As first reported by Adam Schefter early this morning, Russell Wilson has agreed to a five year extension with the Broncos appended to his previous contract, keeping him under contract in Denver through the 2028 season, when he will turn 40. Late this morning, Mike Klis provided full details of Wilson’s contract, of which has now been uploaded to Over The Cap, as follows:
Overview
This five year extension adds $245 million in new money due to Wilson, thus at an APY of $49 million, although much of the money will be distributed to existing seasons. (A similar phenomenon exists with Kyler Murray’s recent extension.)
Note the unusual differing prorated bonus numbers through Wilson’s contract. This is the result of three different major bonuses that will be due to Wilson, as follows:
- Signing bonus of $50 million, prorated at $10 million each in 2022-2026.
- Option bonus of $20 million, prorated at $4 million each in 2023-2027.
- Option bonus of $22 million, prorated at $4.4 million each in 2024-2028.
It is unusual to see one option bonus in a contract these days, let alone two. The reason why these option bonuses were implemented was to allow the Broncos to increase the amount of cap space in the earlier seasons, as each prorated bonus can only span a maximum of five seasons. Option bonuses allow teams to manipulate that rule. In 2022 and 2023, Wilson’s cap number drops by $7 million and $5 million. 2024 is also at a reasonable $35.4 million before ballooning above $50 million in the remaining four seasons.
All three of these major bonuses are fully guaranteed, along with a roster bonus due this season for $5 million, along with base salaries in 2022-2024 summed to $27 million, for a total of $124 in fully guaranteed money. Wilson’s 2025 salary of $37 million vests to a full guarantee on the 5th day of the 2024 league year, and 2026 also contains a $2 million injury guarantee, for a grand total of $163 million in maximum guarantees.
The running cash flow in this contract is as follows:
- At signing: $33 million. (Wilson will be paid $57 million this season, as you can see in the sidebar, but $24 million of that was already on the books as old money.)
- Year 1: $73 million
- Year 2: $110 million
- Year 3: $150 million
- Year 4: $195 million
Hypothetically, the Broncos could part ways with Wilson after 2023, before his 2025 guarantee vests, but the dead money would be astronomical at $85 million, and something would have to go similarly astronomically wrong for that to be on the table. That 2025 salary will likely vest, raising the dead money hit even further up to $86.6 million after 2024. However, from 2026-2028 the Broncos have far more flexibility to move on if desired. Therefore, I think Klis is accurate in suggesting that the lion’s share of this contract happens in the first four seasons.
League comparison
Average Per Year (APY)
At a new money APY at $49 million, Wilson is second only to Aaron Rodgers among quarterbacks (and the entire league). Once Murray signed his contract for $46.1 million, I opined that Wilson could not practically be extended for less than $48.2 million APY. My guess at a floor in this regard differed by just $800,000.
Guarantees
Wilson did very well for himself in the full guarantees department. I opined that at a minimum he’d have to beat Murray’s $103 million in this regard, but I guessed that he would only barely do so. This $124 million in full guarantees is head and shoulders above all other contracts except for the perverse anomaly that is Deshaun Watson’s contract. Vested guarantees, on the other hand, was about where I expected in just being a shade above Murray.
Cash flow
Wilson ranks either first or second in the first four years of the contract as a matter of running cash flows. He is only $2 million short of Dak Prescott’s Year 1 total of $75 million, and less than a million under Rodgers in Year 3. In turn, he leads Murray in Years 2 and 4 by differences of $4.735 million and $10.85 million. All of Wilson’s running cash flows exceed what I expected in my opinion.
My opinion
As I think you may have already inferred, this contract beat my expectations of what Wilson could get, especially right now, before he has even taken a snap for the Broncos. The cash flow and full guarantees in particular is very strong, two metrics that are quite important but get hidden too often. At the same time, this contract is not outlandish. The Broncos clearly made an affirmative effort to get this contract done before the regular season. Aggressive, but not reckless, as George Paton would say. Doing so may have been the key to getting a deal done now, as I thought it would have been in Wilson’s best interest to wait until 2023. Nonetheless, I see this contract as fair for both sides.
Getting a deal done now is also advantageous for the Broncos in that they can use seven seasons, instead of six or five, to distribute the cap dollars of Wilson’s contract. This creates flexibility for the Broncos to extend other players (such as Dalton Risner, Dre’Mont Jones, or Bradley Chubb) or to even pursue some external major free agent moves if unexpected holes in the roster arise.
Finally, this extension will put pressure on other quarterbacks in the league who have their own extension windows open or upcoming. All eyes will now be on Lamar Jackson, whose negotiations have been a bit mysterious thus far, and come 2023, Joe Burrow and Justin Herbert will first become eligible for extensions of their own. All three of these players and their applicable agents and other advisors will look at Wilson’s new contract as a landmark.
