Building the Bronco Formula for 2016

I was going to write something about Von Miller this week, but I’m glad Jason did because it’s right in line with what I would have projected. I saw many on Twitter projecting him to be in the $120 million plus range, with other saying vague things like, “VON MILLER JUST GOT PAID!!!” I understand the reasoning behind why many would suggest Miller be in the $120 million range due to his incredible performance in the playoffs and the contract Ndamukong Suh just signed.

In Jason’s article, he did a great job of breaking down Suh and Calvin Johnson’s contract into the early money years and cash flows, so that Miller had something to project in terms of that, rather than shoot for that big, ESPN splash contract like theirs were. The goal is to maximize your earnings, so getting early money, having a contract with dead money hits that provide cap security for yourself, plus having a contracts that allows your team to compete help in all three of those categories.

Jason also went on a short rant on Twitter about this, stating how players “should honestly assess team history and own abilities to maximize real rather than paper value if possible” and how “sometimes the hometown discount can lead to more security down the line. When looking at Bengals, I feel they are less prone to cuts.” I’ve had the same idea for awhile on both of those counts. The player should deal with the organization in good faith to create the most income for himself, while also doing it in a manner that best serves the team. This has the added benefit of doing your part to maximize your team’s potential.

It’s likely that Suh will be paid most of the money on his contract up until 2019 when cutting him would save 9.92% of the projected $191.5 million cap versus him costing 12.58% if they keep him, but it’s unlikely that he’ll be remembered as an all-time great due to lack of publicity from being on sub-par teams largely due to the team’s inability to construct a roster around him.

I looked at the Manning/Brady debate last February and discussed my belief that the 3.95% more of the cap that Manning cost on average over Brady likely played a major part in why Brady was the one with four Super Bowls and Manning now the one with two. Even in the 2006 year the Colts won, their defense was 23rd in the NF;, the year they lost to the Saints, the defense was 8th in points, but their offense was 32nd in rushing, which is a huge disadvantage strategically. During the early-2000’s championships, Brady was playing with some of the best defenses in the league and their 2014 Super Bowl was made possible by having a complete team again.

No decision in the NFL happens in a vacuum, so when I see Suh’s 18% cap hits and two years at 12+%, as a defensive tackle, it makes you wonder how Miami can fill out their roster and compete in the same division as Bill Belichick. Then there are other teams constructing their caps smarter and with better core pieces to contend with as well, having Suh and Tannehill combining for 20+% of the cap looks a little weaker now than it did before 2015, but it can be overcome. The point I always want to stress with the figures I’ve gathered from Super Bowl champions is that they’re malleable, nothing is set in stone as crafty GMs can overcome a lot.

The brings us to John Elway, the craftiest of the GMs considering he was able to construct one of the best defenses of all-time even though Peyton Manning and Demaryius Thomas at a Top 2 cap hit, 21.43%, which was just a smidge below the 21.64% cap hit record set by Steve Young and Jerry Rice in 1994.

What they’ve now done as an organization is set their formula into place, which they can now use for the next few years. One thing I’ve realized with all great organizations is that they have a style of play and stick with it. With the Steelers, it’s forever been about having a powerful running game and a stout defense, and it’s bred in the DNA of how they build their team. Even with Big Ben as one of the best downfield passers in the NFL, and his big cap hit, they drafted Le’Veon Bell to give them a big, punishing back like they’ve always had and started to rebuild their defense now as the old Super Bowl crew has now retired.

The style of play can migrate as well, like with Ron Rivera bringing the 1980s Bears formula to the Carolina Panthers, but also bringing Dave Gettleman’s lessons from his time with the Giants to round out the formula. I’ve even forgotten this year, but you look at the defensive line and the wide receivers for instance and Gettleman had the more expensive veteran, Charles Johnson, like Strahan and rounded out the defensive line with the future like Justin Tuck or Kony Ealy. They went low-cost at wide receiver with guys on their rookie deals with the Giants, while Gettleman went to find cheaper receivers in the draft through Kelvin Benjamin, Devin Funchess and Corey Brown and through free agency with the low-cost, but productive for that their offense required combination of Jerricho Cotchery and Ted Ginn.

Manning is presumably going to either retire or be traded to a team like the Los Angeles Rams, Texans, or someone else who could use him for a year or two as a starter (assuming he’ll be fully recovered from the torn quad and torn plantar fascia he was fighting these last two seasons). He could also opt for the player/coach role Mark Brunell played for the 2009 Saints, which got him a Super Bowl ring, which was surely rewarding in it’s own way. I don’t know Manning, so I don’t know what his incentives are at this point, but if someone has the cap space and is willing to take his $19 million base salary this year, then I’m sure he’d consider playing.

