Extreme Makeover: Salary Cap Edition – Denver Broncos

This is the fifth article in a six-part series looking at the teams who are currently projected to be $20 million or more in the red in cap space for 2024, and the path forward for them to get under the cap. 

The full list of teams includes: 

• New Orleans Saints: -$98.7 million
• Los Angeles Chargers: -$57.3 million
• Buffalo Bills: -$52.7 million
• Miami Dolphins: -$51.3 million
• Denver Broncos: -$26.8 million 
• Dallas Cowboys: -$21.4 million

While we don’t have a formal projection for the 2024 cap yet, it’s safe to say that number will end up north of $240 million, growing by more than $16 million for the second consecutive year.

Before we dive into the Broncos, here are some quick salary cap-related notes and definitions, as this can be a complicated subject. 

• Salary cap: The cap is the maximum any NFL team can spend on player salaries. Essentially, every team gets the same pie and can choose how to split it up, with various accounting mechanisms to manipulate how much cap space is available in any given year. 
• Dead Money: A term for money that has already been paid to a player and will count against a team’s salary cap no matter what. Most of the time this comes from signing bonuses, either from when a deal is initially signed or from restructures. When a player is cut, all the dead money remaining on their contract accelerates to the current year. 
• Restructure: An accounting trick teams can use to manage the cap in a given year. Signing bonus money is always prorated (spread equally) over the remaining years of a contract. That means teams can convert all but the minimum of a player’s base salary to a signing bonus and reduce the cap hit at the expense of increasing dead money in future years. 
• June 1 designation: Another accounting trick for teams — after June 1 when a player is cut the dead money is split over two years instead of all accelerating to the current year. Teams can designate two players per year as “June 1 cuts” and cut them before that date without the dead money hit, although they don’t get the resulting cap savings until after that date either. 
• Void years: Essentially “dummy” years that are added onto a deal, usually to help spread out the cap hits with restructures. They are not actual contract years that teams or players are required to fulfill. 

If you’re a visual learner like me, Over The Cap’s team cap calculator is a handy little tool to play around with and get a sense of how all of these terms and numbers shake out in real life. I leaned on it heavily when breaking down the cap situations and path forward for these teams. 

With the homework out of the way, let’s get into it…

Denver Broncos: -$26.8 million

This is going to be a massively important offseason for the Broncos that will dictate their trajectory for the next two or three seasons. In the first half of the season, Denver looked like one of the worst teams in the league. They started 1-5 punctuated by a defense that resembled wet toilet paper more than a functioning NFL starting 11. But that side of the ball got it together and Denver rattled off five straight wins, including victories over the Chiefs, Bills and Browns. 

Now the Broncos are 7-7 with games against the Patriots, Chargers and Raiders to close out the season. The good news is going 3-0 is attainable. The bad news is Denver has to get help from other teams in a crowded AFC wildcard field to avoid missing the playoffs even at 10-7.

That makes HC Sean Payton’s job even more difficult as he tries to chart a path forward. Because of the way Denver’s roster is constructed — headlined by QB Russell Wilson and his mammoth contract — the Broncos will be pushed toward either going all-in on competing or all-in on a drastic rebuild. With the 2023 season still in the balance, things could swing dramatically either way by the time the offseason starts. 

What To Do With Russ?

Figuring out the direction of the 2024 and beyond Broncos will start with figuring out what to do with Wilson. Payton has been able to get far more out of Wilson than previous HC Nathaniel Hackett in the disastrous 2022 season. He’s thrown 24 touchdowns to eight interceptions after having only 16 scores and 11 picks. His completion percentage would be the third-best mark of his career and he’s added another three touchdowns on the ground. 

But this present version of Wilson looks a lot more like an average quarterback than the player who was an MVP candidate for most of the 2020 season. His yards per attempt has dipped and he’s not nearly as dangerous a runner as he was as recently as 2020. Pick your favorite catch-all QB stat, whether it’s QBR, adjusted net yards per attempt, PFF grade or EPA per play. All of them have Wilson closer to the middle of the pack than the top, which is a change from the better part of his career. 

The eye test says the same thing. Payton has built an offense almost exclusively around running the ball and either taking a deep shot or checking it down in order to maximize what Wilson does well at this stage of his career and minimize what he doesn’t. Not to dip too far into the game manager/game changer discourse, but Wilson has gone from a game-changer at his peak to a player who is probably best served as a game manager at this stage. 

