The 5 O’Clock Club: How long will Alex Smith be a Redskin, based on his contract?

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The Alex Smith contract details according to OverTheCap:

Alex Smith was traded to the Redskins on March 14, 2018. Smith signed a four year contract extension with the Redskins on March 16, 2018 worth $94 million in new money. Per Albert Breer, Smith will receive a $27 million signing bonus and $55 million is guaranteed at signing. If on the roster on the 5th day of the 2019 league year, Smith’s 2020 $16 million salary will also become fully guaranteed.

The Redskins, when they gave Smith the extension, converted $4m of the 2018 pay from his existing contact into signing bonus to reduce the 2018 cap hit. The savings can be used now or rolled over into future years to be used as needed.

Let’s look at the total cost, average-per-season cost, and incremental cost of the Alex Smith contract is at the end of each contract year:

If Alex Smith plays only one season with the Redskins:

• signing bonus: $27m
• 2018 salary (guaranteed): $13m
• 2019 salary (guaranteed): $15m

Total cost of contract: $55m

Cost per year: $55m

Incremental cost of the 2018 season: $55m

If Alex Smith plays two seasons with the Redskins:

• guaranteed at signing: $55m
• 2020 salary (guaranteed March 2019): $16m

Total cost of contract: $71m

Cost per year: $35.5m

Incremental cost of the 2019 season: $16m

If Alex Smith plays three seasons with the Redskins:

• guaranteed at signing: $55m
• 2020 salary (guaranteed March 2019): $16m

Total cost of contract: $71m

Cost per year: $23.66m

Incremental cost of the 2020 season: $0m

If Alex Smith plays four seasons with the Redskins:

• Total guaranteed money: $71m
• 2021 salary: $19m

Total cost of contract: $90m

Cost per year: $22.5m

Incremental cost of the 2021 season: $19m

If Alex Smith plays five seasons with the Redskins:

• Total guaranteed money: $71m
• 2021 salary: $19m
• 2022 salary: $21m

Total cost of contract: $111m

Cost per year: $22.2m

Incremental cost of the 2022 season: $21m

Analyzing what this means

This contract means that the Redskins are definitely married to Alex Smith for 3 seasons, barring some kind of catastrophic event in 2018.

At this time next year, Alex will be guaranteed $71m on this contract.

If you look at the last line in each section, the “incremental cost”, you’ll see that Alex earns $55m this season by simply showing up, $16m in the 2019 season, but, in effect, plays the 2020 season for free. Whether he plays two seasons or three seasons, he gets the same money from the Redskins, so they won’t cut him prior to the end of the 2020 season.

What decisions face the Redskins in 2021 and 2022?

The incremental cost of sticking with Alex Smith in 2021 is $19 million.

The incremental cost of sticking with Alex Smith in 2022 is $21 million.

In other words, in each of those two seasons, the question the Redskins have to ask themselves is simply whether there is a better quarterback value available than a 37 year old Alex Smith for $19m, or a 38 year old Alex Smith for $21m, that also fits in the available salary cap space.

It’s that simple. Those two numbers ($19m salary in 2021, $21m in 2022) are really the only variables in this 5-year contract.

The Alex Smith deal is a set-in-stone three-year deal for $71 million.

It has, in practical effect, two “option years” with set prices of $19m and $21m.

Alex Smith will be paid to be the Redskins starting quarterback for three years at an APY of $23.66m. In the fourth and fifth years of the contract, the team’s options are wide open; they can play him as the starter, trade him without penalty, or cut him. If they cut him, the only time to do it will be in 2021, and the only decision will be whether or not to designate him as a post-June 1st cut. If he is a post-June 1 cut, then nothing about his contract will change from how it stands today, except that the 'Skins won't pay him his final 2 years' salary; they will pay a different QB instead.

In fact, by the time we get there, it’s not crazy to think that $40m for 2 years might make him affordable as a backup to a young player on a rookie deal.

So, Alex Smith is a Redskin for the next three seasons. After that, anything is possible.