Justin Smith has $2.1 million in unearned signing bonus money

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When 49ers linebacker Chris Borland retired in March, he agreed to repay $463,077 in unearned signing bonus money. With 49ers defensive lineman Justin Smith retiring in May, he has more than $2.1 million in unearned signing bonus money.

Specifically, the final year of Smith’s contract carries a signing bonus allocation of $2.186 million, arising from the $6.56 million signing bonus paid to Smith in 2013, when he signed his current deal.

Under the Collective Bargaining Agreement, the 49ers can choose not to pursue repayment. The circumstances of Smith’s most recent deal indicates that perhaps they shouldn’t. In 2013, Smith previously was due to earn a base salary of $7.5 million. To reduce his cap charge from $8 million to $3.72 million, Smith agreed to reduce his base salary to $940,000 and to take the rest as a signing bonus.

It’s possible the 49ers would have simply cut Smith if he’d balked. Nevertheless, Smith agreed to a deal in which the team got the benefit of extending his contract by two years and creating significant cap savings in 2013. Smith, in turn, received $6.56 million up front.

And that’s the one potential drawback for players who agree to restructure contracts by converting base salary in the current year to signing bonus payments. If the player thereafter retires, he’s potentially on the hook to pay back millions. Still, requiring a player to pay back a chunk of the money he would have earned under his prior contract could make it harder for teams to persuade future players to agree to similar deals.

11 responses to “Justin Smith has $2.1 million in unearned signing bonus money

  1. $2.1 mil to escape the Niners? What’s the “ransom” to leace Cleveland? $10 mil?

  2. The Niners should let him keep the money – he earned it. They should also hire him as a DL coach. As a Cowboys fan, I wish he was part of the Dallas line.

  3. 2 million is a small sum for the team let go for how he played for them. I realize it is a business, but not all employees are equal in the effort given, and it would be a shame if they went after him for the money.

  4. The money is not the issue. Cap space is. To maximize cap space, the Niners would likely demand a return of the bonus. Besides, it is his decision to retire, knowing full well that he has to return part of the signing bonus.

  5. The contract in cases like this should contain language that keeps any salary disguised as a signing bonus exempt from being reclaimed by the club.

    Otherwise, the agent is not doing a good job.

  6. Umm Justin earned that money and to say otherwise is bunk! If he would have earned 7.5 mil but agreed to take 975k in base and the rest in bonus then he got what he would have earned if not for restructuring. So get outta here with that 49ers should make him pay. We already look like a joke our OC is named Geep and pursuing Justin would make us look like clowns.

  7. Either let him keep it or have him pay it back for cap reasons and then just cut him a check for the same amount for a speaking fee or something.

  8. This illustrates the problem with the NFL’s conditional work agreements. To me, these aren’t really a contract. It’s the NFL telling a player, “We’ll pay you thus-and-so until we change our mind. Don’t like it? Find another club.”

    The NFLPA should insist on guaranteed contracts like the NBA and MLB. Then, it’s a crap-shoot for both players and clubs. If a player pans out, good for the club and player. If not, too bad. You pays your money and you takes your chances.

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