The other day, Nick shared some thoughts about what might happen between Demaryius Thomas and the Denver Broncos. I shared a few thoughts there, but wanted to further examine the realities the Broncos are faced with in future seasons.
We know that John Elway has talked about how he wants to build a team that will win “now and in the future.” The problem many pundits and fans have is, when they talk about playoff contenders who have notable aging players, they drop the words “in the future,” as if all that matters is getting the aging players a Super Bowl ring at the expense of everything else. Dropping the words “in the future” is a dangerous practice, because that is how you harm your team in future years, and make it not only many years between Super Bowls, but many years between playoff trips.
It’s true that the Broncos have not always delivered their best games in recent playoffs, but the Broncos made the playoffs each year because they had teams that were built well. Everyone wants to win a Super Bowl, but if I were to tell you I could structure a team that could win a Super Bowl this year, but it would come at the cost of failing to make the playoffs in eight of the next 10 seasons, and be one-and-done in the two seasons the team goes to the playoffs, I would think most people would say it’s not worth winning the Super Bowl for that.
Knowing this, we have to think about what really allows a team to “win now and in the future.” It means that, while it’s OK to have aging players with high cap numbers in the short term, they can’t occupy that distinction for the long term. The long-term high cap numbers should go to players in the primes of their careers, and preferably spent on retaining first-round picks. Always remember that, when you draft a player in the first round, the expectation is that the player will be part of your long-term picture.
That mentality does indicate why the Broncos retained Ryan Clady at the salary he got. But it’s also why Broncos fans need to understand that it’s more important for the Broncos to retain Demaryius Thomas and Von Miller, than it is to keep DeMarcus Ware around next season at all costs. Keeping Ware while letting Thomas walk means you dropped the words “in the future” from Elway’s philosophy. Cutting Ware to keep Thomas and Miller means you are in “win now and in the future” as you have retained two players in the prime of their careers who were worth the first-round picks the Broncos spent on them.
Of course, it doesn’t absolutely have to come down to cutting Ware. Let’s look at a few considerations.
In examining the Broncos’ current cap situation, the largest cap hits in 2016 will be from Peyton Manning ($21.5M), Ware ($11.6M), Clady ($10.1M), Aqib Talib ($10M) and Chris Harris ($9M). Two of these players, Manning and Ware, are past their primes, even though they remain quality contributors. A third, Clady, has missed the bulk of the past three seasons because of injuries. To be a team that is built to win “now and in the future,” you cannot afford to keep both Manning and Ware when you have the likes of Thomas, Miller, Malik Jackson and Danny Trevathan up for extensions. And as much as we are concerned about the state of the offensive line, the only definitive reason to keep Clady around at that cap number is if every single player tried at left tackle this season falls flat on his face.
This doesn’t mean these players have to be cut outright. Ware, for example, could stick around if he takes a salary reduction to $4M, and gets it fully guaranteed in exchange for taking the cut, which reduces his cap number to $5.6M, a manageable number for a veteran rotational player who was elite in his prime. Clady could take a salary reduction to $5M, in exchange for making it fully guaranteed, which reduces his charge to $5.6M, an acceptable cap number that allows Clady to prove himself again, and let the Broncos determine if he should be extended. That’s a combined cap savings of $10.5M, which should be enough to accommodate extensions for Jackson and Trevathan. (EDIT: I originally had incorrect cap numbers, and have corrected those since.)
The question about whether or not to reduce the cap charges for Ware and Clady comes down to what Manning decides to do. If he retires, it’s best for the Broncos to simply release Ware or Clady, depending on what position they feel better about their depth.
As for the players the Broncos want to retain, let’s start with Thomas. His franchise tag commands a cap charge of $12.8M. A contract extension could reduce his cap charge, depending on what the signing bonus is. The other day, I suggested a $15M signing bonus, but looking at what the Broncos do, it seems more likely they’ll want a lower signing bonus than that. But there are still ways the Broncos can pay Thomas a high salary, yet still protect their cap situation in future seasons.
Knowing that the tag carries a cap charge of $12.8M, and that all draft picks have been signed, the Broncos can play around with a little more than $10M of space this year to accommodate Thomas’ deal. Here’s an example of how this could work.
I’m going to give Thomas a five-year, $70.5M contract, which gives him an average salary of $14.1M. Here’s how I’ll structure it so Thomas is looking at a possible $41.5M over the first three years, while the Broncos could get considerable cap space and cash freed up if Thomas’ performance sharply declined.
2015: $2M base salary, $6M signing bonus, $7M roster bonus due upon contract signing, all fully guaranteed. Cap charge is $10.2M (keep in mind the signing bonus is pro-rated over the first five years of the contract). The deal frees up $2.6M in cap space, increasing available space for 2015 to $9.4M. The Broncos spend $15M in cash this season.
2016: $13M base salary, guaranteed for injury only, becoming fully guaranteed if he is on the roster by the third day of the league year. The cap charge is $14.2M. If the Broncos cut him for performance-related reasons, they free up $9.4M in cap space with $4.8M in dead money.
2017: $13.5M base salary, same principle applies as in 2016. Cap charge is $14.7M. Cutting for performance-related reasons frees up $9.9M in space with $3.6M in dead money.
2018: $14M base salary, not guaranteed. Cutting Thomas frees up $11.6M in space with $2.4M in dead money.
2019: $15M base salary, not guaranteed. Cutting him frees $15M in space with $1.2M in dead money.
This structure gives Thomas the majority of the contract value, assuming he continues to play at a high level, while protecting the Broncos in case his performance sharply declines.
So what does that contract mean for 2016 cap space? Assume the Broncos extend no other players at this time. The Broncos carry over at least $9.4M in space, to the estimated $28.4M in space for 2016. Add the carryover, then subtract the 2016 cap charge for Thomas in the above example, and the Broncos still have $23.6M in cap space available. And that’s assuming a $150M cap, when it’s possible the cap could be slightly higher than that.
Also, bear in mind that it may be more than just the likes of Manning, Clady and Ware facing “what if” scenarios, this year and in the future. Andre Caldwell is on the roster bubble and, if the Broncos opt to go with younger receivers who impress in training camp, that’s $1.3M in extra space, because Caldwell has no guaranteed salary. Britton Colquitt may be sticking around, but if he keeps regressing, there’s no way the Broncos will retain him at a $4M cap charge in 2016. If Ben Garland proves his worth at left guard, it makes far more sense to keep him as a restricted free agent next season, while saying goodbye to Shelley Smith and clearing $2.2M in cap space.
There are a few other players whose deals expire after this season, but not all of them will command top dollar. David Bruton is a good special teams player, but such players are not going to exceed $2M per year. Or the Broncos could decide Omar Bolden can take Bruton’s place, and once again, he won’t get more than $2M per year for such duties. And while players like Jackson and Trevathan won’t take $2M per year deals, that doesn’t mean you have to pay them deals with double-digit cap charges, especially when there aren’t lots of people declaring them to be top-five at their position, as is the case with Chris Harris.
In other words, among pending free agents in 2016, only Miller is going to command a high cap charge, because he is viewed as top-five at his position. The others will be due raises, but not ones at exceedingly high cap charges, certainly not ones at double digits.
Thus, I do not believe it comes down to “Thomas or Miller, pick one.” There are far more factors in play here, and most of all, the factors need to come from Elway’s position of a team built to win “now and in the future,” not just “now.” Because that’s the difference between a team that keeps making the playoffs and one that keeps missing the playoffs.