Broncos Alter DeMarcus Ware’s Contract

I am using “alter” in my title here (previously “rework” if you look at the URL and tweet), because “restructure” is often poorly used by the media.  “Restructuring” should only be used to refer to the act of converting non-prorated salary into a signing bonus.  In Ware’s case, his contract cannot be restructured unless it was extended, as he only had one year left on his deal.  In order to save salary cap space, Ware either had to agree to an extension (either real, or fake by using void years), or he had to take a pay cut.  We will soon see what is the full truth.

UPDATE, 2:20 PM MT: It is indeed a pay cut (of $3.5 million) that can be earned back from incentives.  Bob posted some numbers by Albert Breer’s that gave an early glimpse at Ware’s pay cut.

UPDATE 2, 3:20 PM MT: Mike Florio is now reporting that Ware has $4 million fully guaranteed, not $2 million as initially speculated. Ware’s 2016 contract year should now look like this:

Base Salary
(Guaranteed)		 Prorated Bonus Roster Bonus* Cap Number Dead Money (if cut)* Cap Savings (if cut)*
$4,000,000
($2,000,000)		 $3,666,668 $500,000 $8,166,668 $5,666,668 $2,500,000

*It is unclear when Ware’s roster bonus is precisely due.

One interesting aspect is that the Broncos only guaranteed $2 million of Ware’s salary in exchange for the $3.5 million pay cut.  Hypothetically, should the Broncos decide before the regular season that Ware isn’t worth an additional $4-4.5 million (depending on the timing of the roster bonus being due), Ware could still be cut before then.  I see that as highly unlikely, but the option is there.

I’ve struck out the paragraph above because if Ware does indeed have an addition $2 million in guaranteed base salary, $5.66 million in dead money is not quite as appealing in exchange for only $2.5 million in cap savings.  As Florio speculated, this likely provides some security to Ware against being cut prior to the regular season.

Should Ware earn any of his incentives, they should be charged as a negative adjustment to Denver’s 2017 salary cap, as Peyton Manning’s $4 million Super Bowl bonus was charged in 2016.

Reviewing Free Agent Contracts

As we await word to see what other moves the Denver Broncos will make as the second wave of free agency is about to begin, I wanted to review some of the contracts that have been handed out to players so far.

I’ll direct you to Over the Cap’s list of free agents, which includes links to those players who were free agents that have signed deals and have their contract details reported. I wanted to look at each deal to see how good they really are from cap standpoints, cash standpoints and whether the player’s talent level justifies the fully guaranteed money that will be paid out.

I didn’t get to every contract, but started off with the ones that have the highest average salaries per year. If I get a chance, I’ll go over other contracts in a later post.
Continue reading Reviewing Free Agent Contracts

Broncos Receive 3rd, 4th, and 6th Round Compensatory Picks For The 2016 NFL Draft

NFL Communications released the 2016 compensatory picks for the 2016 NFL Draft, and as happily projected, the Broncos will receive an additional 3rd, 4th, and 6th round selections.  It is my belief that these pick are compensation, respectively, for losing Julius Thomas, Orlando Franklin, and Terrance Knighton in free agency in 2015.  The Broncos now have 10 selections in the 2016 NFL Draft.

I will have a longer evaluation on my projection at Over The Cap later today, but one unique observation I want to make with respect to the Broncos is that this may be the first year since compensatory picks were founded that there were no 7th round comp picks awarded.  That means that the famous Mr. Irrelevant pick, unless it’s traded, will go to your Super Bowl 50 champion Denver Broncos.  The Broncos have never held the Mr. Irrelevant pick in their entire history.

The overall positions of the Broncos’ 2016 draft picks are as follows:

Round Overall Notes
1 #31
2 #63
3 #94
3 #98 Compensatory (Julius Thomas)
4 #136 Compensatory (Orlando Franklin)
5 #144 from Baltimore
6 #219 Compensatory (Terrance Knighton)
7 #228 from San Francisco
7 #235 from Los Angeles via Houston
7 #253 Mr. Irrelevant

 

Mike Klis: Broncos Trade For Mark Sanchez

According to OTC’s page on Sanchez, he will be due a $4.5 million salary, with $1 million guaranteed.  That will also be the cap charge that the Broncos take on when they acquire him.

UPDATE, 11:50 AM MT: Elway’s made it official.

Jason La Canfora: 2016 Compensatory Picks To Be Released Tomorrow

To review, I have projected that the Broncos will get either a 3rd or 4th round comp pick for Julius Thomas, a 4th round comp pick for Orlando Franklin, and a 6th round comp pick for Terrance Knighton.

In my opinion, this is a welcome development, especially once compensatory picks can become tradeable (and yes, plenty of Tweeters have reminded La Canfora that this will not happen until 2017).  Teams should have their whole arsenal of draft picks, compensatory or not, available by the start of free agency.  Furthermore, there’s not reason to not release the compensatory picks at the earliest moment possible, which would be after the Super Bowl MVP is announced for possible postseason honors adjustments.