This wouldn’t be so bad if Wilson weren’t being paid like an elite quarterback. Here’s a look at Wilson’s contract via Over The Cap: 

The most important thing to note here is Wilson’s entire $37 million base salary becomes guaranteed on March 21 of this coming year. That means if Denver commits to keeping Wilson for 2024, they are basically committing to him in 2025 as well because they’ll be paying him no matter what.

If he gets hurt, regresses or falls off the age cliff in 2024, the Broncos could technically cut him with a June 1 designation and carry his $55.4 million cap hit in 2025, plus another $40 million-plus in 2026. But all that does is prevent their cap from being absolutely nuked in a single year with a $95 million dead money charge. 

The Broncos could avoid all this by cutting Wilson with a June 1 designation this offseason, which would split his massive dead money between two seasons. Denver would still shatter the NFL record of just over $40 million set in the last two years by the Falcons and Packers when they traded Matt Ryan and Aaron Rodgers — but it’d be less than they’d owe him otherwise. 

Another way to think of it is Denver can exit the deal now with Wilson counting $85 million on their books over the next two seasons or keep him and commit to him counting $122 million over three years. There are no good options, but the first option is less bad. 

That’s why there are still persistent questions about Wilson’s future in Denver despite his improvement from 2022 to 2023. Had he returned to the peak form of his late 20s and early 30s, it would have been much easier to justify the level of investment required from the Broncos moving forward, even if questions would have remained about the wisdom of signing on for well over $100 million for the twilight years of a quarterback who’s already 35. 

The current version is less inspiring but it also has to be weighed against the Broncos’ other options. Wilson will count tens of millions against the cap no matter what. That will impact Denver’s options to replace him, and there’s no path to an obvious replacement in the draft right now. 

That’s why it feels like Payton and the Broncos face a fork in the road this offseason: either double down on Wilson and try to do whatever they can to remain competitive in the next two seasons, or kick-start a rebuild that would be deeper in some ways than what Payton has ever deal with, even in his first year with the Saints. 

Thinking Outside The Box

I don’t know how Payton feels about Wilson after a season of working closely with him. I’m sure he’d even acknowledge it’s a complicated decision for the reasons we’ve just discussed. But I can more confidently say that whatever Payton decides, he’ll have no problem being aggressive or unconventional. And he’ll do whatever he can to avoid losing. 

For that reason, I doubt the Broncos embark on a full-scale tank, even if they do decide to move on from Wilson. That’s not to say they won’t move on from some big-name veteran players but I think that will have more to do with their projected performance going forward than it will re-accumulating assets. 

Instead of accepting a binary choice, I think the Broncos and Payton could try to get creative with Wilson instead and negotiate a compromise. A pay cut would certainly do the trick, but it might not have to go that far. If Wilson agreed to give up his injury guarantee in 2025 in exchange for not being cut this offseason, it could allow the two sides to continue their partnership another year. Payton doesn’t have to find a replacement for Wilson while still paying him in 2024, while Wilson doesn’t have to start fresh with a new team and coach late in his career. 

Wilson has shown in the past he’s conscious of his legacy, so the chance to continue working with Payton could be valuable for him. Removing the guarantee also turns down the pressure on the Broncos to consider the 2025 season when making this decision, and could allow 2024 to be about 2024. 

If Payton decides that moving on from Wilson and trying to find a higher-ceiling, cheaper option is the best thing for the team, it’s not a given that cutting Wilson would trigger a full-scale rebuild. We’ll get into the exact numbers below, but basically instead of restructuring a bunch of contracts to build around Wilson, Payton could reallocate those cap dollars to try and find a replacement or invest in building the team up around the next quarterback. 

Maneuvering around Wilson’s dead money would come with a lot of challenges, and the Broncos won’t have their full allotment of draft picks until 2025 following blockbuster deals to acquire Wilson and Payton in back-to-back offseasons. But despite the challenges, it feels more likely to me that Payton tries to go out swinging rather than just accepting that his hands are going to be tied behind his back for two years. 

Rest Of The Roster

One way or another, the team has to shed salary to get under the cap in 2024. The two easiest moves will be cutting WR Tim Patrick and DT D.J. Jones to save $10 million each. Patrick tore his Achilles this summer after missing all of 2022 with a torn ACL. Jones was signed to be a run-stuffing nose tackle but his production so far likely won’t persuade the Broncos to turn down $10 million in savings. 

