quarterback who's never won the big one, a look at the contracts around the league shows that that’s just the going rate for quarterbacks in that solid-to-great range.

The 49ers can further protect themselves financially by back-loading the contract, with some large, non-guaranteed base salaries at the end of the extension to boost the average.  Those are salaries that will be renegotiated and dealt with long before they’d ever hit the books, but that would allow Kaepernick to call himself an $18 million a year sort of player.

Gerry Broome/Associated Press
A rushing quarterback like Kaepernick may require some creative contract structuring.

You’re looking, then, at a decent signing bonus (spread out over the course of the contract) with low base salaries for the next few years—possibly with no increase in actual salary this season.  You’ll have a lot of the salary tied up in roster bonuses, giving the team an out if Kaepernick gets hurt—a real possibility for a rushing quarterback.

When the deal finally does come through, don’t pay attention to the average salary or the total value—look for the guaranteed money.  That’s all that’s “real” in these sorts of contract negotiations—that’s the money the team is on the hook for, no matter how well or poorly Kaepernick develops in the future.

Based on his lack of history, I’d expect the amount of signing bonus to be smaller than other recent signings—something around $20 million, perhaps with incentives guaranteeing more money if, say, the team wins a Super Bowl or Kaepernick makes the Pro Bowl or the like.  Keeping the initial value low is fair to the club, and giving Kaepernick room to earn more is fair to the player.

As for the overall value, I’ll take a shot in the dark. 

Six years, $110 million sounds about right, extending him through the 2020 season, at an average of just over $18 million a year.  With the salary cap shooting up, that would be a good value for the 49ers even if Kaepernick tops out in the Cutler/Romo range, failing to capitalize on his extensive potential.  If he does continue to develop, it could be an outright steal.

How much would YOU pay Colin Kaepernick per season?

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We’ll have to wait and see what the two sides eventually come to agree on, but a long extension with low guaranteed money seems fair to both the 49ers and Kaepernick.  With an extension, the 49ers will have a top-10 quarterback for the foreseeable future, the first step in any sort of roster construction.

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