How Sean Payton Rebuilt The Denver Broncos In 3 Years

How Sean Payton Rebuilt The Denver Broncos In 3 Years

3 years ago, the Denver Broncos were one of the NFL’s worst teams. Today, they’re in first place in the entire NFL. How did they do it? I’m Henry Chisum, and today we’re digging into Shawn Payton’s rebuild, how he took one of the NFL’s bottom feeders and turned them into a Super Bowl contender in 3 years. And I’ll just give you the answer right away. The answer is money. It’s cash. And how the Broncos use that cash in a different way than any other team in the entire NFL. Let’s set the stage. Hopes were high for the 2022 season. The Broncos had struggled in the recent past, but had hope for the future because they just hired Nathaniel Hackett away from the Packers where he was helping Matt Laflur and Aaron Rogers put together some of the NFL’s best offenses. They had traded for Russell Wilson, a Super Bowl winning quarterback. They thought that duo could power the offense and put them back into contention. Denver believed, Vegas believed, the sports books actually set the win total at 10 and a half for that season. It was the highest line for the Broncos since Pton Manning had left town seven years before. Fortunately, it didn’t work out for the Broncos. They only won five games. The record was the second worst for the franchise since John Elway came to town in 1983. The Hackett and Wilson duo finished dead last in the NFL in scoring. And Nathaniel Hackett became just the fifth coach in the previous 50 years to be fired before the end of his first NFL season. The Broncos bottomed out. They needed a rebuild. And how do you rebuild in the NFL? Well, the path is usually pretty simple. You trade away some of your veteran players, picking up more draft picks. By trading away those veterans, your team gets just a little bit worse. And that means that instead of having maybe the 10th pick in the draft, might bump up to a top five pick. You’re improving that draft capital while also in via the trades adding more draft capital. You invest in young players. And while the rebuild might not put you into contention quickly, eventually it should work out. And just having that path forward, knowing that there’s a plan in place gives you a little bit of hope. That’s the way you rebuild in the NFL. It’s not the way the Denver Broncos rebuilt, though. Not at all. Now, why weren’t they able to rebuild through the draft? Well, here’s one reason. They traded for Russell Wilson. And when they traded for him, they had to give the Seattle Seahawks two first round picks and two second round picks. After firing Nathaniel Hackett, the Broncos decided they wanted Shawn Payeyton, a Super Bowl champion head coach, to lead the charge. Now, how did they add Shawn Payton? Well, they had to trade for him from the New Orleans Saints. He cost another first round pick and another second round pick. A rebuild through the draft was not viable. So, luckily, Shawn Payeyton came to Denver with a vision. And NFL analyst and former NFL quarterback Chris Sims laid out that vision pretty well for us at the Super Bowl just a few days after Shawn Payeyton was hired. I will be shocked if the first thing that’s not done as far in free agency or big move is offensive line. Yeah. He’s gonna go just what he did with Drew Brees. He’s gonna get the biggest group of big shot. Shawn Payeyton wanted to build the Broncos from the inside out. Now, lacking draft picks to do this, he decided to spend some money. Now, we forgot one thing about the 2022 season. Not only did the Broncos trade for Russell Wilson, add Nathaniel Hackit, but a couple weeks before the season, they added a new ownership group. The Walton Penner ownership group bought the team just a month, a couple weeks before the season began and immediately became the wealthiest ownership group in the NFL. So, when you have that money, it makes a little bit easier to spend money in free agency. In Shawn Peyton’s first free agency, he spent $255 million, easily the most in the NFL. Broncos added three big in particular. The first was Mike McGllinchi who was a top 10 pick of the San Francisco 49ers. A right tackle who they couldn’t afford to bring back because they had so much talent on the team. The Broncos took advantage. The second was an interior lineman, left guard Ben Powers of the Baltimore Ravens. And the third was Zack Allen. Now, Zack Allen played for uh defensive coordinator Vance Joseph of the Arizona Cardinals. And when the Broncos hired Vance Joseph as their defensive coordinator, Vance decided to bring his star defensive lineman with him to Denver. Let’s jump ahead a little bit. 2023 was certainly better than 2022. Broncos won eight games. They looked like a functional football team, but Shawn Payeyton and Russell Wilson never really clicked. The breakup seemed to be inevitable. There were some flaws in the offense. And at the end of the season, the Broncos cut Russ and started shopping for a quarterback. The quarterback they decided on was Bo Nicks, who is a first round pick in 2024, the sixth quarterback off the board. Now, I said this isn’t the story of a rebuild through the draft, and it really isn’t. But there were a couple of players the