It’s time for everybody’s least favorite part of the NFL calendar: Summer school.
This lesson is at least football related, but be warned: There is salary cap math ahead.
The Broncos last month signed Frank Clark to what was widely reported as a one-year deal worth about $5.5 million guaranteed with the chance for the veteran pass-rusher and three-time Pro Bowler to earn up to $7.5 million based on incentives.
On its face, the deal looked like it would chew up a big chunk of Denver’s remaining salary cap space.
Instead, NFL Players Association data currently shows the Broncos sitting at $10.301 million in space as of July 12.
So what gives?
Denver used void years and a relatively rare salary cap rule in order to keep Clark’s cap hit low in 2023 at the expense of some “dead cap” in 2024.
Here’s how they did it.
Basics first: Clark’s base salary is $3.5 million in 2023, according to NFLPA data, and a league source with access to the full contract terms said he also got a $1.5 million signing bonus and $510,000 in per game roster bonuses for a $5.51 million guarantee.
Importantly, Clark also has three void years (2024-26) attached to his deal, according to NFLPA data.
Void years are essentially dummy years that the player and the club both know are only there for accounting purposes. Normally, they are used to allow teams to spread out cap charges via signing bonus money. It’s become common practice in the NFL to pay a player a big signing bonus, which can be spread out over up to five seasons on a team’s cap sheet. This is how the average annual value for Broncos right tackle Mike McGlinchey’s contract is $17.5 million but his salary cap number for 2023 is just $6 million.
Clark doesn’t have a big signing bonus to prorate, but there’s a twist. Article 13, Section 6(iii) of the Collective Bargaining Agreement says that when Year 2 salary is less than half of Year 1 salary, the difference between the two figures should be treated as signing bonus and, thus prorated.
Clark’s number for Year 1 is $5.45 million (slightly less than his guarantee because of a per-game roster bonus calculation). Since 2024 is a void year, the relatively rare rule outlined above applies and the league minimum ($1.21 million) is used as placeholder to make the calculation.
The difference of $4.24 million, then, all gets treated like a signing bonus (even though only part of it actually is) and prorated as $1.06 million over each of the four years of the deal. Add the $1.21 million remainder and you get a 2023 salary cap number of $2.27 million for 2023.
Voila. That’s $3.18 million saved on the 2023 cap compared to a straight one-year deal.
The remaining $3.18 million instead goes on Broncos’ 2024 ledger after the deal voids and Clark becomes a free agent.
Too long; didn’t read? Here’s the bottom line: The Broncos used a cap maneuver that they have not used in at least the past several years in order to lower Clark’s cap number without paying a big signing bonus.
Why does it matter? Clubs are using these mechanics more and more in part because they create short-term flexibility and can be painless when deployed in moderation. First, the cap in all likelihood will be higher next year than it is this year. Also, the Broncos usually roll a good amount of unused cap space from one year to the next ($10.605 million from 2022 to 2023). So if you create space by pushing some of the charge out a year, then roll over unused cap, it’s basically a wash but you’ve maintained flexibility in 2023 for an unforeseen opportunity or in-season acquisition. And each dollar is a lesser percentage of the 2024 cap than the 2023 cap.
“The thought process behind this strategy is that the value of a cap dollar today is more valuable than a cap dollar in the future,” OverTheCap founder Jason Fitzgerald wrote this spring. “In theory this makes perfect sense.”
When clubs kick the can down the road aggressively year after year, however, they eventually can’t catch up without making dramatic moves.
That’s why the other notable development here is the void years themselves. Defensive lineman Zach Allen is the only other known player on the Broncos roster with a void year in his deal (he’s got one) and both he and Clark have joined the club since Sean Payton became the head coach.
Payton’s former team, New Orleans, has 20 players with void years in their contracts that hit over the coming three offseasons, according to OTC-compiled data. In 2024 alone, six players’ void years account for $58.9 million in salary parked on the Saints’ cap sheet. That’s dramatically different than where the Clark deal puts the Broncos, though it’s a warning sign of what can happen if proration is taken to the extreme.
Want more Broncos news? Sign up for the Broncos Insider to get all our NFL analysis.