The Broncos,though, are in a position in 2016 where they won’tt be able to build for the future if they keep Manning, since he would cost 14.05% of the cap, which he isn’t worth anymore. This would also mean they’d have 92.46% of their projected cap already consumed, but if they were to trade or release him, then they would have 80.12% of the cap to work with:

2016 Broncos Top 30 w:out Manning

What needs to be mentioned is that with the $4 million pay cut that Manning agreed to last spring with the Broncos, he had incentives of $2 million for winning the AFC Championship and another $2 million for winning the Super Bowl, so that’s $4 million that will count against their 2016 salary cap, so that’s another 2.60% that must be factored into the equation bringing us to 82.72% of the cap.

Taking the figures Jason suggested for Von Miller, here’s how his six-year, $102 million contract with $56.1 million in total guarantees including $17 million signing bonus would look:

Jason's Von Miller Projection

So under the assumption that that is the contract Miller signs, the biggest question for the Bronco’s future would be locked into a six-year deal that is very manageable. And, remember, Brock Osweiler will consume a much more manageable percentage of the cap over the next three seasons than Manning. Add Miller’s 9.09% for 2016 to the 82.72% that was already consumed and we’re at 91.81% of the cap.

As I wrote in the Kirk Cousins’ article, I believe that the market for Cousins, Osweiler, Sam Bradford and Ryan Fitzpatrick starts around the $12 million a year over four years with Cousins as the highest paid of the four. Having earned such a massive payday on his rookie deal as one of the last lottery winners of the old-CBA, it’s my opinion that Sam Bradford should look to stablize his career with a manageable contract that allows the Eagles to build a team around him. If he got something around three-years at $10 million per year with a $12 million signing bonus and the first two years guaranteed, I’d take that money up front, plus two years of security and work towards his next contract. Bradford turns 29 this November, so this contract would end when he’s 31-years old (if he doesn’t play well enough to warrant a re-structure), which gives him a crack at one more big money deal. Quarterback is a position like no other in the NFL, outside of kicker and punter, in that the prime for these athletes is a little bit older as the position relies heavily on smarts, experience and pattern recognition, while every other position relies more heavily on skills like strength and speed that diminish at an early age and a higher risk of catastrophic injuries.

I think Fitzpatrick would do well for himself to get a similar deal to Bradford’s, but maybe the Jets will lock him in for just two years if they believe Bryce Petty is the quarterback for their system downstream. Some pundits are drafting Carson Wentz with the 20th pick for the Jets, but either way, getting Fitzpatrick for two-years around $10 million a year would be a solid deal for both sides.

Osweiler turns 26 in November, so a three year deal would have him hitting free agency at 28 years old, which puts him potentially in the best position out of anyone here long-term, but he might have the smallest contract out of all three as he’s shown the least. He’s played in only eight games and he hasn’t done much more than managed the offense to a 5-2 run, but I have a strong feeling that Elway consciously drafted him and groomed him to take over once Manning retired and his performance was enough to prove to the organization that he’s the answer for the formula they’re building. His 61.8% completion percentage is not ideal, neither is his10 touchdowns to six interceptions, but he threw for 245 yards per game and will fit into their formula and their cap.

The Broncos should sign Osweiler to something in the $8-10 million per year range over three years with a $12 million signing bonus. He and Bradford might end up with almost identical contracts as they’ve both shown their current organizations something but not blown them away. , But signs are that Osweiler is the quarterback of the future for the Broncos, while Bradford will either prove to be or be grooming the early draft pick the Eagles likely choose in 2016 to take his place. While Cousins played himself into the $12-$14 million range, Osweiler and Bradford earned the right to the job in 2016 and I think that’s worth $8-10 million. Osweiler could earn a bit than Bradford considering that the Browns, Texans, and a few other teams could be in the market for him. In any case, I think he lands at $27 million over three years with $10-12 million signing bonus and heavy guarantees as he’ll have another crack at the free agency market at the ripe age of 28. This could be what his cap hits look like and would be right in line with Elway’s 5.17% and 5.01% cap hits in 1997 and 1998:

Brock Osweiler Projected Contract

I believe this deal works best for Osweiler because he’ll be in a position to become the face of the team that became America’s team according to USA Today due to the Peyton Manning effect. He’ll be the quarterback of the defending Super Bowl champions and continue to have a great defense led by Von Miller and the players they’ll be able to resign due to his manageable cap hit, which will then lead to a potentially huge payday in 2019. The Broncos are primed to repeat this formula for the foreseeable future considering they were able to do it with Manning taking up 12.21% of the cap.

