Today I Was able to confirm the full details of Alex Smith’s new $68 million contract extension with the Kanasas City Chiefs. Smith, as reported in numerous places, will receive an $18 million signing bonus and $1 million base salary in 2014 which will reduce his cap charge from $8 million to $4.6 million.
In 2015 Smith has an $11.9 million salary that is fully guaranteed for injury and in 2016 he has a $14.1 million salary that is also fully guaranteed for injury. Both salaries become fully guaranteed is he is on the Chiefs roster on the 3rd day of the 2015 League Year. I would consider that a virtual certainty.
In 2017 and 2018 he has non-guaranteed salaries of $10.8 and $14.5 million as well as roster bonuses of $2 million in each season and $500,000 in workout bonuses.
All in all this is a very good contract for Smith. Despite the lower annual value than the Tony Romo($18 million) and Jay Cutler($18.1 million) contracts, when we break this down into yearly cash flows the contracts are very similar.
The primary difference is that Smith gives up the three year value compared to the other two players but receives a similar cash payout to Cutler over the first two seasons. Smith will have a more difficult time earning the three year value of his contract than the other two players due to either contract structuring (Romo via restructures and void years) or extension timing (Cutler gained by not being extended last season).
What Smith will hope for is that the Chiefs tight salary cap situation causes them to restructure his contract in 2015 or 2016. My current estimates leave the Chiefs with minimal wiggle room next season and that is without Justin Houston under contract. Of course cap space can be created through releasing Tamba Hali or others, but if Smith is the guy they go to, then his three year salary will be almost fully protected through dead money protection.