The recent talk about whether or not the Broncos really tried to trade Peyton Manning probably raised more attention than warranted. Nonetheless, it does provide yet another reminder that the odds are good that this could be the last year that Manning suits up in orange. But the more pressing question is whether or not that will be the same for Brock Oswelier. Remember, it’s Osweiler, not Manning, that’s the quarterback on the roster entering a contract year.
If you’re a former IAOFM reader, you may recall that Bob and I had some thoughts on how to extend Osweiler. I think this subject could use a little more detail in a full article.
First things first: should the Broncos extend Osweiler? And should Osweiler want to extend?
It’s important to remember that Osweiler was primarily drafted as an insurance policy more than anything else, including being groomed as the future starter. If all went well with Manning (and it did), it meant that Osweiler was going to spend most (and most likely all) of his rookie contract holding the clipboard.
There is something to be said for waiting until much of training camp has been conducted to see if Osweiler is the type of quarterback that the new coaching staff wants. And as I mentioned before, I see Gary Kubiak making that determination on substance instead of style. The four quarterbacks he has primarily coached (John Elway, Brian Griese, Jake Plummer, and Matt Schaub) had very diverse styles of play.
But while acknowledging that no one knows better than the Broncos as to whether Osweiler can start in the NFL, a look at what veteran quarterbacks are available in 2016 should be very good reason for the Broncos to pursue some kind of extension. Forget dreaming about Eli Manning, Philip Rivers, or Russell Wilson: the odds of any of them being available are so low that it’s not worth considering at this point. Instead, as is usually the case with the quarterback position, you’re looking at a couple very questionable starters like Sam Bradford or Nick Foles, and a whole lot of perennial backups. With the information I have, I’d much rather roll with Osweiler.
But when it comes to contracts, you must always remember to consider the interests of the player in addition to the team. So is in Osweiler’s best interest to extend now? On the one hand, he is an unproven commodity. But on the other, teams are desperate to secure the quarterback position, and it causes the contracts of veterans at the position to be inflated. Osweiler also has the advantage of knowing that there’s no practical way the Broncos can stop him from entering free agency next year. Osweiler’s agent will need to judge the market wisely to advise whether that’s a recommended path.
What would Osweiler’s value be on the market?
This is a question that’s very difficult to answer because there’s scant precedent for a player in Osweiler’s situation. The closest comparable would be Ryan Mallett, also drafted as insurance for Tom Brady. Mallett would end up being traded for minimal draft considerations, he failed to win the starting job last season, and his team has signed another quarterback last offseason. That’s not the type of precedent that Osweiler wants to fall under.
But what does work in Osweiler’s favor is the fact that the distinct second tier of veteran quarterbacks is still not that shabby. Marginal starters like Brian Hoyer, Matt Cassell are getting paid more than $5 million per year, and even the likes of Mark Sanchez and Josh McCown are above $4 million APY. Combine this with the increasing salary cap and the quarterback premium, and I see no reason why Osweiler should be able to pursue something similar in value—certainly higher than Mallett’s $3.5M APY.
The structure of the contract is just as important as the value for all parties involved.
I mentioned above that there’s a “distinct second tier” of quarterback contracts. It also must be emphasized that there is an extreme distance between the first and second tiers. If you set aside Brady’s team friendly contract, and Bradford’s old CBA deal, the space between Rivers and Jameis Winston is a remarkable $9M APY. Osweiler will not want to lock himself into a long term deal that severely undervalues him if he proves himself to be starting material. Conversely, the Broncos will also not want to be locked into a long term deal that overvalues him if he doesn’t prove himself. However, the inverse of the long term deal—a one year “prove it” deal—isn’t in the best interest for anyone either. The Broncos risk being exposed to a possible franchise tag battle in the $20M APY range, and Osweiler risks losing perhaps his only shot at a big payday.
A proposed contract
The structure is based largely on Bob’s suggestion in this comment, but I’ve tweaked some things to account for the market at hand.
Both sides should agree on a two-year extension, meaning Osweiler would be under contract through the 2017 season. Two extra years guarantees that Osweiler will have at least one year where he is on the roster and Manning is not. Any length further than this risks distorted value for both the Broncos and Osweiler.
APY and Total Value
The Broncos should not want to go any higher than the $5.25M APY established by Hoyer and Cassel. Osweiler should strive to push above the $4.5M APY of Sanchez. I’ll set the compromise at $4.75M APY, for a total value of $14.25M in new money. This is a shade above McCown’s contract ($14M, $4.67APY) in both regards.
Among the quarterbacks mentioned above, McCown has the highest guarantees at $6.25M, while Hoyer has the lowest at $4.75M. The midpoint of the two is $5.5M, but to account for the Broncos’ harder line in negotiations, I’ll set Osweiler’s guaranteed money at $5M.
Options to Void
Here is where Osweiler’s contract would be unique from the likes of Hoyer, McCown, Cassel, and Sanchez. Should Osweiler start eight or more games in any season, both he and the Broncos gain an option to void any future years remaining in the contract. I see this feature as a key for both sides. This allows Osweiler to pursue a better deal if he becomes a proven starter, and it allows the Broncos to cut ties if he doesn’t.
- 2015: Osweiler gets a signing bonus of $3M. No change is made to his 2015 rookie deal year otherwise. This bumps Osweiler’s cap number for 2015 up only $1M, to about $2.19M. It also assures that Osweiler’s dead money will be no greater than $2M in 2016 should ways be parted. This is important for the purposes of keeping 2016’s cap as open as possible for possible mega-contracts to Demaryius Thomas and/or Von Miller.
- 2016: This year can be voided by either the Broncos or Osweiler if he starts eight or more games in 2015. Suffice to say, the only way this happens is if Manning suffers a lengthy injury early in the year, so the assumption is that this year sticks. Osweiler gets a base salary of $4.5M, $2M of which is guaranteed for injury only in 2015, and becomes fully guaranteed five days after whenever Manning’s 2016 year would become fully guaranteed. (The timing on this guarantee gives the Broncos some extra time in the case of another contract battle with Manning, or if Manning takes his time on deciding whether to come back in 2016). The total cap number would be $5.5M.
- 2017: Osweiler gets a base salary of $6.75M, but none of it is guaranteed. The total cap number if retained would be $7.75M. $6.75M represents a number that would be better than the APYs of all second-tier QBs as of 2015 (just above Winston’s $6.34M APY), but would probably be slightly eclipsed by 2017. This year can be voided by either the Broncos or Osweiler if he starts eight or more games in 2016, and unlike the 2016 year, the expectation would be that one side would void it. Such a void would stick the Broncos with only $1M of dead money from his signing bonus in 2017.
Here’s a tabular view for convenience:
|Year||Base Salary (Guaranteeed)||Prorated Bonus||Cap Number|
Total new money: $14,250,000 with $5,000,000 guaranteed; $4,750,000 average per year. Asterisks indicate both a team option and player option to void if Osweiler starts eight or more games in the prior season.