Following another poor performance by the Broncos offense I had a number of questions pop up regarding any possible outs in Russell Wilson’s recent $245 million contract extension and what would be the realistic timetable for moving on from Wilson. Much like Aaron Rodgers’ contract the deal is a bit complicated but there is far less chance of retirement or trade in this situation.
Wilson’s contract was very aggressive from the start. Wilson’s contract fully guaranteed him $124 million at signing, the highest level of any contract in the NFL other than Deshaun Watson’s and about $21 million more than Kyler Murray’s $103 million guaranteed at signing. There are more guarantees that he can unlock based on his roster status on certain dates in the offseason. These dates are all early in the league year and very friendly to Wilson.
2023 Salary Cap Scenarios
Wilson’s contract is similar to Aaron Rodgers’ in that he has guaranteed Paragraph 5 salaries which are backed up by option bonuses in his contract. If the option is exercised the P5 reduces accordingly. If the option is not exercised than the P5 stays at the full amount. Since the expectation is that the option will be picked up the cap numbers we show illustrate the cap charges based on the option being included.
Wilson’s 2023 salary is technically $28 million and will reduce to $8 million when and if the option is exercised. The exercise date of this option is very early in the 2023 league year. Even if the Broncos were considering his release they would pick up the option just for cap purposes.
Things would be more complicated for 2024. Here we technically have a salary of $39 million for the season, all of which is guaranteed. $22 million of this would be moved into the prorated category early in 2024 if the team exercises the option. However, the option date is not until early in the 2024 league year so if Wilson were released in 2023 it would all accelerate onto the salary cap.
So without modifying the contract at all here would be the dead money associated with a release next offseason.
|Total Dead Money||$107,000,000|
Obviously, no team is going to take a $107 million cap charge so any team considering this would instead use a post June 1 designation. There are multiple ways to do that. The first would be to not exercise the option and just June 1 him. Here would be the associated cap charges in 2023 and 2024 if they did that:
|Category||2023 Dead||2024 Dead|
|Total Dead Money||$77,000,000||$30,000,000|
That reduces the dead money to $77 million in 2023 and allows the team to defer $30 million to 2024.
The next option would be to exercise the option bonus and then designate him a post June 1 release. While there are some rules about renegotiating contracts and post June 1 designations I do believe that exercising the option would be allowed. If I am wrong, then this scenario does not exist.
|Category||2023 Dead||2024 Dead|
|Total Dead Money||$61,000,000||$46,000,000|
This can get the Broncos to a $61M/$46M split which is still massive. Just to put that in perspective the Broncos are estimated to have around $21M in cap room next year and this type of cut would reduce it by close to $40M (Wilson’s 2023 cap charge is currently just $22M).
In order to make the numbers work more efficiently I would assume that the Broncos would need to move up his 2024 option into 2022 by converting the salary to a signing bonus which I imagine they would have the right to do since most teams have auto conversion clauses. The reason they would need to do this in 2022 is that you lose the post June 1 designation if you modify the contract after the season.
The Broncos have about $11M in cap room to work with this year so they could, if they wanted to, convert almost all of Wilson’s 2024 salary. Let’s say they converted $35 million of it to a 2022 bonus. The new breakdown of the contract from a cap perspective would be as follows assuming they exercise the 2023 option.
|Category||2023 Dead||2024 Dead|
|2022 Bonus 2||$7,000,000||$21,000,000|
|2022 Carryover Loss||$7,000,000||$0|
|Total Dead Money||$40,000,000||$67,000,000|
This would move the split to the more reasonable $40M/$67M category. Please note that the $40M in dead money is not the actual dead money but the effective impact on the cap. Technically the dead money would be $33 million but the team would lose $7 million in carryover which effectively makes the dead money $40 million. That would still be really hard to work on the cap but in theory it would be manageable. They could further reduce these numbers by also manipulating the 2023 P5 into a 2022 signing bonus as well but it would be a minimal change and they would lose almost all ability to recover any money if Wilson signed with another team assuming he has P5 salary offsets.
Still while this may be feasible on a piece of paper, paying a player $67 million in salary guarantees to go away would pretty much be the death blow for a general manager. While the timing of the Wilson contract extension was always a terrible one I’m not sure how much the new ownership really pays attention to that. $67 million to go away on the other hand….
With all that in mind it is hard to see a scenario where Wilson leaves the team in 2023. If anything, perhaps they trade for a young QB who has already been declared a bust (see Wilson, Zach) and hope they can find something there to compete with Wilson.
2024 Salary Cap Scenarios
The real decision point for the Broncos will come in 2024. If Wilson is on the roster on the 5th day of the league year in 2024 then his 2025 salary will also be fully guaranteed and that salary is large- $37 million. Currently that is only protected for injury. This is why bringing in some competition for Wilson in 2023 makes sense because if Wilson struggles again the team should bench him if only to protect themselves from an injury kicking in the $37 million in salary protection in 2025 as well as $4 million in 2026 injury protection.
Here would be the costs associated with a regular release of Wilson in 2024.
|Total Dead Money||$85,000,000|
Clearly this is a big number so again we would be looking at a post June 1 designation. Again you should have the ability to pick up the option for 2024 and then use the June 1 before the 2025 guarantee kicks in. If I am wrong about using the June 1 after the option is exercised they would simply move that option up into 2023 with a bonus conversion to essentially get the same impact here.
|Category||2024 Dead||2025 Dead|
|Total Dead Money||$35,400,000||$49,600,000|
This gets the team a nice split across the two seasons and prevents the 2025 guarantee from kicking in. They could manipulate these numbers a bit more to change the split but this at least seems like a realistic option and they would likely recover a few million in 2024 salary if Wilson signed elsewhere.
2025 Salary Cap Scenarios
If Wilson makes it past the vesting date for his 2025 guarantees (the 5th day of free agency in 2024) to kick in then the numbers get worse for release due to that 2025 salary now being guaranteed.
|Total Dead Money||$86,600,000|
Even with a June 1 split it would be ugly.
|Category||2025 Dead||2026 Dead|
|Total Dead Money||$55,400,000||$31,200,000|
Both scenarios are worse than the 2024 release which is why I would look at Wilson’s 2023 season as being the determining factor. If he returns to playing around a Pro Bowl level you can risk the 2025 guarantee by bringing him back in 2024. If he plays in 2023 the way he has in 2022 there is no way you can justify opting into another $37 million in guarantees because of how ugly it would look to cut him in 2024.
One final thing. These numbers would all change if Wilson were traded, but I did not include any trade scenarios since I can not think of any logical reason a team would trade for him in 2023 or 2024.
Jason is the founder of OTC and has been studying NFL contracts and the salary cap for over 15 years. Jason has co-authored two books about the NFL, Crunching Numbers and the Drafting Stage, which are widely circulated in the industry and hosts the OTC Podcast. Jason’s work has been featured in various publications including the Sporting News, Sports Illustrated, NFL Network and more. OTC is widely considered the leading authority on contract matters in the NFL.