The question posed to 49ers general manager John Lynch at the NFL Scouting Combine was a relatively simple one.
Will the 49ers, given the struggles of their interior pass rush in 2022, look into a big investment at defensive tackle?
“We’ll always put a focus on the quality of the player and the quantity,” Lynch responded. “But I think some of that has to come from player development. … You’d love to add a cornerstone for five years in there, but D-line — those usually happen when you’re picking second and you get a guy like (Nick) Bosa or you pay through your ears, you know? So we’ve got to be creative and come up with some other ways.”
Less than two weeks later, it became clear that Lynch was bluffing. On Monday, the 49ers splurged in the free-agent market, agreeing to terms with Javon Hargrave, the top defensive tackle available. Hargrave’s new four-year contract is worth up to $84 million over four years.
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49ers add Javon Hargrave as NFL's top defense gets even better
It turns out that the 49ers are willing to pay through their ears to add a cornerstone to the D-line, after all.
But there was technically some truth in Lynch’s words. He did mention the 49ers’ need to be “creative” and they’ve certainly come up with “other ways” of fitting Hargrave and other signings — headlined by quarterback Sam Darnold — into a crowded salary-cap situation.
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The team’s work is far from done — the 49ers have close to no 2023 salary-cap space at the moment— but they have made some surprising splashes and their financial gymnastics to reach this point are worth documenting.
Let’s examine how 49ers chief negotiator Paraag Marathe has made ends meet so far.
Hargrave’s deal: Big-time backloading
The star defensive tackle’s deal is worth $21 million annually, but only $6.6 million of that counts against the 2023 cap.
How the heck did the 49ers accomplish this? Details below come from Over The Cap. PRTD SB stands for “prorated signing bonus” and OTH BON stands for “other bonus” money.
*Fully guaranteed ($100,000 of 2024 “other bonus” money is also fully guaranteed)
Marathe managed this heavy backload through the dual-bonus mechanism, which he’d most recently utilized to keep Fred Warner’s initial financial footprint affordable during the cap-constricted 2021 cycle. By rule, signing and option bonuses are paid to players immediately but prorated over up to five years for cap purposes. The 49ers applied both types of bonuses to Hargrave’s contract to maximize short-term savings.
The prorated signing bonus bills (totaling $23 million, the full size of Hargrave’s signing bonus) are shaded in blue above, while the prorated option bonus bills (totaling $6 million) are shaded in green. Hargrave’s guaranteed option bonus doesn’t kick in until 2024, thereby allowing the 49ers to dodge cap damage from it in 2023, when space is most precious.
The 49ers also tacked two voidable years to the end of Hargrave’s deal. The first one, in 2027, allows for a full five-year proration of the signing bonus. The second one, in 2028, allows for a full five-year proration of the option bonus. All portions of the bonuses that are amortized beyond 2026 — a total of $7 million — are scheduled to accelerate and hit the cap as dead money in 2027 when the deal voids.
We’ll continue discussing voidable years further down, as they’ve become prominent cap-controlling tools in 49ers’ contracts awarded during this cycle.
Hargrave’s 2023 base salary is the NFL veteran minimum, $1.17 million, which is acceptable to him because the $23 million signing bonus is paid immediately. The defensive tackle’s base salaries are set to escalate in future years — especially in 2025, when no more bonus money is scheduled.
So here’s the math: $1.17 million vet minimum base salary + $4.6 million prorated signing bonus + $750,000 of total per-game roster bonus money + $100,000 workout bonus = $6.6 million 2023 salary-cap hit for Hargrave.
The deal totals $40 million of guaranteed money, all of which the 49ers will pay out over the first two years of the contract. Their first possible escape from the contract comes in 2025, when cutting Hargrave would save the team about $8 million but still cost $18.6 million in dead money. But the 49ers don’t mind this risk, one that’s naturally associated with backloading deals, because they need room now to fit Hargrave.
Heavy NLTBE incentives for Darnold
Surface-level terms for the quarterback’s contract — one year, $4.5 million with $3.5 million guaranteed — are rather modest for the former No. 3 pick who made more than $49 million over the five years of his rookie deal. And the 49ers needed them to be so that Darnold would fit snugly into their tight cap situation.
| Year | Base | PRTD SB | OTH BON | CAP |
|---|---|---|---|---|
Darnold’s 2023 hit, because a large share of his $1 million per-game roster bonus total is not likely to be earned (NLTBE), is only $3.9 million. Incentives are only deemed likely to be earned (LTBE) if a player achieved them the season prior, and because Darnold was hurt and inactive for 59 percent of the 2022 season with Carolina, only 41 percent of his per-game roster bonus total (about $412,000) is LTBE.