The Super Bowl average for QB1 is 7.63% of the cap and even superstars like Drew Brees (8.67%) and Troy Aikman (6.72%) weren’t big cap consumers, which is why I find the general perception about the current quarterback market to be far too expensive. Jason, in this 2014 article, and I think Andy Dalton’s contract helped reestablish realistic expectations for the middle of the quarterback market, which is also where I think most passers in their late-twenties should reside in the 7-10% of the cap range like Dalton does. Teams should reward these players with sizeable signing bonuses, guarantees and consider to re-negotiate the contract if the player outperforms it, but should work to make sure the quarterback earns a realistic figure when you consider you have to compete against the Patriots with Tom Brady at under 10% of the cap. With Dalton’s contract, plus Brady’s cap hits, the quarterback market had to respond.

We’ve got Miller and Osweiler locked in and they’ll bring the cost for the 2016 cap up to 97.00%, so we’re starting to get too close to the $154 million cap limit considering their 10 draft picks will take up 4-5% of the cap. It’s time to cut someone loose and while Ryan Clady has said he’d be open to renegotiating his contract, he missed all of this season with a torn ACL and 14 games in 2013, so it’d have to be a drastic restructure for a player the Broncos would really have to worry about staying healthy. If they were to cut him, it would create 5.82% of cap space, so that’d get the Broncos down to 91.18% of the cap.

They could restructure hi Ryan Harris’ contract, as he issues at left tackle earning a grade of 40.0 from PFF; so that would mean his 6.60% cap hit would be eliminated and replaced with something likely in the 2% range. Considering his injury history, there are other options the Broncos could explore, but getting him around 1.50% of the cap would likely be worth it as it’d be just about double his dead money hit. H e was a very solid left tackle prior for them and he turns 30 this September, so the Broncos might not want to cut the cord on him just yet if they can get the right price.

So let’s consider Clady restructured with a two-year deal worth $6 million with the first year guaranteed at $2.5 million and the next being a larger $3.5 million, but with no dead money—so they could easily cut him if he doesn’t perform or gets injured again. That means his 2016 cap hit should be 1.95% to bring us to 92.35%. The replacement cost in free agency for a player like Donald Penn would be higher considering they would also have to factor in Clady’s 0.78% dead money charge plus the contract, so that could be a happy medium. Michael Oher got a two-year $7 million deal last offseason after he had his struggles in Tennessee, so that’s a nice comparable for Clady to see that $6 million is a fair deal considering his injuries.

Let’s add the draft picks in now and call them 4.5% of the cap, which brings us to 96.85%. Only the Broncos have a real idea of what they’ll get out of Clady, but it might be time to draft another lineman in the first round anyway and there are a lot of viable candidates who could be there when the Broncos number is called. Now they only have 3.15% of the cap to sign their remaining free agents with the main focus being on Malik Jackson, Danny Trevathan, and maybe Evan Mathis on a short term deal, plus restricted free agents CJ Anderson and Brandon Marshall.

Jason believes Anderson will be a second round tender, which means he’ll slot in around $2.5 million, so add another 1.62% to the cap and we’re at 98.47%. Marshall will likely be a first round tender, so he’ll cost around $3.5 million, which is another 2.27% of the cap to bring us to 100.74%. We’re over the cap, which means the Broncos are going to have to make some room, which we’ll get to later.

As Danny Trevathan is an unrestricted free agent, he’ll likely command somewhere in the $6-9 million range considering the ILB market and the importance of ILB in the 3-4 scheme and since just $6 million would be 3.90% of the 2016 salary cap, I don’t see him as the best option to re-sign. With former Broncos DC Jack Del Rio in Oakland looking like he’s converting to a 3-4 defense with a gaping hole at ILB, I won’t be surprised to see Trevathan end up there for $8-9 million per year.

So the Broncos are 0.74% over the cap while still needing to re-sign Jackson and, maybe, Mathis, plus whatever other wants or needs they may have, which shouldn’t be many as they won’t have many holes if they can just re-sign Jackson and use their draft picks wisely. Considering they don’t have many needs, it’s quite possible they let Jackson go if his asking price is too rich as they’ll still have Wolfe and Miller locked in long-term. Lance Zierlein from writes that their top draft needs are OT, QB, OG and TE. We’ve handled the tackle issue in the short-term with Clady re-signed at a lighter number, we’ve got Osweiler locked into a reasonable deal, and the tight end position is in fine shape with Owen Daniels coming back and Jeff Heuerman coming off an ACL injury that caused him to miss his rookie season.

