Cap Expert Estimates How Much Cash Broncos Will Spend in 2023

With the 2023 NFL league year set to begin on Mach 15, thoughts will turn toward the free agency period. Denver Broncos fans will no doubt wonder how the team will go about improving the roster.

Along with that comes new ownership, with some believing that the Walton/Penner group's deep pockets means the Broncos will go on a spending spree. However, it's important to note that the bulk of money that teams spend on player salaries comes from the league's revenue-sharing program and that teams are required to spend 90% of the cap within a three-to-four-year period.

Therefore, the advantage of an owner with deep pockets in free agency doesn't exist as much as people think. But one way to look at how teams spend money is to consider what they are likely to spend, relative to the cap, in a given year. This can be a better way of examining a team's spending patterns.

Jason Fitzgerald at Over the Cap examined this spending data for the past three seasons, looking at what teams spent in 2021 and 2022 combined, then what they were expected to spend in 2023 before teams started cutting players.

The Broncos actually rank seventh overall in terms of actual cash spending in 2021 and 2022, combined with expected spending in 2023, at more than $642.7 million.

Some of that, of course, reflects what the Broncos have committed to Russell Wilson. For 2022, Denver's cash spending included a $50M signing bonus, a $5M roster bonus, and a $2M base salary to Wilson. The Broncos are already committed to a $20M option bonus and an $8M base salary.

Subtract Wilson's salaries in those two years, and the Broncos are left with $557.7M in cash spending on other players in that three-year time frame. That is still a signifcant amount of money and exceeds the estimate of $554M that Fitzgerald used to determine the requirement to spend 90 percent of the salary cap for that period.

You will note that other teams haven't reached the $554M mark, but that is likely to change. Teams like the Atlanta Falcons and Chicago Bears have been digging out of cap situations and are more likely to spend this season to meet the threshold. The Dallas Cowboys, meanwhile, have to extend or re-sign some of their own players, plus they may need to restructure/extend Dak Prescott's contract.

Fitzgerald also examined historical trends for teams in how much cash they spend relative to the salary cap to include projected budgets for 2023. He used those trends to determine how much teams could be expected to spend in free agency in 2023.

The Broncos have historically spent 101.7% of the cap, per Fitzgerald's estimates. For those confused by this, keep in mind that cash spending includes signing bonuses, which are structured over the length of a contract for cap purposes.

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Also, Fitzgerald notes that the Broncos could change their approach given that they have new ownership. However, that approach would be more about how aggressive they are in spending the money allocated for players and, if they are more aggressive, how they would structure contracts to become cap compliant.

Keep in mind that a larger signing bonus allows a team to pay a player more money in the first year but means more dead money charges against the cap if you have to release the player.

The Broncos have gone with smaller signing bonuses for the most part, but that has less to do with not having the cash and more to do with wanting to minimize dead money down the road. The Broncos usually put more of the first-year money into base salaries or roster bonuses.

Another thing to keep in mind is that while Fitzgerald's estimates show the Broncos have just $1.7M to spend based on their past patterns, it's not just their approach to contracts that could change things. Fitzgerald's estimates include all Broncos who are under contract for 2023, when at least a couple of players under contract currently could either be cut or have their deals renegotiated.

Say the Broncos cut Graham Glasgow, then sign Mike McGlinchey in free agency. Glasgow is due $10.4M in 2023, but if he's cut and McGlinchey is signed, McGlinchey is likely to get more than $10.4M in 2023, even as his contract is structured to have a cap hit lower than the $14M cap hit Glasgow currently has.

Also, the one thing that might cause the Broncos to spend less cash in a given season, even with new ownership, would be if they draft a quarterback who becomes their new starter. While Denver would enjoy an inexpensive contract for several years, any drafted QB who plays at a high level will eventually garner a big contract.

Such a situation would mean that the Broncos might not spend as much money in a given year because they want to save some cash to eventually pay that QB.

What it Means

While the Broncos will get the same amount of cash from the revenue sharing to spend on players as other teams, how they spend it could differ from in the past.

We'll find out in a couple of weeks whether the Broncos stick to their usual practice with contracts, or if they decide to change their approach, as we come closer to the 2023 league year.

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