The Broncos acquired Russell Wilson last March to provide the stability at quarterback that's been missing since Hall of Famer Peyton Manning retired after a Super Bowl winning 2015 season. The Seahawks received multiple players (tight end Noah Fant, defensive lineman Shelby Harris and quarterback Drew Lock), 2022 and 2023 first-round picks, 2022 and 2023 second-round picks and a 2022 fifth-round pick for Wilson and a 2022 fourth-round pick.
The Commanders reportedly offered the Seahawks three first-round picks, but Wilson's no trade clause, which he waived for the Broncos, gave him control over his destination. Wilson had two years remaining on his contract running through the 2023 season for $51 million when traded.
The trade has been a disaster for the Broncos. Wilson is clearly having the worst season of his 11-year NFL career. He is on track for career lows in completion percentage (60.8%), passer rating (82.5) and touchdown passes (13). Wilson ranks 29th, 28th and tied for 24th in the NFL in these respective categories. Instead of contending for a playoff berth as expected when obtaining Wilson, first-year head coach Nathaniel Hackett was fired with a 4-11 record after a 51-14 blowout loss to a depleted Rams team.
The Broncos compounded the situation by giving Wilson a five-year, $245 million contract extension in August shortly after the franchise's sale to a new ownership group led by Walmart heir Rob Walton. Wilson's shocking decline has raised questions about his longevity in Denver. A trade isn't a realistic possibility at this point because of Wilson's poor play. Wilson's contract holds the answers to these questions. There aren't any easy solutions for the Broncos because of the new deal.
Wilson's contract/Denver's 2023 salary cap
Wilson's $49 million per year extension runs though the 2028 season because of the two pre-existing contract years. Overall, he is under contract seven years for a total of $296 million. The deal contains $165 million in guarantees with $124 million fully guaranteed at signing, which is the second-most ever in an NFL contract. The $124 million fully guaranteed at signing includes a $50 million signing bonus, which is prorated on the salary cap at $10 million annually from 2022 through 2026.
Wilson's deal contains two option bonuses. The seldom used double option bonus is one of the more complicated structures with NFL contracts.
Wilson's fully guaranteed $28 million 2023 base salary reduces to $8 million provided a $20 million payment is made to exercise an option for his 2027 contract year worth $45 million. The window to exercise this option is the first day of the 2023 league year (March 15) through the fifth day of the 2023 league year (March 19).
From a salary cap standpoint, the presumption is option years will be picked up. Option bonuses are prorated over the life of a contract (up to a maximum of five years), including the option years, beginning in the league year when the option is exercised. This means the $20 million option bonus is prorated on the salary cap at $4 million annually from 2023 through 2027. Wilson is counting on Denver's 2023 salary cap at $22 million. His cap number consists of $10 million in signing bonus proration, $4 million in option bonus proration and the reduced $8 million base salary.
The second option must be picked up between the first and fifth days of the 2024 league year (mid-March 2024). Paying the required $22 million for Wilson's 2028 contract year worth $50 million will drop his fully guaranteed $39 million 2024 base salary to a fully guaranteed $17 million. Wilson's 2024 cap number is listed as $35.4 million. The components are $10 million of signing bonus proration, $4 million of option bonus proration (the first option), $4.4 million of option bonus proration (the second option) and Wilson's reduced $17 million base salary.
The Broncos are in decent salary cap shape for 2023. Under offseason accounting rules, only the top 51 salaries (i.e.; cap numbers) matter. Denver has just under $221.25 million in 2023 cap commitments with 49 players under contract, according to NFLPA data. There is $10.1 million of existing cap space that can be carried over to 2023. Assuming the 2023 salary cap is set in the $225 million neighborhood, the Broncos should have right around $12 million of cap room.
2023 release: No post-June 1 designation/no option exercise
- 2023 salary cap increase: $85 million
- 2023 dead money: $107 million
Cutting Wilson conventionally in 2023 is virtually impossible. The Broncos would have $107 million in dead money, a cap charge for a player no longer on the roster, by releasing Wilson before exercising the option for his 2027 contract year.
The largest individual dead money charge in NFL's history is the $40.525 million the Falcons have in the current 2022 league year for trading quarterback Matt Ryan to the Colts last March. $107 million in the 2023 league year would be more than two and a half times Ryan's record-setting amount.
Without exercising the option, Wilson's fully guaranteed $28 million 2023 base salary would count entirely on Denver's books. There also wouldn't be any of the proration for the $20 million option bonus that wouldn't be paid.
The dead money would consist of Wilson's fully guaranteed $28 million 2023 base salary, $40 million of signing bonus proration relating to Wilson's 2023 through 2026 contract years and the $39 million base salary guarantee from 2024. The second option bonus in 2024 for $22 million wouldn't be applicable, either. Salary guarantees from future contract years accelerate into the current year when a player is released.
Wilson's guarantees have offsets, so Denver would get some nominal 2023 cap relief from the contract Wilson signed with another team for next season. It's hard to imagine Wilson getting a lucrative contract somewhere else given his performance this season. Wilson would be off Denver's books beginning in 2024.
2023 release: Post-June 1 designation/no option exercise
- 2023 salary cap increase: $55 million
- 2023 dead money: $77 million
- 2024 dead money: $30 million
Releasing Wilson with a post-June 1 designation isn't feasible, either. A team can release two players each league year before June 2 using a post-June 1 designation that will be treated under the cap as if released after June 1. With a post-June 1 designation, a team is required to carry the player's full cap number until June 2 even though he is no longer a part of the roster. The player's salary comes off the books at that time unless it is guaranteed. Since Wilson's $28 million salary for 2023 is fully guaranteed, it would remain a Denver cap charge.