With Derek Wolfe signing a contract for four-years, $36.7 million with $17.5 million in total guarantees and a $7.5 million signing bonus, it’s likely that Jackson will be looking for something in that neighborhood. That means the contract would look something like this against the cap:

Derek Wolfe Contract

We’re looking for 4-5% of the cap in space for Malik Jackson to fit in and we’re over that by 0.74% right now, so we have to find some space for that. Releasing Cyrus Gray, Juwan Thompson, DeVier Posey, Darrion Weems and Kenny Anunike, five easily replaceable guys with no dead money, opens up 2.00% of the cap to bring us to 1.26% of cap space. The real way to open up cap space though, could be through a re-structure or an extension.

Reggie White was an anomaly, but he retired at 37 after a 16-sack season with the Packers in 1998, but came back in 2000 to add 5.5 for the Panthers at 39-years old. Ware missed five games this season with a sprained MCL, but recently was quoted as saying, “I’ve got a lot of gas in the tank, I don’t even think about retiring. God still wants me to play, that’s why I’m still doing what I’m doing.” He was clearly still highly effective this season with 7.5 sacks in 11 games and 2.5 sacks in Super Bowl 50, so he’s a great candidate for a restructure even though he turns 34 on July 31st or– as everyone under 30 knows — Harry Potter’s birthday.

Ware currently consumes 7.63% of the projected 2016 salary cap, so restructuring his deal to get his cap hit down in the 4% range with a three-year deal, a sizeable signing bonus, and two-years guaranteed could open up the space to re-sign Jackson and then they could go to the draft and use one of their ten picks for a guard to replace Mathis. Say they got Ware’s cap hit to 4.00% for 2016 and add the 3.63% cleared to the 1.26% already available and there’s 4.89% in cap space for year one of Jackson’s deal. I’m sure that a team like the Redskins with their need for a pass rusher, or another team running a 3-4 defense, could end up offering him more than that, but his true value is no more than 5% per year as Wolfe is actually the better player of the two.

(Note: As Nick wrote in the comment section, there’s a real probability Ware gets cut with only 1.08% against the cap in dead money as I should have taken Shane Ray and Shaquil Barrett into account as Ware’s replacements. Ray being drafted and Barrett’s emergence have created an opportunity for them to save 6.55% of cap space by releasing Ware and that move alone could open up the space for Jackson and even Mathis. Maybe there even ends up being some room to sign Trevathan after that with some of the other moves I’ve proposed?)

Using Jason’s projected contract for Von Miller and looking at the other potential decisions for the Broncos this offseason, there’s a real possibility that they could re-sign every one of their prized free agents outside of Danny Trevathan, who I project will be a Raider in 2016, and Evan Mathis. Of course, you can see just how tight it’s going to be to slide everyone in under our projected $154 million salary cap, which could end up in the $150-153 million range and make things even more difficult.

That said, I think it’s not just possible, but likely, that the Broncos will be able to do the cap gymnastics to keep these guys. Maybe Von Miller has a 7.5% cap hit in year one and Osweiler has a 3.5% cap hit, which would open up more space to re-sign Jackson without restructuring Ware. Maybe they restructure Ware and have Miller and Osweiler at 11% total for 2016 and they’re able to resign Mathis to a one-year deal at 2% of the cap and take another crack at the Super Bowl with all the key pieces other than Manning and Trevathan. Maybe they restructure Talib considering he has only $3 million in dead money in 2016, but four more years on his contract and could take a signing bonus with more guarantees and a lower base salary in 2016. John Elway and Co. are salary cap magicians, so who knows what’s up their sleeves.

The 2015 Broncos showed us how a Super Bowl champion can be constructed through finding players who were undervalued, like with safety TJ Ward. They did all of that with a declining Peyton Manning taking up 12.21% of the cap, plus Demaryius Thomas with a record breaking 9.21% cap hit for receivers and a Top 2 cost of 21.42% that was barely less than Steve Young and Jerry Rice’s Super Bowl record 21.64%. John Elway and staff have worked wonders before, so I don’t doubt that they can do it again.

Even if Manning isn’t a Bronco in 2016, if the Broncos are able to re-sign everyone but Trevathan and Mathis, and 10 draft picks to fill any holes they may have, they’ll be right back in the driver’s seat for a repeat. And, even if they don’t re-sign Jackson, they’ll find a serviceable replacement in one of their 10 draft picks. They’ve got their formula in place and they’ll have locked in the pieces needed to succeed with it. They showed us in 2015 they don’t need a great quarterback performance to win a Super Bowl–they just need a game manager at quarterback, a strong running game to control the pace of the game, their defensive pieces, and Wade Phillips.

Episode 5 of The Zack Moore Show on iTunes and SoundCloud discusses the Bronco formula further as well as Super Bowl 50 and some key stats heading into the game that favored Denver.

Follow Zack Moore on Twitter @ZackMooreNFL and e-mail to be alerted when the Caponomics: Moneyball Thinking for the NFL book becomes available.