Broncos drafted who are important to what’s happening right now in Denver. Bo Nicks is the face of them. Bicks in the past 18 months turned himself into a pretty good NFL quarterback. Is he the reason they’re 9-2? Of course not. But he’s an important cog in the machine at the very least. And the Broncos have found a couple of other guys like that through the draft in the Shawn Payeyton era. Two of them are starters and Troy Franklin and Riley Moss. A couple more are important rotation players in Jonah Ellis and Chris Abrams drain. At least they provide depth. And you also have Marvin Mims who’s turned into an allpro returner and factors into the offense somehow. Still, this group of players is not why you’re 9-2. They’re cogs in the machine. The story, like I keep saying, is the money. You’ve got the big in 2023. On the back end of your defense, you’ve got Tano Funka and Brandon Jones. This off season, you added a few guys and Dre Greenaw. You added Evan Ingram who are expensive. Uh JFM and Malcolm Roach in the trenches are important pieces of what the Broncos are doing defensively. You also gave massive money in extensions to Patan, Nick Bonito, Quinn Miners, Portland Sutton, Garrett BS, Jonathan Cooper, Zack Allen. They reuped him again. There are so many players who are making so much money. Again, credit to them for drafting these guys back in the day, but we’re talking about the Shawn Payeyton era at Rebuild, and those guys were pre-shawn Peyton, but have stuck around for the most part. The Broncos have spent so much money in the past few years. And on top of that, they had to take a $50 million cap hit for Russell Wilson in 2024. And this year, taking a $32 million cap hit for Russell Wilson, which just adds to the bill even more. How can you afford to do this? Well, we got to get back to the basics to talk it through. Let’s start here. There are essentially three different kinds of money that you can put in a contract. The first is a bonus. It’s a simple payment that the team gives a player either as a signing bonus or maybe it’s a bonus at a scheduled date later on. Second, you have the salary, which is the money that the team gives the player each season in the form of just a weekly paycheck. Finally, you’ve got the incentives. You know, get a million bucks if you make a Pro Bowl, for example. Now, the incentives are a small part of the equation and they kind of make the math a little bit tougher. And we just want to make this simple. So, we’re just going to ignore the incentives going forward. The NFL salary cap is the maximum amount of money that a team can spend on its players every year. And the reason you implement it is so you don’t have a Los Angeles Dodgers in the NFL, a team that spends a billion dollars on its roster. Makes the game a little bit unfair. Now, every dollar that a team gives a player has to be accounted for in the salary cap. There’s no way around it. You give them a dollar, that dollar has to be accounted for. But the type of dollar that you give a player can change when it is accounted for in the salary cap. Let’s look at an example. Say the Broncos give somebody a 5-year $100 million contract. We’ll just say the entire thing is salary. There are no bonuses, no incentives. Keep it simple. He just gets his $20 million per year. And that means the salary cap hit is just $20 million every year. Nice and simple. And we don’t have to spend too much time thinking about it. But a bonus works differently. A bonus, at least in terms of the salary cap, is prorated across the entirety of the contract. So if you give a guy a $50 million signing bonus, he gets his $50 million right up front, but you get to account for it in $10 million chunks, one in each of the five years of the 5-year contract. That means you get to give him the cash early, but you don’t have to account for it until a few years down the line. Again, the team still has to account for every dollar, but they get to delay the timing of some of these cap hits. Let’s take a look at a second example. Once again, the contract is $100 million over 5 years, but this time we’re giving the player half of that money upfront in the form of a signing bonus. Since he gets that $50 million up front, we’re going to say his year one salary is just $0. He’s happy with the $50 million you gave him. Technically, you can’t do that in the NFL. You have to pay the minimum salary, but we’re trying to keep these numbers nice and simple. We’re also going to increase the salary slightly from year two through year five. Player likes it. He’s just fine with it because you already gave him $50 million up front. If you take a couple million off year two and move it to year five, he’s still coming out way, way, way ahead. The result, player gets his $100 million and the team gets to delay the salary cap impact. This concept is not new. Teams have been doing it forever. Every team in the NFL does it. What’s new is the rate at which the Broncos are doing it. Essentially, the Broncos are creating loans in a way, interestf free loans, by saying, “We’re going to give you this money now, but account for it down the line.” Again, this loan only applies to salary cap. You have to pay the cash up front. And thanks to