Do Broncos Need to Restructure Some Contracts for Cap Relief?

The Denver Broncos have just $8.8 million in salary-cap space at this time and are projected to be over the cap next season. It will be a while before the Broncos have to make decisions about the 2024 cap, but some might wonder whether the team should restructure some contracts.

Jason Fitzgerald at Over the Cap examined the issue of restructuring contracts and whether or not it works to make a team better. The data he examined showed that teams could improve if they restructure contracts to sign additional players, but if they got too aggressive, it didn't make much of a difference.

You can read Fitzgerald's article to get the breakdown of how teams did and to learn which teams have made the playoffs on a regular basis and those that haven't. But he did conclude that there can be a benefit to restructures.

But as Fitzgerald notes, while you can take some risks, you want to do it within reason. He suggested using somewhere between 5%-to-8% of the year's salary-cap limit for the purpose of restructuring contracts.

We have seen the Broncos utilize restructured contracts, in which they converted base salary into a signing bonuses. Denver did this with Von Miller after the first two years of his contract, then later did it with Joe Flacco to get some cap relief going into the 2019 season.

More recently, the Broncos restructured the contracts of Courtland Sutton and Tim Patrick last season. As I noted at the time, the contracts were structured with roster bonuses for 2022, which would allow the Broncos to restructure them into signing bonuses and have more cap flexibility.

I had suggested, prior to the 2023 league year, that the Broncos could restructure Justin Simmons' contract and add void years, given that it was likely he would be retained beyond the 2023 season. That would have allowed the Broncos more flexibility to keep some players. However, Denver opted not to restructure deals and, instead, it cut several players to gain cap space.

There have been instances in which the Broncos got certain players to reduce their base salaries and take incentives, a practice some call a "restructure." However, that's really a renegotiation because, with an actual restructure, the player gets all the money due, just in a different form of payment. If he takes less money than he's supposed to get in a deal he signed, that's a renegotiated contract.

You can also see the chart that Fitzgerald put together with the average number of restructures and the average number of wins in the past three seasons. Notice that the Broncos are among the teams that utilized restructures the least.

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Should Denver Restructure Some Deals in 2024?

The answer to that question depends on how the 2023 season unfolds. However, it's worth noting that several Broncos will enter the final years of their contracts in 2024, meaning they might be up for extensions to lower their cap numbers instead.

There are a couple of players whom the Broncos could restructure, but those players need to demonstrate this season that they're worth keeping beyond 2024. If they don't, it doesn't make sense to restructure deals.

At any rate, Fitzgerald's exercise shows that the process of restructuring contracts is sometimes useful, but you don't want to overdo it. Being smart with your resources and cap space is important, even when you're in pursuit of the playoffs or a Super Bowl.

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