When the Broncos traded for quarterback Russell Wilson in March 2022, he didn’t get a new contract. As the 2022 regular season approached, he did.
That contract now becomes a major consideration, as it relates to Wilson’s future with the team.
Broncos coach Sean Payton is a firm believer in admitting mistakes and rectifying them. Doubling down only makes it worse. And the Broncos face an important double-down decision in roughly five months.
The Wilson contract includes a $37 million base salary in 2025. The amount is currently guaranteed for injury. On the fifth day of the 2024 league year in March, it becomes fully guaranteed. The Broncos will avoid that obligation only by trading him (not likely) or cutting him before the payment flips to a full guarantee.
Given Wilson’s performances to date, from all of 2022 through the first six games of 2023 (culminating with 95 passing yards last night), the Broncos need to be asking themselves whether it makes sense to remove the Band-Aid. Yes, there will be cap consequences if they move on. There also will be cap consequences if they don’t.
Let’s start with the cap consequences if they release him before the next major chunk of compensation becomes fully guaranteed, with a post-June 1 designation.
For starters, they would take a $10 million charge for the 2024 portion of his signing bonus. They also would have to account for his $17 million fully-guaranteed salary, and his $22 million fully-guaranteed option bonus.
If they exercise the 2024 option bonus before cutting him, the Broncos would carry $8.4 million in dead money due to the 2023 and 2024 option bonuses. This assumes the league would allow the Broncos to exercise the option bonus and then promptly tear up the contract.
If that’s the case, the Broncos would have $18.4 million in 2024 dead money, along with $17 million in guaranteed salary that would be subject to offset elsewhere. Where he would go next and what he would be paid would become intriguing wrinkles. He could sit out the year and pocket a total of $39 million. Unless someone gives him more than $17 million for 2024, he would be playing for free.
Under this scenario, the Broncos also would have a dead cap charge in 2025. The amounts would come from the remaining signing-bonus proration ($20 million) and the remaining option bonus proration ($29.6 million). That’s a total dead-money charge in 2005 of $49.6 million, to go along with as little as $18.4 million and as much as $35.4 million in 2024.
(If the option bonus counts fully against 2024, the cap charge would move to $53 million next year, but it would drop to $32 million in 2025.)
Either way, the Broncos would experience a total dead-money charge of $85 million, split over two years. That seems like a lot. (Because it is.) However, let’s consider the consequences of keeping him beyond the fifth day of the 2024 league year.
The $39 million in compensation for 2024 is already fully guaranteed. As of day five of the 2024 league year, another $37 million becomes fully guaranteed. Currently, his cap number for 2024 is $35.4 million. For 2025, it’s $55.4 million. That’s $90.4 million in cap charges if he’s on the team over the next two years.
So the Broncos would actually incur less cash (by $37 million) and a lower cap charge (by $5.4 million) by cutting him.
The only wrinkle comes from the potential for restructuring the deal in 2024 and/or 2025, pushing some of those millions into future years. Many contracts give teams the automatic right to implement this feature, which costs the player nothing. (In the end, every dollar would eventually hit the cap.)
It’s also possible that the Broncos would ask Wilson to take less money in 2024 and/or 2025. To do that, he would have to be willing to admit to himself and to everyone else that he has not lived up to the massive deal the Broncos gave him before he ever played a regular-season game in a Denver uniform.
Still, if he wants to stay with the Broncos (at this point, who knows?), he might have to reduce his total financial burden over the next two years. Given the current trajectory of his career, it arguably would make more sense for the Broncos to cut their losses, release Wilson, save $37 million, and proceed with a lower cap hit over the next two years than what the cap charge would be if he stays on the team.
At a minimum, the Broncos should be considering that option. If/when a decision is made late in the year to bench Wilson for Jarrett Stidham, the message will be (as it was when Derek Carr was benched for Stidham in 2022) that the Broncos want to keep Wilson healthy so that they’ll be able to release him before the next $37 million in injury guarantees become unavoidable.