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Updating Broncos' Salary Cap Situation on Doorstep of 2020 Season

How are the Broncos sitting with regard to cap space as the 2020 season looms? Here's a diagnostic with seven points about the present and future to know.

The Denver Broncos, like every other NFL team, will have to make a lot of decisions next year, because league revenues will drop, thanks to the pandemic restricting fan attendance, and that means the salary cap will go down.

Our Erick Trickel has already discussed some of the players whom the Broncos might have to part ways with, or approach for a restructure. What I wanted to add are a few points about where the Broncos actually stand with the salary cap — and at least a couple of them pertain to specific players.

Let's go over the highlights about what we really know about the Broncos' cap situation now, in the future, and what could change in the coming months.

1. The Broncos' actual cap space for 2020 won't be known until the final roster is set.

As things currently stand, the Broncos had an estimated $29.5 million in cap space before the signing of right tackle Demar Dotson. He's set to count for $1.5M if he makes the 53-man roster, so the space at this time would come to $28.675M.

However, that's based on the top-51 cutoff that remains in effect until final rosters are set. Once the Broncos determine their 53-man roster and 16-member practice squad, all players will count toward the cap. That will include any player who is placed on injured reserve.

Barring any unexpected cuts, such as for a veteran player with a high cap number, the Broncos figure to be around $25M in cap space. But the final figure won't be known until the roster is finalized.

2. Cap carryover for 2021 depends on what happens during the season.

During the course of the season, the Broncos cap space could change depending on any moves they make.

A player who is traded away no longer counts toward the cap, so it gives the Broncos additional space based on the remaining base salary a player had. And a player acquired in the trade decrease space because the Broncos take on the remaining base salary for that player.

With any trade, the Broncos eat remaining signing bonus cap hits for those they trade away (assuming there is signing bonuses they paid out) but don't take on cap hits for signing bonuses for players they acquire (because the team trading the player away always takes that hit).

So don't get tuned up on the carryover the Broncos have at this time. It remains to be seen what moves the team makes during the course of the 2020 season, if any.

3. The NFL base cap for 2021 isn't yet known, but the Broncos' current cap commitments are known.

It's expected the cap will drop next season, but as Trickel pointed out, the lowest it can go, based on the NFLPA and NFL negotiations, is $175M. Again, the actual space the Broncos will have depends on where the base cap is set and what carryover they have from 2020.

But we do know that the Broncos will have $166.4M in cap commitments next year. That's based on the top-51 cutoff and the fact that the Broncos have 52 players under contract for 2021.

It's likely the Broncos could cut some players to create cap room or if they need the cash to pay other players. Trickel already mentioned such players, so again, I'll refer to you to his recent article.

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4. Ja'Wuan James is already included in the 2021 commitments.

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The Broncos got $13M in cap relief when James opted out of the 2020 season because of his concerns about COVID-19. That cap hit now moves to 2021.

The cap commitments I mentioned already include James, so you don't have to add it to them. Do keep in mind, though, that his $10M base salary is fully guaranteed, so there would be no cash savings for the Broncos unless they trade him.

James will get a $150,000 salary advance this season, but it comes out of that $10M base salary. It's not clear if that advance will apply to the cap this season or next season, but it's a small amount, so the cap impact, either way, is negligible.

5. Justin Simmons' 2021 franchise tag will be based on his 2020 tag number.

The Broncos won't be able to sign Simmons to an extension until after they have finished their 2020 season. If they can't get a new deal done, they could tag him for the second straight season.

However, even with the cap expected to drop, Simmons' tag numbers will be based on the 2020 tag, meaning the tag will still go up. The tag will likely be between $13.5M and $14M for next season.

This means, if the Broncos use the tag number to negotiate a new deal, Simmons will be in a position to ask for more money. Therefore, keep an eye on how he plays this season because a strong 2020 campaign means he'll be in position to push for $15M APY in a new deal.

6. Other tag candidates will be based on the 2021 cap.

If the Broncos do get Simmons extended after the season and not have to use the tag, they could consider tagging other players.

Kicker Brandon McManus may be next on the list for a possible tag because the tag number for kickers is usually low. If left tackle Garett Bolles plays well in 2020, the Broncos could tag him and see if he can keep that play up in 2021.

But if the Broncos use the tag, those tags will be based, in part, on the 2021 salary cap. There are other factors that go into the formula, but if the cap drops, the tag numbers likely drop, too.

Of course, it remains to be seen if the Broncos tag anybody, even if they get Simmons signed to a new deal after the season. With the cap going down, they could opt to not tag any player to save cap and cash commitments.

7. The same applies to restricted free agent tenders.

A lower cap likely means lower tender amounts for restricted free agents. That would apply to at least two Broncos who were significant contributors in 2019.

Running back Phillip Lindsay and linebacker Alexander Johnson will be restricted free agents in 2021. The second-round RFA tender was $3.25M for 2020, but a lower cap in 2021 could mean those tenders are lower.

In other words, players such as Lindsay and Johnson might be looking at salaries for less than $3M. On one hand, it's less cap and cash commitments for the Broncos. On the other hand, it means less money that Lindsay and Johnson could potentially earn as key contributors.

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