Monday, March 17, 2014
Free agency: How Denver did what it did
By Jeff Legwold
Consider this a sort of football version of myth busters. But as the Denver Broncos were busy making it rain in the opening days of free agency with five signings, four of those of the high-profile, get-some-headlines variety, much of the national conversation was about how the team pulled it off.
And there is no real mystery. The two biggest reasons the Broncos were able to do what they did:
- They planned for it. Their salary cap situation was, and still is, better than most thought.
- Winning is a powerful lure. Players are willing to structure deals that will pay them if they succeed, but also fit into the Broncos’ big picture so the team avoids the one-shot, mammoth signing bonus that eats the future cap room if things don't work out.
On the first item, the Broncos are still a fairly young team at the grassroots level of the roster, with many players still on their rookie deals. They have 34 players with salary-cap charges of $2 million or less among their top 51 salaries at the moment, 27 players with cap charges of $1 million or less.
That will change when the draft class arrives, but those players will be younger than most on the Broncos’ roster. Still, the Broncos simply had more room to work than most thought as free agency got underway.
They had about $28.7 million of workable salary-cap space -- only the top 51 salary cap figures count in free agency -- as the clock wound down to last week’s opening. They got $10 million of additional room when they cut 12-time Pro Bowl selection Champ Bailey, and they picked up roughly $4.1 million when former captain Chris Kuper retired. However, since Kuper retired, the Broncos didn’t get the salary-cap room until he formally filed his paperwork to the league.
Kuper did that this past weekend and the Broncos promptly signed wide receiver Emmanuel Sanders. The Broncos have $6 million worth of workable space remaining, but will have to leave room for any potential players on injured reserve, even as they have accounted for their incoming draft class.
And then, on the second item, after back-to-back 13-3 seasons, a Super Bowl trip and Peyton Manning returning at quarterback, players were willing to work with the Broncos to construct deals that largely pay on performance instead of up-front money. If free agents weren’t willing to do that, the Broncos moved on.
It works when you’re winning, it works when you have Manning and it works if the team holds the line at some point and opens the checkbook with at least a modicum of discipline.
Here's a look at each of the high profile deals and how both sides gave at least some to make it work:
CB Aqib Talib
On paper, the deal is six years, $57 million and while initially the guarantees were reported at $26 million, the deal is a little more diverse than that in practice.
The only full, no-matter-what-happens guarantees are in 2014 -- the $4.5 million base salary, the $5 million signing bonus, a $2 million roster bonus and $500,000 worth of game-by-game incentives -- a potential total of $12 million, if he plays in every game.
The other potential guarantees -- his $5.5 million base salary in 2015 and his $8.5 million base salary in 2016 -- are only guaranteed if Talib is on the roster on the first day of each of those league years.
And if, because of injury or performance or something unexpected, the Broncos release Talib after just one season, the dead money hit on the cap would be $4 million in 2015, not nearly as severe as would be expected on a $57 million deal. If released in 2016, the dead money hit would be $3 million, $2 million in 2017.
DE DeMarcus Ware
Ware, at 31, was the oldest of the free agents, and the Broncos took the biggest plunge in terms of per year average on his contract.
But the Broncos again spread out the guaranteed payments. Instead of one big signing bonus up front, Ware agreed to $5 million to sign and his $3 million base salary is guaranteed in 2014. In 2015, $3.5 million of his $7 million base salary is already guaranteed, as well.
Ware also has a $5 million roster bonus for '14.
So, to make it work, the Broncos need one good season from Ware and if they get two, as they expect, it is a relatively safe deal. Ware's additional guarantees don't kick in until the fifth day of the league year in March 2015 (the other $3.5 million of his base salary and a $3 million roster bonus). He has a roster bonus he could also get in 2016.
S T.J. Ward
Ward, too, split up the guaranteed money and would have to remain on the roster to get it all instead of getting it all up front. Ward gets $7 million guaranteed in 2014 ($5 million signing bonus, $2 million base salary).
An additional $4 million in guarantees don't kick in until the fifth day of the 2015 league year.
WR Emmanuel Sanders
Sanders called being in the offense with Manning "wide receiver heaven." His deal is for $15 million, but could go to $18 million if his performance kicks in $3 million worth of escalators.
The Broncos, watching their cash flow after the initial surge of free agency, will pay Sanders a $3 million bonus next March instead of now. Because of that, Sanders' cap hit this season is $4 million.
Or as John Elway put it after Sanders' signing: "We had a bunch of cap space going into this year. ... We had plenty of cap space. That's why the misnomer of us winning now. Sure, we want to win now, but we also want to set ourselves up. ... There’s no question we’re trying to win this year, but we’re also trying get good base for a good football team for a long time."