Agent's Take: How Colin Kaepernick could still end up on the Broncos

Trade talks for the Denver Broncos to acquire quarterback Colin Kaepernick from the San Francisco 49ers have reportedly stalled. A major sticking point is Kaepernick's unwillingness to take a pay cut from his $14.3 million 2016 salary. The Broncos appear comfortable paying Kaepernick $7 million of his salary.

Kaepernick, who was given permission by the 49ers to seek a trade, reportedly met twice recently with Broncos general manager and executive vice president of football operations John Elway prior to reporting on Monday for the start of San Francisco's voluntary offseason workout program. By attending the program, Kaepernick preserves his ability to earn a $400,000 workout bonus, which requires participation in 90 percent of the workouts. Although Kaepernick is still recovering from knee, shoulder and thumb surgeries, supervised rehabilitation of injuries with the 49ers' trainer counts qualifies as participation under the workout bonus.

Kaepernick's contract

Kaepernick has five years and $89.2 million remaining on the six-year contract extension he signed in 2014 worth a maximum of $126 million. His 2016 salary consists of an $11.9 million base salary, which became fully guaranteed on April 1, the $400,000 workout bonus, and per-game active roster bonuses totaling $2 million ($125,000 per game). This per-game amount, which is in each year of the extension (2015-20), is only payable if Kaepernick is on the 46-man active roster for that particular game. When Kaepernick was put on injured reserve after nine games last season, it cost him $875,000, because he didn't earn seven games worth of roster bonuses.

Kaepernick's contract also contains a convoluted salary de-escalator of $2 million per year. His base salary for the following season doesn't decrease by the $2 million if he is named first- or second-team All-Pro by the Associated Press, or if the 49ers reach the Super Bowl while he plays 80 percent of the time in the regular season and playoff games leading up to the Super Bowl. Once Kaepernick reaches this threshold in a season, the de-escalator becomes void for the remainder of the deal. The lower base salary is already a part of his yearly salary cap numbers and valuing of his contract because de-escalation is being considered likely for cap purposes.

Who should compromise?

The 49ers, Broncos and Kaepernick all seem comfortable with a trade, but only on their terms. A trade isn't going to happen unless at least one party compromises.

There is a sentiment that Kaepernick should take a pay cut to facilitate a trade to Denver because playing with a great defense, a good running game and two dynamic wide receivers, Emmanuel Sanders and Demaryius Thomas, could give him the best chance to resurrect his career, even though his $11.9 million base salary is fully guaranteed. This really should an issue to be resolved between the two teams, because NFL players typically don't voluntarily give up guaranteed money.

More of the onus should fall on the 49ers. It is disingenuous for them to insist that they shouldn't absorb any of his salary in a trade because they would like to keep him on their roster. When a team is fully invested in a player, permission to seek a trade isn't granted like the 49ers have done with Kaepernick. For example, the Minnesota Vikings were adamant last offseason about keeping Adrian Peterson despite his demand to be traded or released. Peterson eventually relented when it became evident to him he wouldn't get his wish and shifted his focus to guaranteeing future salary.

The Houston Texans refused to entertain Andre Johnson's trade demand in 2014. In an effort to pressure Houston into accommodating his wishes, the seven-time Pro Bowl wide receiver withheld his services during the offseason, which resulted in him forfeiting a $1 million roster bonus due by the first game of the 2014 regular season. Johnson played the 2014 season with the Texans because his efforts were unsuccessful.

Kaepernick's remaining contract is reasonable for a starting quarterback. In 2015, the average yearly salary for a starting quarterback on a veteran contract was $17,283,333. Kaepernick's 2016 salary is also $700,000 less than the $15 million the Broncos paid a rapidly declining Peyton Manning during the 2015 regular season after he agreed to take a $4 million pay cut that was earned back through his playing time in the playoffs and Denver winning Super Bowl 50.

Will Colin Kaepernick eventually wind up in Denver? (USATSI)

Trade logistics

A team must have enough salary cap room to absorb a player's current salary in order to make a trade. Once the player is acquired, the new team can renegotiate or restructure his contract to decrease his cap number and/or salary.

Denver will need to trade or release players or restructure contracts to acquire Kaepernick even if he and/or the 49ers make concessions to facilitate the trade, because the Super Bowl champions are only $1.62 million under the cap. The most logical candidate to be released is injury prone left tackle Ryan Clady, who is expendable because of the signing of Russell Okung. Clady has a $10.1 million 2016 cap number. $8.9 million of cap space would be freed up by releasing him.

Thomas is a prime candidate for a contract restructure simply for cap purposes, which is uncharacteristic for Denver, because he has the biggest 2016 cap number on the team at $15.2 million. $9 million of cap space could be created by converting $12 million of Thomas' $13 million base salary into a signing bonus.

