49ers: Contract implications of RB Jerick McKinnon’s season-ending injury

49ers salary cap implications

If San Francisco releases McKinnon prior to the end of his 4-year contract, the team will incur a minimum of $500,000 in dead money — the prorated portion of his $2 million signing bonus — in each season from his release to the end of his contract.

The 49ers could potentially incur additional dead money each season, depending on the interpretation of a specific subsection of the NFL’s 2011 Collective Bargaining Agreement, referred to by Jason Fitzgerald as the “50 percent rule” in his 2016 book on the NFL salary cap and contract negotiations, “Crunching Numbers.”

Article 13, Section 6(b)(iii)(5) of the NFL’s 2011 CBA states, “The difference between the Salary in the second contract year and the first contract year when Salary in the second contract year is less than half the Salary called for in the first year of such Contract” should be treated as a “signing bonus,” and therefore prorated over the life of the contract.

The 50 percent rule — or “50/50 rule” — was a topic of discussion during Sports Illustrated’s Albert Breer’s February interview of Marathe, regarding the new contract of 49ers quarterback Jimmy Garoppolo:

"“Marathe said he’d have put even more into Year 1, if not for the little-known 50/50 rule, which compels teams to make the Year 2 cap figure at least 50 percent of the Year 1 figure.”"

While McKinnon’s “Paragraph 5 Salary” — his base salary — along with his per-game roster bonus and his workout bonus numbers are fairly comparable over the first two years of his contract, if you add McKinnon’s one-time $5.5 million roster bonus to the equation, the 50 percent rule would be triggered.

If the one-time roster bonus is used to trigger the 50 percent rule, then the approximately $5.8 difference between McKinnon’s “Salary” in 2018 and 2019 would be treated as a signing bonus, and thus prorated over the life of his contract.

Since we’re travelling in somewhat uncharted waters, there is some debate on the issue. While on its face, it appears McKinnon’s contract triggers the 50 percent rule, Marathe appeared to structure McKinnon’s contract so the one-time $5.5 million roster bonus would not be prorated over the term of the deal.

Although interesting from a salary cap management perspective, in the end, McKinnon’s salary cap figures will merely become an accounting issue. The 49ers have ample cap space this season, and would be able to roll over any cap savings they receive in order to compensate for cap space lost in future seasons.

Provided he returns to full strength from his knee injury, running back Jerick McKinnon will be back with the San Francisco 49ers in 2019, but will have to prove himself during the season in order to secure a roster spot in 2020.