It will be interesting to see what the Broncos do with S Justin Simmons and LT Garett Bolles. Both are older and in contract years; Simmons will be 31 and Bolles 32 in 2024. Both are still solid players, but the cap savings from moving on are hard to ignore. Cutting Simmons would free up $14.5 million, while cutting Bolles would add $16 million in space for 2024. In both cases, that sum is nearly all non-guaranteed base salary, so trading those veterans at that cost would pose some challenges.

My hunch is Simmons is in greater danger of being cut than Bolles, as he plays a position considered less of a premium than left tackle. While Simmons was considered a top two or three safety not that long ago, Bolles has been the better of the two this year. Bolles plays a position that ages better in theory, too. If the Broncos try to stay competitive, he’s an extension candidate to lower his cap hit. If Denver rebuilds, he’s a player who should have some trade value despite his salary because of the shortage of quality left tackles around the league. 

The dichotomy with Simmons is simpler — if the Broncos hit the reset button, they’ll cut him, and if they try to contend, they still might cut him if he doesn’t want to take a pay cut or rework his deal in some fashion. 

At one point, WR Courtland Sutton seemed like a potential cap casualty, but he’s responded with a strong season and has been Denver’s clear No. 1 receiver. He has 10 touchdowns this season, with multiple highlight-reel grabs. The Broncos might still be willing to listen to trade offers but Sutton’s age (he turns 29 next October) and base salary ($13 million) could continue to depress his trade value. 

Denver could save another $5.5 million by cutting CB/KR Tremon Smith and RB Samaje Perine but both were Payton-fueled signings last year and don’t have major cap hits, so it’s just as likely they stay. 

Outside of cuts, the Broncos have other options to create cap space via restructures, which Payton is no stranger to from his time with the Saints. Denver’s three biggest free agent signings from this past offseason — DL Zach Allen, RT Mike McGlinchey and G Ben Powers — all have guaranteed base salaries in 2024 that can be restructured. 

• Allen: $9.4M savings
• McGlinchey: $10.4M
• Powers: $7.2M

In total, the Broncos could add $27 million in cap space by restructuring this trio. If the Broncos keep Wilson, it’s likely they have to restructure these three contracts to create as much cap space as possible to build on this season’s record. 

Other restructure candidates include Sutton and LB Alex Singleton, with possible savings of $5.9 million for Sutton and $2.1 million for Singleton. They could even restructure Wilson’s contract if they decide to keep him, as his $17 million base salary is already guaranteed. Restructuring it would save $12.6 million this year and would not materially change their dead cap obligations in the grand scope of how much they already owe him. 

It’s also worth discussing Broncos WR Jerry Jeudy, who will be in the final year of his rookie contract and set to make just under $13 million on his fifth-year option in 2024. Denver could save that full amount by trading Jeudy, who has been a hot name in trade rumors dating back to the 2022 trade deadline. He’s failed to break out this season with 45 catches, 581 yards and just one touchdown in 13 games. 

It would seem like a no-brainer decision to trade him and add a pick, particularly given the reports that Denver had a Day 2 pick on the table earlier this year. But all their decisions such as exercising his option in the first place and turning down trade interest suggest they’re a lot higher on Jeudy’s potential than his current track record of production might seem to warrant. It’ll be interesting to see if that changes this coming offseason. 

Building The War Chest

Here’s what the plan of attack for the Broncos could look like this coming offseason. 

• Cut Patrick, Jones, Simmons and Smith for $37 million in savings. 
• Restructure Allen, McGlinchey, Powers, Sutton and Singleton for another $35 million in savings. 
• Extend Bolles and lower his cap hit, let’s say by $10 million. 
• Total effective cap space: $55 million

Keeping Wilson and restructuring him would add more than $12 million to that total. Denver could make a lot of noise in free agency with that much cap space, which they might have to do. They own their first-round pick this year, which at this point is slated to be in the late teens, but are missing their second and have only one third among just five total selections. 

Denver’s list of pending free agents is manageable, with C Lloyd Cushenberry probably the headliner. Veteran S Kareem Jackson, LB Josey Jewell, S P.J. Locke and K Wil Lutz round things out but no one is either irreplaceable or too expensive to re-sign. 

The biggest and most interesting decision the Broncos have to make is with Wilson. That’ll be the first domino that will set off a long chain reaction — and with Payton at the helm, Denver can never be counted out from making a splash.