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Examining A Possible Von Miller Extension

As I’ve written on other Broncos on or entering contract years (Demaryius Thomas, Brock Osweiler), as well as commented on other articles, I’ve given hints as to my opinion on how negotiations would go with the most important player coming up on a new deal. Thus, I should put my entire thoughts on the matter in a full article.

First things first: Miller is going to get paid, and paid very well.

When I examined an Osweiler extension, I expressed difficulty in crafting actual numbers for him, as there was scant precedent for his situation. With Miller, precedent is not an issue. The consensus is that he is one of, if not the, best at his position, and well within the elite tier of all defensive players in the NFL. When considering dollar amounts for Miller, one must compare against the cream of the crop among defenders.

In his previous article, Bob suggested that Miller “isn’t going to exceed the total [JJ] Watt got in his contract”. On the surface, this makes sense, as Watt is the only player that has the clear argument of being better than Miller. But remember, contracts do not end up as a perfect reflection of actual talent and accomplishments. The problem with using Watt as a ceiling for Miller is that sitting just under Watt’s $16.667M APY is Mario Williams of the Bills at $16M APY, who is a fellow edge rusher to boot. Furthermore, Williams actually gained more fully guaranteed money ($24.9M) than Watt did ($20.9M). Few are going to argue that Williams is better than a younger Miller at this point in their careers. Thus, if Miller holds firm to that APY floor, this leaves a very narrow window of $667k to cram Miller into if Watt is the ceiling. Joel Corry had a very good article in which he does exactly that with Justin Houston for the Chiefs (more on him later), suggesting that $16.25M APY would be fair.

APY may matter more in negotiations than guarantees

If Miller does try to push above Watt to the range of $17M APY and above, I would equally expect the Broncos to push back by demanding lower guaranteed money upon signing. This would not be out of the ordinary for the team: as my good colleague Jason Fitzgerald puts it, the Broncos “typically do not offer true guarantees beyond the first year”. Miller has also lost some leverage on the guarantee front due to his suspensions he sustained in 2013. For that reason, Miller may have to demonstrate that he’s willing to go “pay as you go” for much of his extension, proving that he has a high financial interest in not getting suspended again.

A way to navigate around the guarantee question is to slightly backload Miller’s contract so that his base salaries are higher in later years. By doing so, the Broncos could retain a similar feature to Watt’s contract in which the first two new years of his contract are guaranteed soon after the new league year, but the total of those guarantees would be less than what Watt earned. This would also assist the Broncos in potential cash flow issues as they also try to extend Thomas, Osweiler, or other impending expiring contracts.

It would be great for the Broncos if they extended Miller before the Chiefs extended Justin Houston…but why would Miller cooperate?

As I’ve mentioned before, I don’t expect to hear any news about a Miller extension until after July 15 at the very earliest. Part of this is because the Broncos have more urgent negotiations with Thomas before that date, but also because the Chiefs have their own similar battle with Justin Houston, a player who also happens to share a very similar position to Miller. By all indications, Houston has been willing to play hardball with the Chiefs, and I would expect that he, too, is trying to surpass the Watt ceiling. If Houston were to succeed, that would only push the asking price for Miller even higher.

Thus, it would be in the best interest of the Broncos to come to a deal with Miller before the Chiefs do with Houston. If the Chiefs and Houston fail to come to a long term deal before July 15, he will have no choice but to play 2015 under the one-year franchise tender. That would give the Broncos ample time to secure an extension for Miller without the pressure of a possible Houston extension. Instead, it would turn the tables on the division rival Chiefs. If the Broncos secure a hometown discount, it could make Houston even more contentious in negotiations. Or, if Miller resets the market, it could force the Chiefs to dole out even more money in order to retain Houston long term.

But all of this hinges on Miller being willing to talk about an extension at this point. And from a pure financial standpoint, why should he? He very much has an interest in waiting until negotiations with Houston are resolved, even if that drags things out to 2016 or even 2017. Like Houston, Miller can always fall back upon the franchise tag, which should be well above $13 million for 2016.

Although negotiations could be tough, I seriously doubt the Broncos will ever let Miller sniff free agency.

Under John Elway (and much unlike Mike Shanahan), the Broncos have been more than willing to let players walk if the price isn’t right, and to take compensatory draft picks and move on. But Miller is one player where I think that general mindset won’t fly. Miller has been the signature piece of the resurrection of the Broncos’ defense, both on the field and symbolically as Elway’s first ever draft selection. I’ve worried in the past about several excellent players leaving in free agency, and will worry about several more in the future. Miller is the one player I don’t have that worry for.