He costs you "more" this year but you limit your risk in future years. If he comes up big, then you work it out.
So...it's becomes say a $3-3.5 million risk vs. guaranteeing $40+ million now.
$16 million now
vs.
$42 million guarantee
Difference
$42 - say $13 long term deal for year 1 = $29 still due if signed and busts
$16 - $13 for long term deal year 1 = $3 if franchised
As I see it, you take about $26 million off the "risk" table. There is a risk the other way if he has a mammoth year. I'll take that risk.