The Broncos and outside linebacker Von Miller resumed negotiations late last week in an effort to find the common ground necessary for an agreement by Friday's 4 p.m. ET deadline for franchise players to sign long-term deals. After this July 15 deadline passes, the Broncos are prohibited from signing the Super Bowl 50 MVP to a multi-year contact until the end of the 2016 regular season on Jan. 1, 2017.

Miller has threatened to sit out the upcoming season if a long-term deal isn't in place before the deadline.

A general framework for a contract was created prior to talks breaking down on June 7. The two sides are comfortable with $114.5 million over six years, which will make Miller the NFL's highest paid non-quarterback at $19,083,333 per year.

Guaranteed money and cash flow of the deal are the primary sticking points.

Denver's offer, which was rejected by Miller, reportedly had $58 million in overall guarantees -- $38.5 million was fully guaranteed at signing, of which $21.5 million was a signing bonus, and $39.8 million was in the first two years of the proposed contract.


During the impasse, Colts quarterback Andrew Luck and Eagles defensive lineman Fletcher Cox signed new deals that are having a bearing on negotiations. Luck's five year, $122.97 million contract extension raised the bar in most key contract metrics. He received $87 million in overall contract guarantees, $60 million fully guaranteed within 12 months and a three year cash flow of $75 million. His $47 million fully guaranteed at signing is the second most in the NFL to Dolphins defensive tackle Ndamukong Suh's $59.955 million. Luck's $3 million fifth day of the 2017 league year roster bonus is included in the $47 million because it was guaranteed for skill and injury at signing and became fully guaranteed a couple of days later.

Cox's six-year, $102.6 million extension has a non-quarterback record $63.299 million in guarantees, of which $36.299 million is fully guaranteed at signing, and $55.549 million of Cox's deal will be fully guaranteed early next March. The Broncos made a necessary concession after talks recommenced by agreeing to have Miller's 2018 guarantee in his third contract year vest on a comparable time frame as Cox's.

Miller and the Broncos should be able to bridge their differences.

Examining the cash flow in the contracts of the highest paid defensive player over the last 10 years, which conveniently has typically signed a six-year deal, and the financial relationship between the annual NFL leader and defensive player leader in contract guarantees post-2011 lockout would be constructive. These factors and Denver's preferred structure with their most lucrative contracts have been taken into account to create a deal that should be acceptable to Miller and the Broncos.

Highest paid defensive player cash flow

Five players have been the NFL's highest paid defensive player on six-year contracts in their first multi-year deal after playing out their rookie contracts during the last 10 years. Dwight Freeney (Colts) and Jared Allen (Vikings) received contracts as franchise players. Julius Peppers, Mario Williams and Suh signed with the Bills, Bears and Dolphins respectively as unrestricted free agents. Justin Houston became the NFL's second-highest defensive player last July also with a six-year deal as the Chiefs' franchise player.

The percentage of money after each contract year can be used as an objective barometer for the cash flow in a Miller deal. The percentages for the deals these six players signed are in the chart below.

Name Team Year Contract Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Freeney Colts '07 $72M 21.88% 43.75% 52.34% 64.65% 80.49% 100%
Allen Vikings '08 $73.26M 22.18 32.76 52.39 64.65 80.51 100
Peppers Bears '10 $84M 23.8 37.5 48.21 63.69 80.36 100
Williams Bills '12 $96M 26.04 41.67 55.21 69.38 84.48 100
Suh Dolphins '15 $114.375M 23.17 43.72 52.46 67.32 83.93 100
Houston Chiefs '15 $101M 21.29 36.14 52.48 67.33 82.67 100
23.12 39.49 52.27 66.4 82.32 100

The cash flow for Miller's six-year, $114.5 million deal based on averaging the percentage of money earned after each contract year for the six players is as follows: Salary deferrals weren't taken into account with the percentages. The base value of Peppers and Williams' deals were used. Incentives earned by while playing under these contracts weren't included when calculating the percentages.

  • 2016: $26,473,510
  • 2017: $45,216,745
  • 2018: $59,851,314
  • 2019: $76,032,854
  • 2020: $94,255,083
  • 2021: $114,375,000

Guaranteed money

Luck's $87 million in contract guarantees is a 33.85 percent increase over the previous standard of $65 million held by quarterbacks Eli Manning and Philip Rivers in their respective contracts with the Giants and Chargers. Six million dollars of Luck's $87 million in a fifth day of the 2019 league year (early to mid-March) roster bonus is guaranteed for injury only. Cox's $63.299 million raised the bar a relatively modest 5.5 percent from Marcell Dareus' defensive player record of $60 million in overall guarantees set last year in his six year extension with the Bills.

The chart below looks at the financial difference for the player, which is a quarterback, and the defensive player with the most contract guarantees in each of the last five years.

Year QB Guarantees Defense Guarantees Difference
2011 Tom Brady $48,500,000 Julius Peppers $42,000,000 15.48%
2012 Drew Brees $60,500,000 Mario Williams $50,000,000 21%
2013 Drew Brees $60,500,000 Mario Williams $50,000,000 21%
2014 Colin Kaepernick $61,000,000 J.J. Watt $51,876,385 17.59%
2015 Philip Rivers $65,000,000 Marcell Dareus $60,000,000 8.33%
Total $295,500,000 $253,876,385 16.4%

By applying the 16.4 percent disparity between contract guarantee leaders of the two groups to Luck's $81 million that can become fully guaranteed, Miller would be justified in insisting upon approximately $69.5 million in similar guarantees.The six-year deal containing $50 million in guarantees Sam Bradford signed in 2010 as the first pick overall of the NFL Draft was excluded from the analysis. Rookie contracts are dictated by an entirely different marketplace than veteran deals. Kaepernick was used instead of Brees in 2014 despite just under $13 million being fully guaranteed at signing, which was about one-third of the fully guaranteed amount in other quarterback deals (Jay Cutler and Tony Romo) with a comparable average yearly salary.