the owners, that’s a possibility in Denver. The guys over at overthecap.com track prration rates. Essentially, it’s how much of a team’s guaranteed money is prrated. Um, how much money is spread over the life of the contract instead of just accounted for right when you give them the money. Say a team includes $100 million in guaranteed money in a contract for a player. This money can generally fall into one of two categories. The first is guaranteed salary. You say, “I’m giving you $20 million in 2028 and I’m going to fully guarantee that. Doesn’t matter if we cut you or whatever may happen. You’re getting that money. You can also take guaranteed money and put it into a signing bonus and pay it upfront. Again, you kind of like that if you’re the player. And you get to prorrate it like we’ve been talking about over the course of the contract. delay the cap hit. On average, the median team in the NFL puts about 57% of guaranteed money into the signing bonus. It’s about $1.32 in signing bonus for every dollar in guaranteed salary. Those are your two categories. In other words, $132 to1. That’s a pration rate of 1.32. That’s the median in the NFL. The Broncos though, their rate 12.72. Massively different. Three times more than any other team in the NFL. It’s revolutionary. It’s why the Broncos are capable of spending as much money as they have spent. Without the strategy, the roster would look a little bit different. You would be down a couple of starters. If the Broncos couldn’t have added Town Funa this off seasonason, what would they look like? Or JFM the year before. What would they look like? They’d still be a good team, but would they still be 9 and2? Remember, the Broncos are 7-2 in one-score games. The margins are pretty slim in the NFL, and the Broncos are finding ways to add more players on the margins. Now, those are all hypotheticals. The fact is that the Broncos have increased their immediate spending power, but the bill will come due. You’re not saying we don’t have to account for this money that we’re paying the player. We just have to account for it later on. Let’s look at how that’s going to impact the Broncos in the future. This year, thanks to some nifty cap work, the Broncos don’t have too many hefty cap hits. Only five players account for $10 million or more against the salary cap. But if you look at next year’s top five cap hits, you’ll see a jump in 2027, another jump, and another jump in 2028. And again in 2029 when the Broncos only have four players under contract, but those four players look like they’re going to be pretty expensive. The bill always comes due. If you give a player a dollar, you have to account for it in the salary cap eventually, but the salary cap will also keep growing. The NFL introduced the salary cap in 1994. The spending limit was just under $35 million. By 2002, the salary cap had doubled. Between 2002 and 2015, the cap doubled again. 2026 cap will be double the 2015 cap. It’ll be the third time the salary cap has doubled since it’s been introduced. But the Broncos big contracts will outpace even that growth. Their top five cap hits this year account for about 27% of their cap space. Their top five cap hits in 2028, which is the last year they’ve got at least five players under contract, will count for 41% of their 2028 salary cap. That’s based on Spotreak’s current projected salary cap. The salaries are growing faster than the cap. So, how will the Broncos counteract that? Step one is you start drafting. Well, you have all your draft picks. If you can draft good players, develop them into even better players, you can probably backfill your roster when you start losing guys like a JFM or whoever it may be. And if you keep doing that, you may be able to take this one-time influx in talent that you were able to afford through some of these loans and sustain it in the long term. Step two is if you’re trying to sign a free agent in say 2029 and you want to give them $100 million over 5 years, maybe just give them a massive signing bonus up front. make that early cap hit low and let it build over time and kick that can down the road and kick it down the road again and again and again and hope that the NFL never changes how it calculates salary cap hits because you can really manipulate things with cash like the Broncos are doing right now in a way that nobody has ever manipulated salary caps before [Applause] silly like the mayor

Sean Payton rebuilt the Denver Broncos from the Nathaniel Hackett–Russell Wilson disaster to a 9-2 juggernaut at the top of the NFL, and this video breaks down exactly how it happened. We dive into how the Walton-Penner ownership’s deep pockets, aggressive free-agency splashes, and creative salary-cap maneuvers turned a five-win joke into a Super Bowl contender in just three years. From the Russell Wilson trade fallout to landing Bo Nix and building an elite core around stars like Pat Surtain II, Quinn Meinerz, and Zach Allen, we show how Denver used cash and cap wizardry instead of traditional draft capital to rebuild. If you’re a Broncos fan—or just obsessed with NFL team-building and salary-cap strategy—you won’t want to miss this breakdown.

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