Days after Colin Kaepernick's $11.9 million salary became guaranteed last week, the quarterback met with Denver Broncos general manager John Elway for the second time. The other occurred last week around the time of the annual meetings. The conversations between Elway and Kaepernick have helped them get to know each other, but also included talk of his contract. Per a source informed, no major issues were worked out or finalized.
The Broncos and 49ers do not have a deal in principle on a Kaepernick trade. The Niners, who are more than comfortable keeping Kaepernick, would like a second-round pick for him, especially because all the Broncos picks are at the end of the round. The Broncos view him as worth a fourth-round pick, though they do not currently have one.
While there is no deal in place, both sides believe one could be worked out if the other moving parts are in order. A potential further sweetener could be offensive tackle Ryan Clady, who will be cut or traded by the Broncos. Clady would also need to reduce his $9.5M salary -- if he's willing to. It is unclear how interested the Niners are in him, but Denver would have to part ways with him one way or the other if they acquired Kaepernick. Denver is up against the salary cap, and would have to make several moves in order to fit Kaepernick in, either way.
In order for Denver to acquire Kaepernick, he will need to take a pay cut like other backup/starter hybrids such as Robert Griffin III (2 years, $15M) or Chase Daniel (3 years, $21M). The price the Broncos set is for $7M for 2016, which means either Kaepernick would have to agree to a pay cut instead of more than $14M mostly guaranteed for the Niners, when you include base and incentives. Another option would be if San Francisco took on the $7M in exchange for a better draft pick, but they have not been willing to do that yet, either.
The Kaepernick potential pay cut is the main issue at this point holding back the deal, but there are other significant obstacles, hence why a deal is not imminent. A significant breakthrough is needed for a deal.
Denver can also create a lot of cap space (more than $19 million) by exercising automatic conversion clauses in the contracts of guys like Demaryius Thomas, Aqib Talib and Chris Harris. If the Broncos restructure the deals of Harris and Thomas, it would create $13.785 million in cap space this year, but increases their cap hits in subsequent years. It is automatic, so the players wouldn't have to be consulted. The Broncos also don't have to give them any cash up front. Whatever salary the team converts to a signing bonus is paid out in 17 weekly installments during the regular season.
The Niners offseason workouts program begins Monday. If Kaepernick participates in 90 percent of the program, Kaepernick will receive a $400K bonus. The expectation is that he shows up, and would be welcomed into the facility. But nothing is certain. Some believe once he shows up, that either delays a possible trade until the draft or makes it moot altogether.
When new Niners head coach Chip Kelly was with the Eagles, he had some in-depth discussions about trading for Kaepernick, per someone who was part of those talks. Obviously, it did not end up going through, but it was seriously considered. It is one reason why Kelly is more than open to Kaepernick earning the starting job come training camp -- he hasn't officially been named the starter and would have to beat out Blaine Gabbert.
If the Broncos don't grab Kaepernick, other possibly options are: Brian Hoyer, Mike Glennon or Josh McCown, all of whom are cheaper. Hoyer is available in a trade, or the Texans could release him. Glennon's price will be higher, but the Buccaneers haven't ruled out dealing him. McCown will either be cut or traded. The Jets would also be interested in Glennon, Hoyer or McCown if they don't do a Fitzpatrick deal. The Jets made a play for Hoyer two years ago.