Only the current year's bonus proration counts toward the cap with players released using a post-June 1 designation. The acceleration of the bonus proration in future contract years is delayed until the following league year, which typically begins in early to mid-March. The $30 million in signing bonus prorated from the 2024 through 2026 contract years would be a 2024 cap charge.
There isn't any post-June 1 treatment with future salary guarantees. The $39 million 2024 base salary guarantee would still accelerate into 2023 like in the no post-June 1 designation/no option exercise scenario.
The total dead money is still $107 million. It's taken over two years with $77 million in 2023 and $30 million in 2024 instead of all during the 2023 league year. There would be $5.4 million of cap savings in 2024 considering Wilson's listed 2024 salary cap number is $35.4 million. Wilson would be off Denver's books beginning in 2025 with use of a Post-June 1 designation.
2023 release: Post-June 1 designation/option exercised
- 2023 salary cap increase: $39 million
- 2023 dead money: $61 million
- 2024 dead money: $46 million
Releasing Wilson with a post-June 1 designation after exercising the first option isn't as cap prohibitive for Denver as the previous two methods, but adding $39 million in 2023 cap charges still isn't realistic when Denver has approximately $12 million in projected cap space.
There's still $107 million in total dead money but with a different allocation over 2023 and 2024. By exercising the option, the $20 million payment that's prorated at $4 million annually from 2023 through 2027 comes into play. The 2023 dead money would be the $10 million in 2023 signing bonus proration, the $4 million in option bonus proration, the 2023 base salary reduced to $8 million base salary and the $39 million 2024 base salary guarantee.
The $30 million in signing bonus prorated from the 2024 through 2026 contract years and the $16 million in option bonus prorated from the 2024 through 2027 contract years would be 2024 cap charges. The $46 million in 2024 dead money would add $10.6 million to Denver's 2024 cap charges, but Wilson would be off the books starting in 2025.
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2024 release: No post-June 1 designation/no second option exercise
- 2024 salary cap increase: $49.6 million
- 2024 dead money: $85 million
Releasing Wilson in 2024 will be on the table if he doesn't have a bounce-back 2023 season. Doing it conventionally is the least cap-effective manner. The Broncos would have $85 million in 2024 dead money by releasing Wilson before exercising the option for his 2028 contract year.
There's an additional dynamic that would impact the timing of his release. Wilson's $37 million 2025 base salary was guaranteed for injury at signing. The $37 million becomes fully guaranteed on the fifth day of the 2024 league year. The Broncos surely wouldn't commit another $37 million to Wilson in salary (and dead money) if parting ways with him in 2024, regardless of the manner chosen.
The $85 million would consist of the $30 million in signing bonus prorated from the 2024 through 2026 contract years, the $16 million in option bonus prorated from the 2024 through 2027 contract years and Wilson's fully guaranteed $39 million 2024 base salary. Once again, Wilson would be off Denver's books starting in 2025.
2024 release: Post-June 1 designation/no second option exercise
- 2024 salary cap increase: $17.6 million
- 2024 dead money: $53 million
- 2025 dead money: $32 million
The 2024 cap savings are more manageable by using a post-June 1 designation without exercising the second option but not optimal. Any bonus proration after 2024 would be a 2025 cap charge for Denver. The 2024 dead money would be the $10 million in signing bonus proration, the $4 million in option bonus proration and the $39 million 2024 base salary guarantee.
The $20 million in signing bonus prorated over the 2025 and 2026 contract years as well as the $12 million in option bonus prorated from the 2025 through 2027 contract years would be 2025 cap charges. Denver would pick up $23.4 million in cap room since Wilson's 2025 cap number is $55.4 million. Wilson would be off Denver's books beginning in 2026.
2024 release: Post-June 1 designation/second option exercised
- 2024 salary cap charge: $35.4 million (no change)
- 2024 dead money: $35.4 million
- 2025 dead money: $49.6 million
Releasing Wilson with a post-June 1 designation after exercising the second option would be salary cap neutral for 2024. Exercising the second option would put the $22 million payment that's prorated at $4.4 million annually from 2024 through 2028 into play. The 2024 dead money would equal Wilson's listed 2024 35.4 million cap number with the same components ($10 million in 2024 signing bonus proration, $4 million in first option bonus proration, $4.4 million in second option bonus proration and the 2024 base salary reduced to $17 million).
The $20 million in signing bonus prorated from the 2025 and 2026 contract years, the $12 million in option bonus prorated from the 2025 through 2027 contract years and the $17.6 million in option bonus prorated from the 2025 through 2028 contract years would be 2025 cap charges. This $49.6 million in 2025 dead money would represent a $5.8 million cap savings for the Broncos from Wilson's $55.4 million cap number. Denver wouldn't have any more cap charges for Wilson after 2025.
Final thoughts
Denver doesn't have any good options for parting ways with Wilson. Had the Broncos left Wilson's contract intact instead of giving him an extension, there would have been the option to pick up $27 million in 2023 cap space by walking away during the offseason. I suspect Wilson would have gotten a second season in Denver anyway because of his massive acquisition cost.
The Broncos will likely let Wilson's $37 million 2025 base salary guarantee vest and keep him around at least for 2024 -- but only if he reverts back to the Pro Bowl form he previously displayed next season. Otherwise, Denver probably releases Wilson prior to the fifth day of the 2024 league year to prevent being on the hook for the $37 million in 2025 after exercising the second option and using a post-June 1 designation. Denver wouldn't gain or lose any 2024 cap room this way because of Wilson's departure but would have a $49.6 million cap charge in 2025 relating to him.
