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Analyzing The Impact Of Von Miller’s Extension

UPDATE (2:30 PM MT): Miller actually got a $17 million signing bonus and $6 million roster bonus in 2016.  This post has been corrected to adjust accordingly.

Per contract details reported by Mike Klis, the breakdown of Von Miller’s new six-year, $114.5 million extension will looks similar to this:

Year  Salary/Roster Bonus*
Prorated Bonus Cap Number Dead Money
(pre 6/1)
Cap Savings
2016 $8,000,000 $3,400,000 $11,400,000 $42,000,000 ($30,600,000)
2017 $17,000,000 $3,400,000 $20,400,000 $30,600,000 ($10,100,000)
2018 $19,000,000 $3,400,000 $22,400,000 $29,800,000 ($6,800,000)
2019 $17,500,000 $3,400,000 $20,900,000 $15,800,000 $5,100,000
2020 $18,000,000 $3,400,000 $21,400,000 $3,400,000 $18,000,000
2021 $18,000,000 $18,000,000 $0 $18,000,000

*Klis did not specify the breakdown between base salary and roster bonuses in his report, but for purposes of the salary cap this is irrelevant.  What it will mean is that Miller gets more money in his pocket before each season starts from whatever money is assigned to the roster bonus in question.

Let’s take a look at the facts, and then I’ll cast some opinions on what it could it could mean for the Broncos’ future:

Guaranteed money

As was frequently reported over the saga of negotiations, the amount of guaranteed money was the primary sticking point in the process.  As always, the definition of “guaranteed” is very ambiguous.  There are three types of “guaranteed” money that Miller’s contract sets him up for:

  • “Actual” guarantees (fully guaranteed at signing): $42 million ($23 million signing bonuses, and $19 million in all 2016 and 2017 salaries and bonuses.)
  • “Practical” guarantees (injury-only guarantee, but the Broncos would lose cap space if they cut him to avoid these guarantees): $61 million (to the above, add $19 million, consisting of all 2018 salary and bonuses that will become fully guaranteed March 2017.)
  • “Potential” total guarantees (injury-only guarantee that would not cause cap space loss): $70 million (to the above, add $9 million of 2019 salary and/or bonuses that will be fully guaranteed March 2018.)

As you can see, when the triggers of these guarantees are put in place, it makes Miller practically uncuttable from the Broncos for the next three seasons.  The only way the Broncos could escape from this contract without taking a major cap hit in that range would be to find a trade partner in 2018.

Looking at this, it’s pretty evident that the Broncos caved to Miller on his guarantee demands.  Even if you include Fletcher Cox’s fifth-year option in his extension, Miller has surpassed those guarantees, which for Cox were $36.299 million actual, $55.549 practical, and $63.299 potential.  But you know what?  I personally don’t have a problem with that, and clearly the Broncos didn’t in the end either.  That’s because, despite the protestations of Raiders fans and others, Miller might be the only player capable of challenging JJ Watt for title of the best defensive player in the league.  Yes, there may be future players that try to squeeze players after seeing the Broncos cave on guarantees, but those future players aren’t Von Miller.  As the team proved with the likes of Julius Thomas and Malik Jackson, they aren’t afraid to let their own walk if the market is way out of whack with what what their opinion of their value is–and they’re not afraid to pony up if the situation warrants it.

Salary cap implications

Because Miller’s franchise tender previously took up $14.129 million in cap space, this deal now saves the Broncos $2.729 million in 2016 cap space.  That should leave them with around $5.35 million, which is right around the amount you’d like for navigating through general regular season operating expenses.  Their 2017 cap space now falls to about $38.8 million, but that number will still put them right in the middle among the rest of the league.  Despite this commitment, the Broncos are still in fine cap shape, as they usually are under John Elway.

Relations to future transactions

$5.355 million is good cap space for 2016 as is, but they could gain another $3.25 million if they cut (or, in which I think needs to be seriously considered, trade) Britton Colquitt.  With the drafting of Riley Dixon, that’s a move we should be prepared for.

Provided that cash flow isn’t an issue due to this monstrous Miller deal, the next extension the Broncos could turn to is Emmanuel Sanders, who has been rumored for those honors for a while. I explored at ways to extend him here; all I’ll add is that now that the Broncos have more cap room they could choose to lower his signing bonus in favor of a 2016 roster bonus that could get more of those cap dollars out of the way now.

Among other 2017 free agents, however, I think the team will have to wait until the 2016 regular season is concluded before they can get a fair judgment.  Sylvester Williams could be allowed to walk if Darius Kilgo and/or Phil Taylor step up.  Kayvon Webster needs to take his play to the next level if he’s going to be able to eventually displace the older Aqib Talib.  Players like Darian Stewart and Vance Walker may be slated to walk if rookie talent like Adam Gotsis, Justin Simmons, or Will Parks emerge.

All in all, another day in the world of John Elway.  He knows how to make us fans sweat, but most of the time he delivers good news in the end.