Understanding Russell Wilson Benching, Broncos’ Contract Ultimatum

The Denver Broncos’ benching and certain upcoming release of Russell Wilson proves a couple of the themes discussed so often in this space.

The business of the NFL is a cold and heartless one, even for players who have been elite faces of their franchises. Just in the past couple of years, superstars inextricably linked to their teams for long tenures—Tom Brady, Aaron Rodgers, Matt Ryan, Philip Rivers, to name a few—had those tenures end with some level of enmity. Now Wilson, less than two years since being traded away from the Seattle Seahawks to the Broncos, will join the list for the second time.

The Broncos went all in on Wilson—on both trade compensation and contract compensation—before now being all out. This illustrates another theme of this space: NFL contracts, even for elite quarterbacks, are not what they appear to be. More on that below.

One day we may find out what really happened with Denver and Wilson in early 2022. The team had hired Aaron Rodgers’s confidant Nathaniel Hackett as Rodgers continued to grumble about Packers management. Yet all of a sudden the Packers and Rodgers re-upped on a huge contract (one that caused $40 million of dead money to the Packers in ’23), and the Broncos traded for Wilson, doubling down with a massive contract months later. Must be an interesting story there.

As for that contract …

Bad contract for Broncos, but not Watsonian

With new ownership worth billions wanting to make a statement, we expected a strong contract for Wilson. And it was in terms of overall compensation. But as noted here at the time, the Broncos “won” on structure. Only months removed from Deshaun Watson receiving a fully guaranteed contract from the Cleveland Browns, Wilson—who had extreme leverage—could not take advantage of that precedent. New ownership clearly did not want to upset their NFL brethren as Browns owner Jimmy Haslam had done with Watson. In interviewing Wilson’s agent, Mark Rodgers, on my podcast last year, I was struck by his description of the Broncos’ negotiators constantly referring to the Watson deal as an aberration, language used in lockstep with so many other NFL teams. Did NFL owners collude to make sure Watson’s deal was an aberration? Of course they did. Can the NFLPA prove collusion? If it could, it already would have.

Thus, Wilson’s contract reverted to the traditional structure, with only three years of the seven total contract years guaranteed. There are injury guarantees in the fourth year, but injury guarantees—only activating if an injury from a previous year prevents the player from playing—have little value (even ACL or Achilles injuries resolve in a year). But Wilson’s contract had a valuable kicker; the injury guarantee would convert to a full guarantee, not before the fourth year (2025), but before the third year (’24). That provision has value, and it became the reason Wilson is now benched.

The Broncos’ “ask”

It’s now been widely reported that Broncos management approached Wilson during the team’s bye week at the end of October with an ultimatum: Push back the March 2024 trigger date for his ’25 injury guarantee to a year later … or else. The “or else” was a demotion from starting quarterback. Wilson, after involving the NFLPA and outside counsel (including longtime NFL antagonist Jeffrey Kessler), refused.

A couple of thoughts here. First, having negotiated NFL contracts for decades, I am not as aghast as some about this. I often had to go to players and agents with uncomfortable requests, the most frequent one being a request/demand for a pay cut. Contract negotiations do not end when deals are signed; there is continuing management of these contracts and, in cases like these, some tense and adverse discussions.

The Broncos obviously regret giving Wilson that 2024 trigger for a ’25 guarantee and used the valuable chip of playing time to try to leverage an adjustment. Just as Wilson involved the NFLPA, the Broncos checked with NFL lawyers through doing this. The damages Wilson would suffer are not clear: He is paid in full this year, and will be paid in full next year. Coaches demote starters every day, and “asks” that are adverse to players happen in negotiations regularly.

The curious thing about this ask is that although it was rejected, Wilson kept his starting job, with some success, for seven more weeks. For whatever reason, whether cowed by Kessler or otherwise, the Broncos’ “or else” didn’t materialize for two months.

This poses a credibility problem for the Broncos. They threatened that if Wilson didn’t do X, then they would do Y. But he didn’t do X, and they didn’t do Y, at least not until weeks later. Now players and agents have seen publicly that (1) the Broncos play hardball, or at least try to, and (2) don’t follow through on their threats.

I knew, when asking players for pay cuts, that I had to be ready and willing to cut the player if he refused. If he refused and I said, “O.K., my bad,” I—and the Packers—would lose all credibility with agents and players.

Negotiating for a team can be a tough business; it is not for the faint of heart. Just as teams keep dossiers on agents and how they negotiate and treat people, players and agents do the same with team negotiators. The Broncos have now given agents a new résumé item on them.

Cash and cap impact

The Wilson contract is a good lesson in the different timing impacts of cash versus cap. As I always say, cash is, well, cash: hard, cold money. Cap is not cash; it is accounting, and the cap accounting bill always comes due.

On the cash side, Wilson is owed $39 million in 2024, a true guarantee (not an injury guarantee) with offset language, meaning the Broncos’ financial obligation will be reduced if another team takes on—through trade or signing after release—some of that number. For example, were Wilson to make $14 million next year, the Broncos would be responsible for the other $25 million owed (to a player they no longer want). The Broncos, however, will save at least $100 million in future liability to Wilson by their steadfastness regarding the Deshaun Watson contract. Paying off a year guaranteed is worlds better for them than paying off three-plus years of future guarantees.

On the cap side, there are no good outcomes. A trade or release before June has the same impact: an unparalleled dead-cap charge of more than $80 million, the accumulation of unamortized proration from the staggering contract that Wilson signed 18 months ago. The Broncos can, though, push back much of their cap pain into 2025 by designating Wilson for release after June 1, splitting the cap impact into roughly $35.4 million in dead money in ’24 and an eye-popping $49.6 million in dead money in ’25. He would be the highest cap charge on the Broncos’ roster both in ’24 and ’25, when he will be over a year removed from having any connection to the team.

The cap defers pain, but does not forgive it.

As we now know, Wilson will not make it to March as a member of the Broncos. They are not only stuck with the detritus of the Wilson contract, but also they were clumsy in trying to execute a change to the deal with an empty ultimatum.

As the Billy Joel song says, the present Russell Wilson–Broncos relationship is now “the cold remains of a passionate start.”