Denver Broncos: Predicting a Possible Justin Simmons Contract

Predicting a possible contract for Justin Simmons and the Denver Broncos.

Justin Simmons, the All-Pro safety for the Denver Broncos, will be a part of the team for the 2020 season.  While Simmons has been very forthcoming about his intentions to not hold out, even if that meant playing on the franchise tag this upcoming season, that was made official when Simmons signed his tender this past weekend.

Now, the attention turns to the looming deadline Wednesday with Simmons camp and the Broncos still working diligently to getting a long-term deal done.

The NFL contract market was set on fire last week when Patrick Mahomes unprecedented 10-year, $503 million contract extension was announced.  This contract had a number of unique aspects to it such as rolling guaranteed roster bonuses in lieu of a large up-front signing bonus to act as a ‘guarantee mechanism’.  While these are not uncommon in NFL contracts, to have them throughout the length of the contract, and for 10 years nonetheless is unheard of.

This is likely a product of COVID-19, being that teams are likely looking at their actual cashflows under a far more granular microscope and not wanting to dish out large sums of cash with the macroeconomics in place.  With that said, how might the Mahomes deal impact a potential Justin Simmons long-term contract may look like for the Broncos?

There are a few things to consider when looking into a potential deal for Justin Simmons:

1.  Justin Simmons is coming off of his first All-Pro designation and is widely regarded as one of the top safeties in the NFL.  Because of that, Simmons camp is going to make sure he becomes the highest-paid safety in the league—even if the Broncos’ initial offer wouldn’t reflect that.  The first thing we need to look at is the current safety market to understand the rough parameters of what the deal is going to look like.
2. The Broncos cap situation, not only this year but for years to come—how much do the Broncos want to commit against the cap year over year for a deal like this?
3. How is guaranteed money going to work?  Do they use a more traditional model of a larger up-front signing bonus and get most of the guaranteed money out of the way in the first few years, or do they use the Mahomes deal as a way to re-look and use these ‘guarantee mechanisms’ in the form of advanced commitment roster bonuses to lock-in?

Basic contract parameters

To understand what a future deal is going to look like, we need to look at the current safety market.  When looking at these deals, it’s important to look at two key metrics:

1. Average value per year: Currently the top-5 safeties in the league in money, Eddie Jackson, Kevin Byard, Tyrann Mathieu, Landon Collins, and Earl Thomas, average between $13.75 -14.6 million.  Simmons is going to be the top-paid safety in the league, so it’s easy to say that the average annual value will come in slightly ahead of that.  A reasonable estimate would be $15-15.2 million per year.
2. Guaranteed money:  This is where it gets a bit trickier to predict because you need to factor in a few other things such as age and deal length.  It’s easy to give a great safety who may be a bit older a deal that averages $14 million per year but is for only 2 years with only the first year guaranteed.  The average guaranteed money for the top-5 current safeties ranges between $26.8 million and $44.5 million, and that is only looking at total guarantees for injury.  Fully guaranteed at signing is a bit lower, ranging between $19.63 million and $32 million.

Considering that Justin Simmons is 27 years old, we would want to throw out the Earl Thomas number and look at the other four on the list as he’s roughly the same age.  The best two comparisons would be Eddie Jackson and Landon Collins who received total guarantees of $33 million and $44.5 million respectively.  Again, Simmons will likely want to come in a bit higher, so a total guarantee of around $46-47 million would be a safe bet.

Estimated Parameters:

• 5-years
• $75 million total
• $15 million average annual value
• $47 million Total guarantees
• $36 million Fully guaranteed at signing

Broncos cap situation

From a cap perspective, the Broncos are in really good shape this year, with still around $17 million in cap space available (although they still do need to sign the draft class, so realistically a bit less), but that space is with an $11.4 million cap hit for Simmons already on the tag figure.

There are generally two reasons to give a player a large signing bonus—first money upfront is always better than money later, and second is to lower the year 1 cap hit.  The larger signing bonus upfront also means that cap hits in the outer years of the deal will be higher as the figure is accounted for partially in later years.

The Broncos don’t necessarily need to lower the year one cap hit and can actually afford to higher if needed to keep the cap hits in the outer years lower when other young players need new deals.  With this said, a reasonable signing bonus would be in the $10 million range, much like Mahomes deal, in order to give Justin some up-front money without killing the future cap hits.

A very reasonable estimation on a cash flow/cap hits on a year to year basis would be as follows:

As detailed in the table, the Broncos would take the largest cap hit in year two, prior to players like Courtland Sutton, Drew Lock, and Bradley Chubb needing their own paydays.  The last two years of the contract would likely be structured to be non-guaranteed in the event that his play drops off, or they need to execute a restructure to give them cap flexibility.

Guarantee structure

This will be the trickiest part of the contract to predict but based on the Mahomes deal, and what’s already outlined, we can make a fair guess.  A few factors that go into guaranteed money are signing bonus, guaranteed salary, and roster bonuses and the dates in which they are picked up (this was the guarantee mechanism in Mahomes deal that was so key).

When looking at Simmons deal, we’ve already stated that the guarantees will likely be around $46 million guaranteed, and $36 million fully guaranteed at signing.  The best guess is to how that is structured would be to assume a combination of the traditional up-front signing bonus/guaranteed base salaries, and the guarantee mechanism for the final year in the form of a roster bonus.

Below is the table from the previous slide, expanded upon to show the best guess on the structure of the guarantees:

To break this down a bit more, Simmons would receive full guarantees of $36 million paid within the first two years in the form of the traditional signing bonus plus guaranteed salary.  The last $10 million would be in the form of a roster bonus that would need to be picked up a year prior.

Essentially, after the 2020 season, the Broncos would need to decide if they want to pick up the option for 2022.  It’s a near guarantee that they would under this structure, considering they would owe him the $15 million guaranteed base salary in 2021.

In the instance that Simmons would suffer a career-ending injury, they could decline the option and cut Simmons before the 2021 season if they believe it is better to pay $15 million for someone not on the team then $25 million over two years for someone who isn’t worth it.

Again, there is a very minimal chance under this structure the Broncos wouldn’t pick this up, bringing the total guaranteed value to $47 million when adding in the 2022 $1 million salary.

Full contract prediction

To wrap up the previous three sides into a single deal prediction, a good guess for a Justin Simmons deals looks like this:

• 5 years, $75 million
• $36 million guaranteed at signing
• $47 million in total guarantees
• $10 million signing bonus
• Cap hits of:
  • 2020: $13 million
  • 2021: $17 million
  • 2022: $13 million
  • 2023: $15.5 million
  • 2024: $16.5 million
• Cash flows of:
  • 2020: $21 million
  • 2021: $15 million
  • 2022: $11 million
  • 2023: $13.5 million
  • 2024: $14.5 million
  • Guarantee structure of:
    • 2020: Signing bonus + salary
    • 2021: Guaranteed salary
    • 2022: Roster bonus to be picked up no later than 3 days after the start of the 2021 League Year
    • 2023: No guaranteed money
    • 2024: No guaranteed money

    A long-term deal prior to the Wednesday deadline appears to be the preference of both the Broncos star safety and the Broncos themselves.  John Elway has never let a player play on the tag, and the deal proposed above would be both fair to Simmons and the team.

    Justin Simmons has undoubtedly earned the right to become the highest-paid safety in the game with not only his stellar play but also his contributions to the community off the field.  He’s a model Bronco who should be cashing his golden ticket before the deadline on July 15th.