Teams aren't allowed to include cash or cap room in trades under NFL rules. The way around it, which was done when the Jacksonville Jaguars traded Eugene Monroe to the Baltimore Ravens in 2013, is for the team and player to restructure the contract before the trade by converting salary into signing bonus. It operates essentially the same way as including cash or cap room, because the acquiring team's cap hit for the player in the current league year is reduced. Eating salary in this manner could be a way for the 49ers to increase to the draft pick compensation received for Kaepernick.

This would entail the 49ers using their discretionary right to convert a portion of Kaepernick's base salary into signing bonus, which was built into the contract. Most lucrative contracts around the league contain a clause similar to this one.

Here's an example of how this concept would work with Kaepernick. If $4.9 million is converted to signing bonus, Kaepernick's 2016 base salary will drop to $7 million from $11.9 million. When the trade is made, this $4.9 million and the $7,397,260 million signing bonus proration from Kaepernick's contract, which contained a $12,328,766 signing bonus, would result in a $12,297,260 total charge on San Francisco's 2016 salary cap. The 49ers would gain $3,593,493 of cap room instead of $8,493,493 of cap space if this pre-trade restructure hadn't taken place. The lost $4.9 million in cap space shouldn't be an issue for the 49ers since they already have a league-high $53.08 million of cap room with Kaepernick's contract on the books. Denver's 2016 cap charge for Kaepernick would be $8.525 million ($7 million base salary, $400,000 workout bonus and $1.125 million of $2 million in per game roster bonuses).

Distraction potential

It may have made sense for the 49ers to excuse Kaepernick from the start of the workout program without him sacrificing his ability to earn the bonus until his situation is resolved to avoid any awkwardness. A tactic that has been used with varying degrees of success in the past to force a trade is players being a disruption to their current team. Kaepernick could give the 49ers a glimpse during the workout program of the type of negative effect he could have if he remains on the team. This may not be stretch for Kaepernick, considering he reportedly alienated teammates last year by being distant and aloof.

The workout program also provides Kaepernick a platform with the media to be critical of the 49ers. The comments could range from suggesting that the 49ers made a mistake in letting go of head coach Jim Harbaugh, who was Kaepernick's biggest supporter within the organization, instead of general manager Trent Baalke, expressing a lack of confidence in Baalke's ability to rebuild the 49ers, questioning the 49ers' lack of offseason moves to insisting there's an atmosphere of distrust with the organization that's beyond repair because of the handling of his injuries.

Chip Kelly doesn't have the same power with the 49ers that he had with the Philadelphia Eagles, but a surefire way out of town was making negative comments about him. Fortunately for the 49ers, Kaepernick is unlikely to take this approach, because he isn't media friendly.

Taking a pay cut

Kaepernick isn't inclined to take a pay cut, but these negotiations would be between Denver and Kaepernick's agent before the trade if he changes his stance. A salary reduction should be limited to the $2.4 million which isn't already fully guaranteed. Kaepernick should also insist that the team-friendly structure of his deal be addressed in the renegotiation. The annual $2 million of per-game roster bonuses could be converted into base salary in the remaining four years (2017-20) to make the money more certain while the contract remains in effect.

If Kaepernick gives up any guaranteed money, it should be in exchange for the Broncos voiding those final four years of the deal. The Eagles agreed to this with the remaining two years (2014 and 2015) of Mike Vick's contract in 2013 when he took a pay cut to remain with team. Kaepernick's contract would be a year-to-year proposition with the Broncos anyway, since his 2017 $14.5 million base salary and nearly half of his $15 million 2018 salary aren't fully guaranteed until April 1 in those respective years. An alternative that Kaepernick could propose if Denver has problem with shortening the deal is fully guaranteeing his 2017 base salary as a part of the renegotiation.

Regardless of the amount of the pay cut for the upcoming season, Kaepernick should have the opportunity to earn back the money given up through not-likely-to-be-earned incentives. Since Kaepernick only took 49.45 percent of San Francisco's offensive snaps last season (498 of 1,007 plays), the lowest playing-time threshold could be 50 percent.

Final thoughts

Kaepernick becoming a Bronco is still a possibility as long as another veteran quarterback, such as Ryan Fitzpatrick, Brian Hoyer or Josh McCown, isn't obtained. It wouldn't be a surprise if the Broncos and 49ers make a trade in the days leading up to the NFL Draft, which begins on April 28, or before the end of the first round. It remains to be seen who makes concessions to resolve the impasse.

Joel Corry is a former sports agent who helped found Premier Sports & Entertainment, a sports management firm that represents professional athletes and coaches. Before his tenure at Premier, Joel worked for Management Plus Enterprises, which represented Shaquille O'Neal, Hakeem Olajuwon and Ronnie Lott.

You can follow him on Twitter: @corryjoel | You can email him at jccorry@gmail.com

You can email him at jccorry@gmail.com.