If they can't do an extension, they exercise the option.
You don't draft a QB in R1, have him sit 3 years, and trade away Rodgers to not give the guy a chance, and not get a long enough look to know if he's good. $20M for a starting QB is nothing in the NFL, with the way QB contracts are.
If they don't have him under contract next year, what is the plan at QB then? Starting a rookie would be dicey, signing Andy Dalton would be gross.