On March 13th at 10am, the league year started and non-tendered players whose contracts expired were allowed to sign new deals with new teams. All the buzz for free agency resulted in pen to paper contracts, and as such, the details of these deals come out as well. We tend to simplify these into simple terms in many different ways: average annual value (AAV); total money vs. guaranteed money; signing bonus and yearly salary. But, in this simplification, we lose track of details and are often caught making moves on incorrect information! Don’t get duped by twitter reporting; learn to navigate through the misinformation being passed around. And by learning for yourself how to pick apart a contract yourself, you can react to the possibility of a player leaving a team before the news cycle reports on it.

Tevin Coleman’s new contract with San Francisco sent the fantasy world buzzing. . But, just a year ago, Jerick McKinnon signed a huge 4 year, 30M$ deal with nearly 12M$ guaranteed . Today, I’m hearing “Jerick McKinnon can be cut loose with no repercussions because he has 0$ more of guaranteed money,” there is reporting that “Mckinnon has 3.75M$ guaranteed for 2019,” and even more reporting saying that “cutting McKinnon will result in 6M$ in dead cap, more than it would cost to keep him for this year” (citations intentionally omitted).

All of the above is incorrect. Let’s break it down.

From 2018: Jerick McKinnon’s complex salary broke down into several pieces:

  • $2 million signing bonus.
  • $5.5 million roster bonus (guaranteed on the 5th day of the 2018 league year)
  • Annual per game roster bonus of up to $250,000
    Annual $50,000 workout bonus
  • Base salaries of $4.2 million in 2018, $3.7 million in 2019, $6.5 million in 2020, and a team option for 2021 base salary of $6.9 million (exercised before the end of the 2020 league year)

Each yearly base salary is guaranteed for injury, and is fully guaranteed on April 1st. This is important for two reasons. First, McKinnon is coming off of an ACL tear he might not be fully healed from. Second, on April 1st, if McKinnon is on the roster the team saves no money this year by releasing him.

The bonus structure has two interesting pieces: signing bonuses are prorated over the life of the contract, but the roster bonus is paid for being on the team’s roster as of that date.

The reporting saying McKinnon will cost $6 million in dead cap if cut before April 1st often stems from salary reporting on sportrac, where there is a $2 million figure applied to each year of the contract. Overthecap also has this, but with an explanation:
“I am treating McKinnon’s contract as if he received an additional $6 million signing bonus on top of his $2 million signing bonus. This is because the contract, in my opinion, violates the 50% rule in the NFL CBA.”

McKinnon’s contract is more complicated than what is being reported. The 49ers also ran into the 50% rule on the Jimmy Garoppolo contracy. The 49ers used this exact “roster bonus” trick to drop $28 million of the $35 million bonus he got at signing into the 2018 books to keep the future cap room free for new signings. Paraag Marathe front loaded both Garoppolo’s and McKinnon’s contracts due to the enormous amount of cap space San Francisco had to play with last offseason. So where does this bring McKinnon? Short answer: into the grey area . Does the “roster bonus” count into McKinnon’s “first year salary”? If so, the difference between his first year earnings and second year earnings is $5.75 million, which would be “treated as a signing bonus”. Because of the way signing bonuses are treated, this would be payable to McKinnon if he was cut at any point. However, the language in the rule states when the salary is less than half – in which case McKinnon doesn’t qualify.

Absent a ruling, we will not know if the 49ers will be on the hook a lot ($5.75 million), or just a little ($1.5 million) by cutting McKinnon. We also have a difficult task analyzing this information under the context of the 49ers stating they have huge designs in their offense for McKinnon, but also the signing of Tevin Coleman and the flexibility they attempted to build into McKinnon’s contract.

I embarked on this research hoping to arrive at a final concrete conclusion, but the situation is as murky as the current plans for the fantasy rich opportunity that is the starting running back in the 49ers backfield. I hope you at least learned to analyze and pick apart a contract. With this knowledge, I am a step ahead of league mates by knowing when a player’s “expiration date” is in his current situation before my the rest of league hears about it from the news cycle.