The formula for Darnold’s financial footprint: $2.45 million base salary + $1 million signing bonus + ~$412,000 of LTBE per-game roster bonus + $50,000 workout bonus = $3.9 million 2023 salary-cap hit.
But it took more than that for the 49ers to lure Darnold, who played the best football of his career over six games to close the 2022 season, to sign with them. His contract also includes up to $7 million of incentives based on play time, playoff qualification, QB wins and passer rating. The exact incentives are not yet public information, but because they aren’t counting against the cap, we can deduce that they’re NLTBE because Darnold didn’t attain them last season.
Still, Darnold signed a contract featuring this rather heavy incentive package, which can push the value of his deal up to $11.5 million for the season. That suggests he believes the marks are attainable. The 49ers will pay a 2024 cap charge for any NLTBE incentives that Darnold may reach in 2023, but the team is certainly fine with that — Marathe’s main task was to keep the QB’s price tag this year down.
So a heavily NLTBE incentive-based deal for Darnold did the trick of being appealing enough to both Darnold and the 49ers, thanks to the fact that such a large chunk of it dodged the 2023 cap.
Pinching 2023 pennies by maximizing void years
With the 49ers bumping the limits of the salary cap, every dollar matters — and the team seems to have taken that focus to new levels this offseason.
All teams must be under the cap by Wednesday’s start of the new league year, and Hargrave’s money actually put the 49ers over the limit on Monday. So the 49ers restructured the deal of cornerback Charvarius Ward to get back under on Tuesday morning.
Let’s outline Marathe’s mechanism here. The 49ers reduced Ward’s 2023 base salary from its original amount of $13.5 million to his veteran minimum of $1.08 million. They’d already included two void years in the original contract but added another one Tuesday, in 2027, so that they could maximize the proration length of the Ward’s newly-converted $12.4 signing bonus.
Ward now has two amortized signing bonuses hitting the 49ers’ books. The year in which only his original bonus hit is shaded in blue above. The year in which only his new bonus is scheduled to hit is shaded in orange. The years in which both of Ward’s bonuses are scheduled to hit are shaded in green.
The prorations spread through the void years of 2025-2027 are scheduled to accelerate and hit the cap as a $12.3 million lump sum of dead money in 2025 — unless the 49ers extend Ward before his deal expires after the 2024 season. In that case, they’d be able to maintain voidable future years on Ward’s deal as a tool to keep at least a chunk of cap hits in the future — when the team will theoretically have more spending space (thanks to increasing NFL revenues, the cap has grown significantly over the past two years and is expected to continue expanding).
Notably, the 49ers have — for the first time — employed the same voidable year strategy on smaller and shorter contracts.
Take offensive lineman Colton McKivitz’s new two-year deal, which features a $730,000 signing bonus.
The 49ers found it necessary to tack on four voidable years so that they could prorate McKivitz’s signing bonus against the cap over a full five-year term. That comes out to $146,000 per season. Without voidable years, McKivitz’s signing bonus bill would’ve cost $365,000 in both 2023 and 2024. With it, it costs only $146,000 annually. That’s $219,000 of savings on the 2023 cap for the 49ers.
Marathe’s strategy for the contract for safety Tashaun Gipson Sr., only a one-year deal, might be even more extreme.
The 49ers tacked on four voidable years to the short contract to ensure that only $200,000 of Gipson’s $1 million signing bonus would hit the cap in 2023. That’s $800,000 of short-term savings.
Combined with the $219,000 that they saved via voidable years on McKivitz’s deal, the 49ers have salvaged $1.19 million of 2023 salary-cap space via two short-term contracts. From afar, this seems like a nominal amount. But it’s also an unexpected amount. And we can surmise that Marathe is going out of his way to structure multiple contracts like this for a reason. The 49ers are trying to squeeze every ounce of efficiency out of the spending money that’s available to them.
It seems that at least one more contract restructure will be necessary for the 49ers to accomplish their offseason business. Still, it’s clear that Marathe wants to operate as sustainably as possible in the larger picture. Pushing too much money into the future can have painful effects, which has been evidenced by teams like the Rams, who’ve had to cut several prominent players to reach cap compliance.
The 49ers’ creative way of staying financially buoyant appears to be coming through minute contractual details. Strategically choosing fractions of 2023 cap payments and pushing them backward has indeed helped up enough room for at least one splashy signing so far.
It’s also generated intrigue about how the 49ers might shuffle money and spend next.
(Top photo of Sam Darnold and Javon Hargrave: Damian Strohmeyer / Associated Press)
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