Broncos Offseason Primer: Cap Space Bottom Line & Expiring Contracts

The Denver Broncos will have more cap space in 2025, but they have a lot of expiring contracts.

Dec 2, 2024; Denver, Colorado, USA; Denver Broncos linebacker Cody Barton (55) celebrates his interception with linebacker Justin Strnad (40) and defensive tackle Jordan Jackson (94) and safety Devon Key (26) in the fourth quarter against the Cleveland Browns at Empower Field at Mile High. / Isaiah J. Downing-Imagn Images

In reviewing the Denver Broncos' offseason needs, nine different positions must be addressed. The good news is the Broncos will be in a better cap position than they were this past offseason.

However, before we start talking about available cap space, we have a few points to go over that will tell the tale of how much cap space the Broncos will have available from a practical standpoint. On one hand, the Broncos are projected to have about $63.4 million in cap space. On the other hand, that comes with a couple of caveats.

Firstly, that number is based on a projected base salary cap of $272.5M. Secondly, that number is based on the Broncos having 36 players under contract for the 2025 season.

Once the offseason begins, the top 51 cutoff rule takes effect. That means only the top 51 salary cap hits count toward the cap, which allows teams to reach the maximum of 90 players under contract for the offseason. Once the 2025 regular season begins, all players on the roster count toward the cap.

Thus, the Broncos will need to get 15 more players under contract before the top 51 cutoff kicks in. That, in turn, means the available cap space will go down.

How will the Broncos get to that point? Let's examine the available options.

Futures Contracts

Denver Broncos running back Blake Watson (43) celebrates after scoring a touchdown against the Indianapolis Colts during the second half of a preseason game Sunday, Aug. 11, 2024, at Lucas Oil Stadium in Indianapolis. The Broncos defeated the Colts 34-30. / Christine Tannous/IndyStar / USA TODAY NETWORK

The first step the Broncos will take is signing a number of players to futures contracts. A player signs a futures contract after the team's season ends, but it doesn't take effect until the next league year begins.

A futures contract is usually for the minimum amount a player may receive based on his accrued seasons and the money isn't guaranteed. In most cases, these players have spent time on the team's practice squad. In a few cases, they're players who are currently unrestricted free agents who the team views as worthy of an opportunity for next season.

The Broncos have 16 players on the practice squad and are most likely to sign 10 to 11 players to futures contracts. Such players are most likely to be those with no more than two accrued seasons but might be one with three accrued seasons.

Players on the practice squad with no more than two accrued seasons include linebacker Andrew Farmer, offensive guard Nick Gargiulo, defensive back Tanner McCalister, nose tackle Jordan Miller, cornerback Quinton Newsome, wide receiver A.T. Perry, safety Keidron Smith, defensive back Reese Taylor, running back Blake Watson, and tight end Thomas Yassmin. The Broncos have two players on the practice squad with three accrued seasons: wide receiver Michael Bandy and defensive tackle Matt Henningsen.

Any player who has seen time on the field for the Broncos in the past two seasons will likely get a futures contract. Depending on how many are signed, they could account for anywhere from $6M to $8M in total cap commitments.

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Exclusive Rights Free Agents

Dec 2, 2024; Denver, Colorado, USA; Denver Broncos cornerback Ja'Quan McMillian (29) celebrates as he scores a touchdown on an interception in the fourth quarter against the Cleveland Browns at Empower Field at Mile High. / Isaiah J. Downing-Imagn Images

This is another way for the Broncos to get to 51 players. Exclusive rights free agents are players who have no more than two accrued seasons who finish the regular season on the active roster. In most cases, they were undrafted players.

ERFA tenders are one-year, low-cost contracts with no guaranteed money. They're a no-risk means of retaining a player. The Broncos' current ERFAs are cornerback Ja'Quan McMillian, tight end Lucas Krull, defensive lineman Jordan Jackson, safety Devon Key, and edge rusher Dondrea Tillman.

It would be surprising if the Broncos chose not to retain the five players, given they have all contributed to some degree, particularly McMillian and Key. If all five are retained, they'll combine for a cap hit of about $4.5M.

Re-Signing Their Own

Dec 2, 2024; Denver, Colorado, USA; Denver Broncos offensive tackle Garett Bolles (72) hugs quarterback Bo Nix (10) following the win against the Cleveland Browns at Empower Field at Mile High. / Ron Chenoy-Imagn Images

The other option the Broncos can use to get to 51 players is to re-sign players with expiring contracts. The Broncos have 14 players set to become unrestricted free agents after the 2024 season.

Teams are free to negotiate with their own players with expiring deals as much as they want. The question, of course, is whether they'll be extended.

The more notable players to watch when it comes to possible extensions are offensive tackle Garett Bolles, linebackers Justin Strnad and Cody Barton, quarterbacks Jarrett Stidham and Zack Wilson, cornerback Tremon Smith, and punter Riley Dixon.

There's also long-snapper Mitchell Fraboni, who is a restricted free agent. He's not worth tendering because of the cost to do so, but he could be retained on a short-term contract.

Any free agents the Broncos re-sign before free agency gets underway would count against the cap, though their cap hits will depend on their contracts.

Bottom Line

While the Broncos will be in a better cap position than they were last year, the fact is they still have factors that will cut into the space available.

None of that means, though, that the Broncos are going to be in a bad cap situation. It simply means that the Broncos might not necessarily be big spenders in free agency, particularly if they decide to commit money to their own players first.

The other part of the equation is the available players in free agency. We'll look at that in our next installment.

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