How to take most of Russell Wilson’s dead money in 2024

When Broncos coaches return to the office next week, activity level might well pick up.

At the very least, head coach Sean Payton said it’s when the full roster and coaching staff evaluations kick into high gear.

Not only that, but the remaining head coaching vacancies in the NFL will start to fill and interview requests will filter out as those new coaches begin to put together staffs.

The biggest single line item on Denver’s to-do list, of course, is making a decision with quarterback Russell Wilson. Payton said earlier this month he doesn’t expect it to be “a long, drawn-out process.”

With a return in 2024 unlikely and a trade also a long shot, the most likely outcome that the Broncos tell Wilson they are going to release him. That transaction wouldn’t actually be processed until the new league year starts in March, but Wilson could know much sooner than that and then other teams around the league would also know he’s set to be a free agent.

That would leave Denver, of course, with the matter of figuring out how to handle the $85 million in dead money that comes with releasing the veteran quarterback.

The team can get a credit against the dead money for any guaranteed base salary Wilson gets from his next team, but neither he nor a signing team will have any incentive to commit more than the veteran minimum of $1.21 million in base salary since Wilson’s making $39 million guaranteed from Denver in 2024 anyway.

The most common ways Wilson’s dead money gets considered are to either split it with a “post-June 1 designation” or to take the entire $85 million in 2024.

The commonly cited figures on the post-June 1 split are $35.4 million in 2024 and $49.6 million in 2025.

If Denver doesn’t exercise an option bonus in Wilson’s contract, however, it could take the post-June 1 split as $53 million in 2024 and the last $32 million in 2025.

Essentially, the choice is whether allocate $17.6 million as 2024 base salary or kick it to 2025 as prorated bonus.

It’s worth repeating that this, regardless of structure, sets up to be more than twice the previous record for largest dead-money hit for a single player in NFL history. Broncos general manager George Paton said it best earlier this month when he said, “This would be extreme.”

But he also added, “We’ve prepared for any scenario with (vice president of football administration) Rich Hurtado, who runs our cap. We’ll have flexibility either way to do what we need to do”

The Broncos, even given a salary cap picture that currently shows the club starting the offseason $24 million over the projected cap, according to OvertheCap data, have the flexibility to take a big chunk of the dead money up front.

Should they?

Let’s compare the $35.4/$49.6 million split and the $53/$32 million split using $242 million as the projected 2024 cap number and then adding the same percentage increase to 2025 for a $261.4 million cap.

In the first scenario, Wilson’s dead money takes up 14.63% of the 2024 cap and 18.97% of the 2025 cap.

In the second scenario, it takes up 21.9% of the 2024 cap and 12.24% of the 2025 cap.

By total percentage of cap space, the first option is ever-so-slightly more efficient accounting than the second. And perhaps that will be enough to convince Denver that it’s the way to go.

Consider two factors regarding the $53 million-in-2024 option, though: The first is that the Broncos are actually set up well to make the space. They would be wise to avoid kicking the can down the road with all or most of their highly paid veteran players, but through a smart combination of extensions, restructures, cuts and perhaps a trade or two, Denver can create a lot of space and use it to take most of Wilson’s hit in Year 1 while still having enough room to fill out a roster and spend modestly in free agency.

OvertheCap founder Jason Fitzgerald put it this way on social media earlier this month: The Broncos “need to do a lot of housecleaning, but they can make cap room easier than most.”

It makes sense to take advantage of the flexibility that exists this year and to re-tool your roster in that mold now rather than going part way now and part way a year from now when faced with a bigger dead cap pinch in real dollars and as a percentage of salary cap.

The second factor is that Denver already had nearly $10 million in dead cap for 2024 as it is relating to the contracts of OLBs Randy Gregory and Frank Clark, kicker Brandon McManus and returner Montrell Washington. So even with $35.4 million more for Wilson, they’re pushing past $45 million before any other moves.

If they take $53 million for Wilson in 2024, they could reasonably stay at or below the $75 million range that both Tampa Bay and the Los Angeles Rams played with in 2023. That doesn’t mean Denver will make the postseason like those teams, but it could take the big lump up front, make decisions on a set of veterans that are coming anyway and then be in much clearer position to build by 2025.

In a set of options that features no slam dunks and some pain no matter what, this one’s at least worth consideration.

Number to know: .500

That’s the Broncos’ record this season against the eight teams in the divisional round. Denver played a whopping six games against five of the teams. Payton’s team split with the Chiefs, beat Green Bay and Buffalo and lost to Houston and Detroit.