Examining A Possible Von Miller Extension, May 2016 Edition

With the draft now over, the Broncos front office, like most of the NFL, will likely be eager to take a bit of a vacation as they approach the dead part of the NFL offseason. However, whenever they get back to work the next task on the plate will be possible extensions of veterans, and none loom bigger over the Broncos than Von Miller.  So with all that’s changed since I last addressed the subject, I thought I’d dump some thoughts on where this negotiation stands now.

There had been some barbs traded in the press last month that Miller was looking for $22 million per year, while the Broncos have him pegged at $18 million APY.  Those reports weren’t surprising to me all as part of the negotiating game.  $22 million APY was likely thrown out by Miller’s camp to set a “compromise” at $20 million APY that would still break the Ndamukong Suh ceiling of just above $19 million APY.

Now, Miller’s still going to have to accept, for reasons I’ve stated before, that Suh’s deal is an anomaly.  Demaryius Thomas had to accept the same for Calvin Johnson, who by the way is now retired.  Miller has to also be careful not to overplay his hand, lest he wants to find himself in franchise tag purgatory for the next two seasons.  As I’ve hinted at before, if the Broncos were to place the franchise tag on him in two consecutive seasons, those numbers would be at $14.129 million and $16.9548 million, for an APY of $15.54 million.  That’s far less than even the lowest number for the Broncos.  Furthermore, after those two years Miller will be 29, and then the league will start to wonder when he will start to be past his prime.

Now, I’m not advocating that the Broncos play that hard of a ball with Miller–you want to treat your Super Bowl MVP well.  Thus, the olive branch I’d hold out to resolve the difference would go as follows.  There are two key numbers to any veteran contract: APY (average per year) and fully guaranteed money.  I’ll allow Miller to beat out Suh ($19.0625 million APY, $59.955 million fully guaranteed) in one of those categories, but not both.  For the other category, Miller has to settle for second best (currently, for APY it’s $17 million (Olivier Vernon, and for full guarantees it’s $42.9 million (Marcell Dareus)) This allows Miller’s camp to crow about a record-breaking contract, while still giving the Broncos what they want to stay financially healthy.

Below, you’ll find a couple sample contracts in which either approach is taken.

Contract A: The APY record breaker

Year Base Salary
Prorated Bonus Cap Number Dead Money Cap Savings
2016 $10,000,000 $4,000,000 $14,000,000 $47,000,000 ($33,000,000)
2017 $17,000,000 $4,000,000 $21,000,000 $33,000,000 ($12,000,000)
2018 $15,000,000 $4,000,000 $19,000,000 $12,000,000 $7,000,000
2019 $15,000,000 $4,000,000 $19,000,000 $8,000,000 $11,000,000
2020 $19,000,000 $4,000,000 $23,000,000 $4,000,000 $19,000,000
2021 $24,000,000 $0 $24,000,000 $0 $24,000,000

The eye-catcher here for Miller is the total value is $120 million over six years for a cool APY of $20 million.  But in exchange, he will only get a $20 million signing bonus and the first two years of his deal fully guaranteed.  That’s a total of $47 million, about $4 million more than Dareus got.  Furthermore, much of that $120 million gets backloaded.  Years 3 and 4 give him only a base salary of $15 million, and if anything goes wrong with Miller the Broncos have the flexibility to cut him with little cap penalty.  If he really wants to earn the full $120 million, he has to continue to play at a high level into his 30s.  If he does so, there’s a very good chance he’ll get extended again to take those cap numbers.

As a quick aside, I believe that Miller’s 2021 base salary, currently outside the scope of the CBA, abides by the so-called “30% rule” in which such a base salary cannot be higher than 30% of the base in the final league year. 30% of $19 million is $24.7 million.

Contract B: The full guarantee record breaker

Year Base Salary
Prorated Bonus Cap Number Dead Money Cap Savings
2016 $8,500,000 $5,500,000 $14,000,000 $61,000,000 ($47,000,000)
2017 $12,000,000 $5,500,000 $17,500,000 $47,000,000 ($29,500,000)
2018 $13,000,000 $5,500,000 $18,500,000 $29,500,000 ($11,000,000)
2019 $14,000,000 $5,500,000 $19,500,000 $11,000,000 $8,500,000
2020 $15,000,000 $5,500,000 $20,500,000 $5,500,000 $15,000,000
2021 $15,000,000 $0 $15,000,000 $0 $15,000,000

Here, Miller gets a signing bonus of $27.5 million and the first three years of his deal fully guaranteed.  That’s a total of $61 million, beating out Suh.  But in exchange, the total amount of the deal is only $105 million at $17.5 million APY, just beating out Vernon.  The Broncos are locked into Miller for those three years, but they are also the three years where he will still be in his 20s, so it’s a reasonable gamble to assume he won’t decline considerably in that period.  After then, the Broncos will have Miller for a relative bargain if he keeps up his play in his 30s.


As always, my hypothetical contracts represent ones closer to the extremes than the likely reality for illustration purposes.  In truth, there will likely be some type of hybrid approach, with additions such as roster bonuses, option bonuses, and team options that were present in Thomas’s extension.  But the goal of this exercise is to demonstrate what Miller may really want out of his extension.  If he is confident in playing at a high level into his 30s, pursuing a high APY would be prudent.  On the other hand, if he wants the security of knowing that significant money will be coming to him no matter what, pursuing high full guarantees would be the path to take.  Either one is perfectly valid depending on personal preference.  But Miller will likely have to accept that he can’t accomplish both goals.