Should The Broncos Demand A Pay Cut From Case Keenum?

In my offseason roadmap, the first item on the list was as follows: “Do not cut Case Keenum, and do not renegotiate his contract.” While I will stand by that, I will cede that a cromulent case can be made in opposition, and it’s worth exploring a bit further what the Broncos can do if they feel that paying Keenum $18 million with a $21 million cap hit in 2019 in not appropriate.

Here is a poll where you can give your opinion on the subject, but before you submit your vote, I encourage you to read the entire article, as I hope to better inform your vote before you reach your own opinion.

Should the Broncos demand a pay cut from Case Keenum?

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Keenum danced dangerously close to below replacement level in his play in 2018.

Among quarterbacks that attempted at least 195 passes (the number Nick Foles tossed in 2019), Keenum logged 3,890 yards (14th leaguewide), but only with a completion percentage of 62.3% (28th). He threw 18 touchdowns (23rd), but his 15 interceptions were tied for second worst (with Sam Darnold and Andrew Luck), with only Ben Roethlisberger throwing one more. Put that all together for a traditional passer rating, and Keenum was a miserable 30th in the league at 81.2. Football Outsiders, meanwhile, gives Keenum a similarly miserable result of -60 in DYAR (29th), and a DVOA of -12.7% (28th).

Keenum doesn’t hold all of the blame for this. Injuries decimated the Broncos’ offense in 2018, starting with the losses of Ron Leary and Matt Paradis on the offensive line, and with the unit finally fully collapsing with the loss of Emmanuel Sanders. Coaching on the offensive side under the playcalling of Bill Musgrave was also suspect.

But Keenum is not blameless for his own numbers, either. While the short length of his contract said enough without words, John Elway acknowledged as much by saying “Case is probably a short-term fix”. With all of this, one has to consider whether his contractual rank as 18th by APY is justified given his play in 2018.

And know this: Elway asked (and succeeding in getting) one of the greatest quarterbacks of all time to take a $4 million pay cut, even though he still put together a top tier performance the prior season. Elway was prescient in demanding this pay cut, as Peyton Manning’s play did indeed fall off a cliff, but Manning was also prescient in that he proved that he could earn that money back.

If the thought of a pay cut crossed Elway’s mind with Manning, it has to have done the same with Keenum now. Regardless of our opinions, we should probably be prepared for this possiblity.

Keenum will earn at least $7 million in 2019 from someone.

Let’s clarify some facts about Keenum’s 2019 contract year before proceeding as to how a pay cut could operate. $7 million of his $18 million base salary is fully guaranteed. That means that if the Broncos cut Keenum, they will be liable to pay Keenum up to that amount, less any offset that he would get from a contract from another team. The veteran minimum for someone of Keenum’s experience would bu $805,000, and the minimum salary benefit would be $895,000. So to keep the numbers round we’ll assume that at worst the Broncos would pay Keenum $6 million for not playing for them.

Among veteran quarterbacks, $7 million APY resides in a void between starting and backup quarterbacks. Josh McCown at $10 million APY is the only notable contract in that range between Andy Dalton ($16 million APY) and Teddy Bridgewater ($6 million APY). (I am not counting Nick Foles or Tyrod Taylor as their contract received significant renegotiation.)

If the Broncos keep Keenum, the pay floor of doing so will be $7 million, which would be atop the highest pay for backup quarterbacks, but well below starter pay.

In addition to his current $18 million base salary, there is $3 million in prorated money from his signing bonus charged against the 2019 cap, for a total of $21 million.

What are the mechanisms the Broncos can use for a Keenum pay cut?

Here’s a list of mechanisms I can come up with, in order of what is most team friendly to what is most player friendly:

  • Conversion of salary to incentives. This has the practical effect of outright removing salary, and this is what was done to Manning in 2015. Remember the difference between Likely To Be Earned (metrics the player achieved last season) versus Not Likely To Be Earned (metrics the player did not achieve). LTBE incentives count against that year’s salary cap and are credited to the next if not achieved, while NLTBE incentives are the reverse: not counted against the current year, but charged to the next if achieved.
  • Conversion of salary to per game roster bonuses. While this can come in many variants, the most common is for being on the active roster. Sam Bradford had $5 million in PGRBs last season, and was a major reason why he was ultimately cut.  If used, this mechanism will count against the 2019 cap since Keenum was active all 16 games in 2018.
  • Conversion of salary to a traditional roster bonus. This would be money that would be paid up front at a certain date if the player remains on the roster. Possible dates could include soon after the draft, at the start of training camp, or at the start of the regular season. An example of this is what was done with Donald Stephenson’s first renegotiation in 2017.
  • Conversion of salary to a signing bonus. Also known as “restructuring”, this of course defers salary cap hits to future years by prorating the money paid upon signing. In Keenum’s case, since he only has one year left on his contract, this mechanism would also requiring extending his contract, or creating void years to allow the proration. Since Keenum is being viewed as a short term solution, I would only consider the latter as an option here.

An example pay cut that combines these four mechanisms

You are encouraged to play around with OTC’s salary cap calculator for your own versions of what you think would be an appropriate pay cut for Keenum. The example I give below is merely a demonstration of what is feasible.

Year Base Salary Prorated Bonus Traditional Roster Bonus Per Game Roster Bonus Cap Number
2019 $2,000,000 $8,000,000 $1,000,000 $1,000,000 $12,000,000
2020 Void $5,000,000 Void Year $5,000,000

Here is what is being done here:

  • $10 million of Keenum’s base salary (which includes his current $7 million in full guarantees) is converted into a signing bonus. A void year in 2020 is added to prorate $5 million of this into 2020, where cap space for the Broncos is much more plentiful than now. This is an increase in guaranteed money by $3 million, and Keenum also gets the benefit of getting that money now instead of in game checks. This $10 million also matches what McCown got from the Jets last season.
  • If Keenum wants more in guarantees than what McCown got, there is negotiation room to guarantee all or part of Keenum’s $2 million base salary.
  • Keenum gets a $1 million traditional roster bonus if he is on the 53 player roster Week 1 on 2019.
  • Keenum gets $62,500 for every game he is active for in 2019.
  • Keenum agrees to a pay cut of $4 million, the same amount Manning did, by converting that money into NLTBE incentives. What those should consist of can be flexible as long as they are NLTBE. Most likely would be playoff incentives, since the Broncos regrettably were unable to get another chance to reprise their role of being the only team able to stop the Patriots’ reign of terror in the AFC in the past six seasons.

The primary goal of this renegotiation is to reduce Keenum’s 2019 cap hit from $21 million to $12 million, giving Elway more ammunition to improve the roster elsewhere in free agency.

If you demand a pay cut from Keenum, you have to be prepared to cut him if he balks.

Whatever Elway and the Broncos decide to do with Keenum, if they do approach him with a pay cut demand, they must commit themselves into entering a “pay cut or be cut” stance if a renegotiation can’t be agreed on, to preserve such leverage for future requests. Therefore, before any of the above can be hashed out, the Broncos must also do their due diligence in identifying veteran quarterbacks to target in case they do part ways with Keenum.

Whether that’s trading for Nick Foles, trading for or signing Joe Flacco, signing Teddy Bridgewater, or whoever you want to argue as a better replacement, the Broncos must have a plan here, and they can’t afford to let that plan fail. And this is why this is where I get off the train on demanding for a pay cut for Keenum. I’m not yet convinced that any of the above options, or others, will be in the net benefit of the quarterback position.

But Elway, as he proved with Manning and others, is more willing to be more aggressive in contract negotiations than I would be. We should be prepared that he may reprise this aggression.