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Examining A Possible Contract Extension For Justin Simmons

The Broncos and Justin Simmons failed to come to agreement on a multiyear extension last offseason after Denver tendered $11.411 million for his services in 2020 on the franchise tag. What can be done to bridge the gap in 2021?

A second franchise tag should be off the table given the crystal clear facts on the ground of the market

Unlike with Garett Bolles, with regard to the franchise tag Simmons will not be subject to the bad luck that will be unleashed via a pandemic-induced plummet in the 2021 salary cap. Art. 10, §2(a)(i) of the CBA practically mandates that a player that is franchise tagged for the second time receive a 20% raise upon his previous tender, regardless of the state of the salary cap. Therefore, instead of of a projected fall in salary via the franchise tender system, Simmons would be due $13,729,200 on a second franchise tag.

However, using that number as a floor for extension negotiations is invalid. The safety market at the top tier has solidified considerably, where the consistency of the base metrics are stark. Everyone at the top tier has earned the following:

  • A contract length of four or five years
  • An APY in the $14-14.75 million range
  • Full guarantees ranging from $19.625 million to $26.8 million
  • Top cash flows of $20.7 million by one year, $32 million by two years, and $45 million by three years

The only thing the Broncos need to hold firm upon, one that is not implicated in the important metrics, is that Simmons’s 2021 cap number needs to be low. That’s necessary due to the expected plummet in the 2021 salary cap, and in order for the Broncos to fit in other transactions–particularly a potential franchise tag to be tendered to Bolles.

Otherwise, of the three key metrics–APY, full guarantees, cash flow–Simmons should become the new clubhouse leader in one of those metrics, the Broncos should gain a concession on another, and the two sides should equalize on the third. How that should be decided is up for negotiation, as the sample contracts below will show.

Contract A: the APY buster

YearBase SalaryProrated BonusCap NumberDead MoneyCap Savings

italics – fully guaranteed salary

This is a five year, $77.5 million contract, an APY that comes in at a cool $15.5 million. The full guarantees are also comparable at $26 million, via a $15 million signing bonus and guaranteed 2021 and 2022 base salaries. However, Simmons has to be patient to earn all the money here: the running cash flows are low, at $16 million, $26 million, and $42 million over the first three seasons. If Simmons wants the cash flow to be more favorable by moving payments up, in turn he’ll need to make part or all of his 2022 base salary guarantees to be injury only with a vesting to full at a typical date. A true five year contract is also appropriate here in order to maximize that APY.

Contract B: a comprehensive guarantee commitment

YearBase SalaryProrated BonusCap NumberDead MoneyCap Savings

The total value of this contract is $57 million over four years, so the concession that Simmons is giving up in here is in APY, at $14.25 million. But check out what he’s getting guaranteed: $32 million, most notably via $20 million at signing and a $11 million 2022 base salary. The cash flow via those guarantees are also competitive at $21 million, $32 million, and $44.5 million. If Simmons wants insurance on as many dollars as possible, a route like this is the way to go. A signing bonus this high will make prudent a void year on 2025 unless either side wants to add a true fifth year.

Contract C: secure the cash flow bag

YearBase SalarySigning BonusCap NumberDead MoneyCap Savings

In this contract, $59.5 million over four years, Simmons is maximizing the amount of money he’s getting on every season. After one year he gets $24 million, almost all of that at signing. By two years, he’d get $34 million, by three $48 million, and by the end his APY of $14.875 million is still leading the league. But the concession here is that his only guarantees are in 2021–anything from 2022 onward would be on an injury only basis, with appropriate vesting to full as needed. Like with Contract B, the high signing bonus should necessitate a void fifth year if the length is kept at four years.

There’s no reason to dither on negotiations.

In my opinion, the Broncos and Simmons should start working on an extension now if they are serious about a future together, with the goal of agreeing to a deal well before the start of free agency. Otherwise, if the Broncos do not value Simmons at the top tier of safeties, then they should not waste time with a second franchise tag, and should instead let him walk to free agency, and work to gain a 3rd or 4th round compensatory pick for him in 2022.