Breaking down 49ers CB Richard Sherman’s new contract

Friday, the Seattle Seahawks released All Pro cornerback Richard Sherman with hopes of bringing him back at a lower price tag. Saturday, Sherman spent the day negotiating with the front office of the Seahawks biggest rival, the San Francisco 49ers, and by the end of the day had secured himself a new contract.

Reports nearly immediately emerged that the contract was for three years and up to $39M with a $5M signing bonus, but specifics on the contract weren’t immediately reported. However, with the details now starting to come out, we can go ahead and start to take a look at the terms and see what the contract really looks like.

We already knew about the $5M signing bonus, so that’s not new. The $2M base salary is what one would expect, as the $5M signing bonus will represent a good portion of Sherman’s 2018 income so there is no need for a large base salary. It will be interesting to see if that base salary is guaranteed or not. I would suspect that it is, and if it is, then that would bring Sherman’s total guaranteed money up to $7M.

Stepping to the 46-man roster bonuses, these are simply the bonuses given for being active each game, so Sherman will earn $125,000 for each game for which he suits up during the 2018 season. In total Sherman can earn an additional $2M from the roster bonuses if he plays all 16 games.

I have not seen the details of the $1M in playing time incentives yet, but so taking a stab in the dark, I’d guess that it is $500k for reaching each of 80% and 90% of defensive snaps played. Keep in mind that is 100% speculation on my part, but I’m basing my guess on the $3M in playing time incentives that the last former Seahawk who acted as his own agent, Russell Okung, had in his contract with the Denver Broncos.

Lastly is the $3M incentive for making the Pro Bowl, which is pretty self explanatory. The only thing that would be important on this matter is if the Pro Bowl incentive pays out only if he is an initial selection to the Pro Bowl. However, that’s not a major issue at this point, and will not figure into calculating his 2018 cap hit, so I’ll skip bothering with it at this time.

Moving on to calculating his 2018 cap hit for the Niners, here is what a breakdown looks like.

The base salary should need no explanation. The prorated portion of the signing bonus is also straight forward - it’s simply the signing bonus divided by three since it is a three year contract.

To calculate the cap hit for the per game roster bonuses, we look at how many games Sherman was active for in 2017, and that number is nine. So, the estimate to be used heading into the season for the cap hit for the $2M in per game roster bonuses is 9 times $125,000, which equals $1,125,000. If Sherman ends up being active for fewer than 9 games, any extra charge recognized in 2018 would be added back to the 49ers cap in 2019. If Sherman ends up playing more than 9 games, an additional cap charge of $125,000 will be immediately recognized in 2018 for each game in which he is active.

Similarly, on the Pro Bowl incentive, since Sherman did not make the Pro Bowl in 2017, the Niners will not carry any charge for this $3M incentive in 2018. If, however, Sherman makes the Pro Bowl in 2018, the Niners will recognize that $3M incentive in 2019.

The playing time incentives are again speculation by me, but will follow the same formula used for the per game roster bonuses. If Sherman met those playing time thresholds in 2017, the Niners will account for them in their 2018 cap. If he did not, then they will not. So, if the playing time incentives are minimal, then Sherman’s 2018 cap hit could be as high as $5.89M. My guess is, however, that they are not minimal and that there will be no charge recognized heading into the 2018 season.

My wild speculation is based on the guess that the playing time incentives are likely there to reward Sherman if he ends up as a starter. If Sherman ends up as the nickelback or third cornerback, then he would likely be on the field for about 65-70% of the 49ers defensive snaps. That kind of snap count is not worth an extra $1M in incentives, but if he starts and plays almost all the team’s snaps, that would be worth the extra $1M. So, in short, at this point I have no idea what the actual playing time incentives are, and we’ll have to wait to find out.

In addition, there are vesting performance bonuses in the contract, as later reported on Twitter.

That vesting guarantee of $16M in base salary for 2019 and 2010 has been reported differently by different sources. In that tweet Tom Pelissero states the salary vests for making the Pro Bowl this season, while Ian Rapoport reported that the $16M in base become guaranteed if Sherman is an All-Pro.

In summary, we still need to find out the details of the playing time incentive, along with the specifics of the performance threshold for the vesting guarantees. I anticipate that those numbers are likely are likely to be reported in the next 24-48 hours, and as I’ll be here to keep all y’all updated on the developments in the free agency market this week, I’ll be sure to put that information up when it comes in.

In any case, before the ink on the contract even dried, I received multiple inquiries regarding my thoughts on the deal. Frankly, I think Sherman owes me some money because here’s what I put in writing about how the Seahawks should have handled the Sherman situation more than two months ago.

Outside of being completely wrong about the team extending Sherman, I was spot on regarding the structure of the contract. The contract Sherman signed with the Niners could easily be described as having minimal guarantees, while consisting of per game roster bonuses in an incentive laden contract with performance based vesting.

It’s a contract Seattle potentially could have secured with Sherman, and which would have carried a cap hit that would have freed up several million in available cap space for the team. In any case, it certainly appears as though the team is cleaning house on defense, and if the remainder of the offseason is anything like the last five days, 2018 could be extremely interesting.