How a Recent Rule Change to Comp Pick Formula Could Affect Broncos' Decisions on Players With Team Options

A recent loophole was closed that incentivized teams to decline team options on players' contracts. How could that affect the Broncos in 2020?

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A tactic the Denver Broncos have utilized in the past with regard to player contracts might not be advantageous anymore given a reported change to the NFL compensatory pick system.

Brad Spielberger of Over the Cap shared news last week that players who have team options in their contracts, and have them declined, will no longer count toward the compensatory pick formula. In other words, they'll be treated the same as players cut or restricted free agents who aren't tendered.

To be clear, this rule won't apply to first-round picks who don't get fifth-year options picked up, because those are league-mandated contracts, rather than veteran contracts in which the team negotiates the team option into the contract.

Nick Korte at OTC has more details about the reported change, but it's not clear when this rule change took effect or whether or not it applies to contracts that were already negotiated prior to the change.

The Broncos weren't the only team to use this method to take advantage of the compensatory pick system. The Patriots, Ravens, Eagles and 49ers all utilized this trick, too. The Rams, Jaguars and Panthers have a few players with team options in their respective deals and a couple of other teams have at least one such player.

The most notable example of how that trick worked for the Broncos was with former OT Russell Okung. If you will recall, Okung signed with the Broncos in 2016, agreeing to what was essentially a 'contract within a contract', in which he got a one-year deal, with a team option that, if exercised, kept him around for two more years with fully guaranteed money. Okung negotiated the deal without an agent and the terms amounted to him betting on himself.

The Broncos declined the option after 2016, even after Okung played well. I suspect the main reason was that the Broncos changed offensive line coaches and Okung didn't fit what the new coach, Jeff Davidson, wanted from his offensive tackles. Regardless, Okung signed a big contract with the L.A. Chargers in 2017 and the Broncos got a third-round compensatory pick in 2018 as a result. 

With the change Spielberger reported, that means that teams can no longer decline a team option for a veteran player in hopes of getting additional compensatory picks. In the Broncos' case, that could apply to four players: LB Von Miller, OG Ronald Leary, LB Todd Davis and K Brandon McManus, all of whom have team options for 2020.

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I haven't mentioned Miller, Davis or McManus previously because I've never believed the Broncos would decline their options — though you certainly can't rule it out if the Broncos are confident they can find an upgrade elsewhere. But before I get to those players, let's consider whether or not the rule change will actually affect the Broncos' decisions.

Okung isn't the only player to have a team option declined by the Broncos. That also happened to LB Brandon Marshall last year. Meanwhile, the Broncos exercised options for WR Emmanuel Sanders and DE Derek Wolfe. It could have been easy for the Broncos to just decline those options in hopes of getting comp picks, but the team instead kept both.

The main impetus for moving on from a player under contract, whether as an outright cut or declining an option, is you don't believe the player is worth the salary or cap hit he will have, or you don't believe he fits your team's schemes any longer. The team-option trick is about taking advantage of a loophole, but it doesn't mean you're guaranteed to decline the option to exploit the loophole.

With Okung, the reason again seems to be that he didn't fit the scheme Davidson wanted to run. With Marshall, his play had declined in 2018 and he didn't fit what Vic Fangio wanted from his linebackers. Wolfe and Sanders both had injuries throughout their careers, but they played well in 2018 to the point the Broncos wanted to keep both.

And while Okung netted the Broncos a third-round comp pick, Marshall won't net any such pick. The Raiders signed him for the veteran minimum in a one-year deal but added incentives. The Broncos could only get a comp pick if he earned those incentives. That never came to pass because the Raiders cut Marshall before the season started.

Therefore, I don't expect the lack of potential comp picks will impact the Broncos' decisions that much. Let's look at the four players who have team options and what the Broncos are more likely thinking.

Von Miller: Let's not kid ourselves here, there was never a chance that the Broncos would decline his team option. They will be exercising it and that's the end of that discussion.

Ronald Leary: We know about Leary's injury history while with the Broncos and that, last year, he started off slowly, but showed improvement during the year, before a concussion sidelined him. With Leary, it really boils down to whether or not the Broncos are comfortable keeping him at a cap charge of $9.375M. Also, the Broncos would guarantee $1.5M of his salary if they exercise the option. I still believe it's more likely the team will decline the option because I don't think Leary's level of play warrants the $9.375M cap charge. If Leary becomes a free agent, I'm not convinced he would get a deal high enough to count toward the comp pick formula anyway, if he would factor in.

Todd Davis: This is a more interesting case. Davis is coming off a fine season and, were his option declined, it wouldn't surprise me to see him land with another team sooner than later. Thus, he might have factored into the comp pick formula and loophole decision-making. But since that loophole has been closed, the Broncos have to ask themselves how certain they are that they can land a replacement in free agency or the draft. Even if they sign another free agent, Davis still wouldn't carry that high of a cap charge ($6M is manageable) and, after 2020, would see his deal expire when a free agent would start carrying a larger cap charge. I do believe the biggest factor in a decision about Davis will be how much the Broncos want to keep him and their confidence in landing a free agent, but if there's no comp pick incentive for the Broncos in declining his team option, that might make them less inclined to do so.

Brandon McManus: He will carry a $4.25M cap charge, which is high for a kicker, but he played well in 2019 and I'm positive the Broncos will exercise his option.

Bottom Line

While there may not be comp picks available for players who become free agents after their team declined their option, I'm not convinced it's going to change a team's decision-making process all that much. It may happen with a couple of players around the league, but not the majority.

Instead, decisions about team options will be formulated the same as they are when cutting a player; is the player worth the cap charge, does the player fit our scheme and does the team expect it can easily find an upgrade? 

If teams answer 'no' to the first two questions or 'yes' to the third, chances are they'll move on. If teams answer 'yes' to the first two and 'no' to the third, they'll keep him.

But know this — the days of teams netting comp picks from declined team options appear to be over. Instead, comp picks will be awarded the way they were initially designed, and that's when a team loses a player to another team because his deal expired and the player chose to move on.

Follow Bob on Twitter @BobMorrisSports and @MileHighHuddle.