Richard Sherman was ahead of his time when he negotiated his own incentive-based contract with the 49ers in 2018.
There was a bit of skepticism directed towards Sherman when he acted as his own agent working out a three-year $27.1 million contract. His contract is heavily incentive based and gave the 49ers an out after the first season if he wasn’t healthy or things didn’t work out.
The cap hit if the 49ers decided to walk away from Sherman’s contract was only $2 million. If Sherman maxes out his incentives, he could make up to $39.1 million over his three seasons. Sherman bet on himself, which was a risky move coming off of his 2017 season ending Achilles injury.
Criticism towards Sherman, his contract and the negotiation is misplaced. Looking at 2019, the 49ers worked out several similarly incentive-based contracts with their free agent signings. Sherman actually saved himself money by avoiding paying a percentage to an agent.
Defensive lineman Dee Ford signed a five-year $85 million contract. When you look more closely at the contract, the team again protected themselves as his salary in his second season is not guaranteed until April 1, 2020.
Ford has several bonuses built into his contract for workouts, games played and making the Pro Bowl in each season. His contract could be interpreted as a one-year agreement for $19.75 million.
Linebacker Kwon Alexander’s four-year $54 million contract is also a prove-it based agreement. Like Ford, his salary for his second season with the 49ers is not guaranteed until April 1, 2020. He is coming off a season ending ACL injury and is planning on being ready for the offseason.
Alexander’s contract is ultimately a one-year $15 million agreement with several bonuses built in just like Ford.
Running back Tevin Coleman has the same April 1, 2020 trigger in his two-year $8.5 million contact. If he earns all of his bonuses he can earn a maximum of over $10 million. On the other hand, the team can walk away without consequences after the 2019 season with no cap hit.
Cornerback Jason Verrett’s one-year $3 million contract is only approximately half guaranteed. He has per game roster bonuses that total $1.5 million if he plays in every game. He is coming back from an Achilles injury that occurred on the first day of the 2018 offseason.
Long snapper Kyle Nelson’s four-year deal may be the safest for the team. None of his salary becomes guaranteed until three days after reinstatement from his suspension. If he does finish out the 2019 season with the 49ers, and the team decides to go another way in 2020, there is no cap hit for the team.
The April 1, 2020 date built into many of the contracts is important for the team. It gives them more than two weeks of free agency to evaluate their options if they so choose.
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Sherman not only benefitted by not having to pay an agent, he added specific bonuses into his contract. He receives $1 million for playing 90-percent of the season, $1 million for making the Pro Bowl and an additional $2 million for being named an All Pro.
It is not yet known if other players have similar additional incentives built into their contracts. Even if they do, the critics of Sherman's negotiating abilities should finally be silenced.