The Broncos & Russell Wilson's Contract

The Broncos & Russell Wilson's Contract

Can you imagine if we knew nothing about the turmoil between Russell Wilson and the Broncos right now? Sometime around March 16th, Adam Schefter would casually drop a tweet letting the world know that Denver was in the process of releasing their fully guaranteed QB, and the football world would have been shook for days.

Unfortunately, Denver is so psyched to move on from him, they let the cat out of the bag last Fall. We’ll detail how this mess might shake out from a financial perspective, offering our best educated guess on how things might go in the coming weeks.

A few quick notes before we get deep into the weeds...

  • Wilson's $39M 2024 compensation is already fully guaranteed
  • Wilson's $22M option bonus for 2024 is due March 17th
  • Wilson's $37M 2025 salary becomes fully guaranteed on March 17th
  • The deal contains $85M of dead cap ($46M bonus proration, $39M cash)

Just Give it To Me Now Doc

If the Broncos really want to cause a stir, they can simply outright release Wilson before March 17th. All that would lead to is a $39M cash payment, and an $85M dead cap hit (a loss of $49.6M against their 2024 cap table). Something tells me they won’t be going this route…

The Classic Post 6/1 Designation

If the Broncos were to do absolutely nothing to this contract, but then designate Wilson a Post 6/1 release prior to March 17th (when his $37M salary for 2025 becomes fully guaranteed), Denver would carry his entire $35.4M salary cap hit into June, then take on dead cap hits of $53M for 2024, & $32M in 2025. Seems backwards right? The issue here is that $22M of Wilson’s 2024 compensation comes in the form of an option bonus. If that option isn’t exercised, it turns into a guaranteed salary. So Denver would be allocating $39M of salary + $14M of bonus proration into the 2024 season per this move. The reason to go this route? Front load the damage, and make the 2025 situation a little more palatable.

Exercise Early

Wilson’s 2024 compensation breaks down as a $17M base salary, & a $22M option bonus - all of which is fully guaranteed. If Denver exercises the option bonus then designates him a Post June 1st release (before March 17th), they can push $17.6M of that cap into 2025, leading to a $35.4M dead hit in 2024, & a $49.6M hit in 2025. This represents $0 savings for the upcoming season, but actually opens up $5.8M of cap for the 2025 season. Just for clarity, Wilson still gets his $39M cash payment in 2024. This is simply a maneuver to adjust the cap allocations a bit.

Cap Convert It All

If the Broncos feel like they need to free up cap space in 2024 by moving on from their $39M guaranteed QB (snarky tone), they can exercise the $22M option bonus AND convert $15.79M of his $17M base salary into a signing bonus this March. Then, a Post June 1st release designation would come with a 2024 dead cap hit of $22.768M, but a 2025 dead cap hit at $62.2M. Again, not ideal - but nothing here will be. Just for clarity, Wilson still gets his $39M cash payment in 2024. This is simply a maneuver to adjust the cap allocations a bit.

Find a Trade Partner

We’re not going to spend too much time here as A) it’s highly unlikely and B) any possibility for a trade will have to include some sort of retained salary, which comes with endless outcomes.

For practicality purposes, let’s just throw this scenario out there. Denver exercises the $22M option bonus, spreading it out over the next 5 seasons of the contract for cap purposes. They then carry Wilson’s $35.4M salary cap hit into June, and pray that somebody’s free agency & draft went horribly wrong a month ago. Now, Wilson is on a $17M guarantee for 2024, & a $37M guarantee for 2025. Is there a team willing to take on Russell Wilson at 2 years, $54M?

Just Let it Ride

By all accounts, the relationship between Denver & Russell Wilson is long past the point of return, but that doesn’t necessarily mean the Broncos have to shred this contract up. Deciding not to play Wilson is not a breach of terms here by any means. The structure of this contract says that these two sides should remain married through 2024 (and 2025, but we won’t go there). Is this situation really that much different than what the TItans just went through with Ryan Tanehill?

Tannehill played out 2023 on a $36.6M cap hit in Tennessee. Injury & poor play saw him lose the starting role midseason, and the Titans simply rolled on. Now that isn’t exactly an apples to apples comparison, as Tannehill will now walk into free agency, leaving behind only $9.2M of voided dead cap. But the point here is that teams have become much less sensitive to dealing with ugly cap charges, even if they don’t net any positive football return.

Wilson will be demanding a trade or release this offseason - there’s no question to be had there - but the Broncos will not be required to comply.

The Likely Outcome

Time travel back to August 31st 2022 and never offer Wilson this contract extension, leaving him on a 2 year, $51M contract that would have expired after the 2023 season, leaving Denver with $0 of dead cap and Wilson the chance to hit free agency?

But back to reality here, it’s not my money so the Classic Post June 1st Designation could be the best way forward here. If we’re reading the Broncos properly, it appears as though a few notable players could be moved on from, signifying a bit of a purge/reset season. In that same breath, declining Wilson’s $22M option bonus, taking the $53M dead cap hit this season, and the $32M hit in 2025 seems to align with this mindset.

A $53M dead cap hit would easily become the highest ever single season cap figure (for an active or inactive player), but that’s the price to pay for bailing out of a monster QB contract 2 years before you’re supposed to.