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:
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 keep his cap hit of $35.4 million in 2024 the same. They’d still be liable for $49.6 million in dead money in 2025 — which would 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 that’s less than his current $55.4 million 2025 cap hit.
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…
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