A Rule Change To The Compensatory Formula Could Impact 2020 Roster Decisions For The Broncos

Under John Elway, the Broncos have been one of the most aggressive teams in going after compensatory picks. One tactic they’ve used as part of that aggression is adding team options to contract years so that if they decline those options, the players that subsequently become free agents also qualify as compensatory free agents in their favor. This paid off the most for Denver when they got a 3rd round comp pick in 2018 for declining Russell Okung’s team option.

However, it appears that this edge that the Broncos. among only a few other teams, have used may be coming to an end. We at Over The Cap now believe that the NFL is clamping down on this loophole, and will no longer allow players with declined team options to qualify as CFAs.

Since the Broncos are regular users of this loophole, this could potentially impact several of their contracts. How they will be impacted is still of great question, but before we get there, let’s review the four contracts that have options on their 2020 years:

  • There’s not much to discuss with Von Miller. Elway has already said they’ll be picking up his option, and rightly so.
  • Brandon McManus also has an option coming up, but I see no reason why it wouldn’t also be exercised.
  • Todd Davis is a closer call as to whether his option will be exercised or not. In my road map, I very tenuously said it should be declined if the Broncos are going to be serious about upgrading at inside linebacker.
  • Ron Leary’s option is also a difficult decision. In that same road map, I advocated to exercise it if they do not retain Connor McGovern, and to decline it if they extend him.

While we at OTC believe that this rule has been changed, there is still some doubt about how the rule’s been changed. First, we don’t know for sure when the rule was changed. Our most reasonable guess is at the start of the 2019 league year, but that is not yet known for sure. Second, we do not know whether contracts that were signed before the rule change will be granted a grandfather clause by the compensatory formula.

If there is a grandfather clause, then the Broncos should be in the clear Leary’s option as far as comp pick credit goes, as his contract was signed way back in March of 2017. Davis, on the other hand, could be more problematic if our guess of the start of the 2019 league year is accurate. That’s because Davis was very briefly an unrestricted free agent at the start of the 2019 league year before ultimately agreeing to re-sign with the Broncos.

I would not be surprised if the Broncos have already been aware of this rule change. My speculation on this comes from the fact that of the three major free agents that the Broncos signed in 2019, only Ja’Wuan James’s contract had this sort of team option. I recall being surprised that a similar option was not in the final year of the contracts of either Kareem Jackson or Bryce Callahan.

Whatever the case may be, if they have not done so already, Elway and the Broncos should firmly request from the NFL Management Council a clarification on what the compensatory pick rules will be on their existing contracts. If it is true that Leary and Davis will not yield comp picks if their options are declined, then it may chance the Broncos’ strategy as to how they want to proceed with them.

For Davis, he is not owed any more guaranteed money. So if the Broncos want to keep him and his $5 million salary on the roster up to at least training camp as some insurance at inside linebacker, they can do so without having to make an earlier comp pick based decision. And as long as he stays healthy through training camp and the preseason, he could be cut as late as before Week 1 before CBA-wide guarantees via termination pay would kick in.

Most of these same rules apply to Leary, except that if his option is exercised, that means that he would get $1.5 million of his base salary fully guaranteed. However, that is not a huge price to pay if they want to keep him as insurance at the position yet ultimately cut him later. The bigger question, of course, is whether or not they deem his total $8.5 million in cash due in 2020 as a wise investment, regardless of comp pick implications.