Broncos’ Cap Clearing Considerations

We’ve discussed the likely moves the Broncos will make to clear cap space, and while a couple of moves seem to be locks (Peyton Manning’s departure, Britton Colquitt’s release), a few others remain up in the air.

I have previously discussed Ryan Clady and how his contract could be restructured to free some cap space. I suspect the Broncos will do everything they can to keep him on the roster.

But even if Manning and Colquitt are gone and Clady agrees to a restructure, the Broncos still need additional wiggle room if they are to accommodate the franchise tag for Von Miller and extensions for key free agents. So let’s examine scenarios that involve three other players who could come into play.

DeMarcus Ware: Because Ware will count for $11.6M against the 2016 cap, it’s clear his number must be reduced or he needs to be released. Ware has indicated he would like to return to the Broncos, but the question is what he is willing to do to help the Broncos’ cap situation.

The possibilities for Ware are:

* Release him to save $10M in cap space. That’s the most direct approach, particularly if the Broncos believe Shane Ray can step into the starting lineup.

* Have him take a pay cut. Ware is due $7M in base salary and a $3M roster bonus, the latter due on the fifth day of the 2016 league year. If he were to agree to a pay cut, it would need to be enough to make a difference in the cap, but I would go no more than half the total money due, reducing his cap charge to $6.6M. That amount of space cleared would go a long way to retaining other players.

* Extend him for one season. The Broncos could convert a portion of his base salary and the $3M roster bonus into a signing bonus, pushing part of the cap hit to the 2017 season. If this were to be done, I would convert no more than $5M total into a signing bonus. You would have to reduce his base salary, too, but you could make the base salary fully guaranteed. Reducing that to $2.5M and cap number to $6.6M. However, it would likely signal that 2016 would be his last year, because you would have to give him at least $10M in total salary for 2017, which would mean a cap charge of at least $12.5M.

(ETA: I miscalculated on the original extension suggestion. I believe an extension would have to include reducing his base salary for 2016 but make it fully guaranteed. I reduced the base salary to $2.5M, giving him a $6.6M cap charge.)

While I have leaned toward releasing him, if he is willing to do something to reduce his cap number or salary for 2016, I would be willing to retain him.

Louis Vasquez: He is entering the final year of his four-year deal, in which he is due a base salary of $5.5M and counts for a $6.75M cap charge. Vasquez is coming off a down year, in which he was fine in pass protection but had issues with run blocking, likely because he struggled with the zone blocking scheme. This begs the question as to whether or not Vasquez should return in 2017.

The possibilities for Vasquez are:

Release or trade him to save $5.5M in cap space. Any team who trades for him would only need to account for the $5.5M in salary, while the Broncos would eat the dead money hit of $1.25M. That’s why I think it’s possible to trade Vasquez, because his salary is fine for a starting guard who has demonstrated success in the past and might be a better fit for a different offense. If the Broncos do part ways with him, they need a backup plan in place.

Ask him to take a pay cut: While it would seem unlikely that Vasquez would accept this, we have seen John Elway able to get others to accept salary reductions when they were coming off down years or their cap numbers were getting too high. If the Broncos approach him about a pay cut, I would say a $2.5M cut would be enough, with the possibility of him earning back money through incentives. A $2.5M cut reduces his cap charge to $4.25M.

Extend him for another year: While I don’t expect this to happen, the option is there to consider. I would extend him no more than one year. If an extension happened, I would convert no more than $4M of his base salary into a signing bonus, which would reduce his cap number to $4.75M. The following year’s salary would be $6M, resulting in an $8M cap hit and signaling that he would be released after 2016.

What makes the most sense with Vasquez is to first determine what to do with Evan Mathis. If Mathis is willing to take a two-year deal for either $9M or $10.5M, it would be worth extending him and cutting Vasquez. At $9M, you would give him a $3M signing bonus with a $1M base salary and $5M in 2017, leaving him with cap charges of $2.5M in 2016 and $6.5M in 2017. Cutting Vasquez then gives you a net cap savings of $3M. At $10.5M, you would increase the signing bonus to $4M with a $1M base salary for a cap charge of $3M, leaving you with $5.5M due in 2017 for a cap charge of $7.5M. Cutting Vasquez then gives you a net cap savings of $2.5M. If Mathis seeks more than $10.5M over two years, it’s better to let him depart because you wouldn’t gain enough cap space by cutting Vasquez to justify a Mathis extension.

Assuming the Broncos don’t extend Mathis, they would have to consider free agent options if they plan to part ways with Vasquez. But they would have to be careful how much they commit to a free agent and make sure they keep his first-year cap number low. When Vasquez first signed with the Broncos, his 2013 cap number was $3.25M, so any free agent guard signed should not have a cap number higher than that. The Broncos don’t necessarily have to give a free agent a four-year deal like Vasquez got, but we must remember that Vasquez’s contract had a manageable cap number in the first year and, though it increased by $4M in 2014, it was worth it because Vasquez played at a high level.

Chris Harris: No, I am not proposing that the Broncos part ways with Harris. Instead, the Broncos can consider possibly restructuring his contract if they believe they can get certain free agents extended and need more wiggle room under the cap.

I will touch briefly upon Demaryius Thomas: I would not restructure his deal because you want to give the Broncos the ability to get out of the deal after 2017 and not compromise their situation in the future.

Harris’ deal, though, is one the Broncos could restructure, given that everything indicates he’s a player the Broncos will want to keep for a long time. While restructuring his deal would increase his cap number in the future, the Broncos could always part ways with Aqib Talib when his cap number rises, knowing they could extend Bradley Roby and Kayvon Webster to compensate for Talib’s departure.

If the Harris contract is restructured, I would push no more than $4M of his $6.9M base salary into a signing bonus. That applies a $1M dead money hit to 2016 and the three remaining years after and reduces his 2016 cap charge by $3M.

There are a couple other options the Broncos could consider to free cap space, which could give them some short-term cap savings but would mean committing to players for a longer period.

Extend Emmanuel Sanders: He’s been a dependable No. 2 receiver and enters the final year of his contract. If the Broncos want him for the long term, extending him now could reduce his $6.6M cap charge.

Extend T.J. Ward: He has two years left on his deal, but he has been very effective, his cap charge will be just $5.75M next season and there’s nothing to suggest he’ll suddenly decline next season. A one-year extension in which $1.5M of his $4.5M base salary becomes a signing bonus would mean just a $500,000 increase in his 2017 cap number, while reducing his current cap charge to $4.25M.

Cut Owen Daniels: If the Broncos are confident that Jeff Heuerman can be the starting tight end next year, they could cut Daniels now to save $2.5M in cap space. I wouldn’t expect that to happen, though, because Daniels played well down the stretch and his $4.5M cap charge isn’t too difficult to deal with.

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Bob Morris

I'm a sports writer in real life, though I've always focused on smaller communities, but that hasn't stopped me from learning more about some of the ins and outs of the NFL. You can follow me on Twitter @BobMorrisSports if you can put up with updates on the high school sports teams I cover.