Suggested contract and yearly breakdown

  • Signing bonus: $26 million ($13 million within 14 days of execution; $6 million payable in equal installments over the regular season concurrent with base salary; $7 million deferred until March 15, 2017)
  • Guaranteed money: $61.5 million
  • Fully guaranteed at signing: $45 million
  • Deal total: $114.5 million
  • Contract length: 6 years
  • Average per year: $19,083,333

Here's a year-by-year breakdown:

Year Base salary Signing bonus Cap number Cash flow Percent of deal
2016 $1,000,000 $5,200,000 $6,200,000 $20,000,000 23.58%
  • Guaranteed for skill, injury and salary cap-no offsets
Year Base salary Signing bonus Cap number Cash flow Percent of deal
2017 $18,000,000 $5,200,000 $23,200,000 $45,000,000 39.3%
  • Guaranteed for skill, injury and salary cap-no offsets
Year Base salary Signing bonus Cap number Cash flow Percent of deal
2018 $16,500,000 $5,200,000 $21,700,000 $61,500,000 53.71%
  • Guaranteed for injury; skill and salary cap on fifth day of 2017 league year -- no offsets
Year Base salary Signing bonus Cap number Cash flow Percent of deal
2019 $16,500,000 $5,200,000 $21,700,000 $78,000,000 68.12%
  • $3.5 million guaranteed for skill, injury and salary cap on fifth day of 2018 league year (no offsets) if named to the Pro Bowl or first/second team All-NFL in 2016 and 2017
Year Base salary Signing bonus Cap number Cash flow Percent of deal
2020 $18,000,000 $5,200,000 $23,200,000 $96,000,000 83.84%
  • Option year-exercise period is five days after 2019 league year Super Bowl and one day prior to start of 2020 league year; $3 million guaranteed for skill, injury and salary cap if exercised
Year Base salary Signing bonus Cap number Cash flow Percent of deal
2021 $18,500,000 --- $18,500,000 $114,500,000 100%
  • Option year-exercise period is five days after 2020 league year Super Bowl and one day prior to start of 2021 league year; $3 million guaranteed for skill, injury and salary cap if exercised

Making sense of the suggested contract

Denver's offer before the impasse contained an uncharacteristically large $21.5 million signing bonus. Demaryius Thomas currently has the biggest signing bonus on the team at $11 million. Miller's has been increased by $4.5 million to be consistent with Dareus, Suh and Cox's respective $25 million, $25.5 million and $26 million signing bonuses. Since it is a common practice of the Broncos to defer a significant portion of a signing bonus to the following March 15, Miller isn't getting his entire signing bonus before the season ends, like Dareus and Cox.

An acceptable alternative to increasing Miller's signing bonus would be for the additional $4.5 million to be a roster bonus earned a few days after the contract's signing. Ryan Clady and Thomas had four- and five-day lag times with their respective first contract year roster bonuses.

The cash flow is essentially the same as in the analysis of the highest paid defensive players of the last 10 years. A couple of minor adjustments have been made to reflect the most relevant defensive player deals currently in the marketplace.

Forty-five million dollars as a two-year cash flow, which is also fully guaranteed at signing, would be substantial concessions by the Broncos. It would represent an almost 17 percent increase in the fully guaranteed money from the June proposal. This $45 million would be the third most in the NFL fully guaranteed at signing. Miller's $61.5 million would also replace Luck as the leader in money fully guaranteed within 12 months.

Denver would be justified in keeping Miller's overall guarantees below Cox's $63.299 million with the addition of $6.2 million to the two year cash flow. Miller would still have the opportunity to eclipse Cox with $65 million by continuing to earn honors like he has throughout his NFL career.

Miller's guarantees lack offsets, like the Clady and Thomas contracts. An offset clause reduces the guaranteed money a team owes a player when he is released by the amount of his new deal with another team. Without an offset, the player receives his salary from the team that released him as well as the full salary from his new contract with another club (also known as "double dipping").

The increased signing bonus and lack of offsets ensure that Miller's 2018 salary will become fully guaranteed next March. It's too cost prohibitive to part ways with Miller except through a trade. The Broncos would have a $38.8 million salary cap charge in 2017 from releasing him. $15.6 million of signing bonus proration from Miller's 2018 through 2020 contract years would immediately hit Denver's books. The Broncos would be on the hook for Miller's $18 million 2017 base salary without any way to get relief in addition to having $20.8 million of 2017 cap obligations from his signing bonus.

Miller's yearly salaries are completely in base salary. Denver deals rarely have workout bonuses. Per game roster bonuses are starting to become more prevalent in Broncos contracts but would likely be a deal breaker for Miller.

Lastly, the option year concept is consistent with some of Denver's other high end contracts (Thomas, Chris Harris and Derek Wolfe). Miller's two separate options where a small portion of his base salary becomes fully guaranteed when that particular year is picked up was used in Brandon Marshall's recent extension.