Denver Broncos Positioned to Use Franchise Tag for Demaryius Thomas as Leverage

Christopher Hansen@ChrisHansenNFLNFL AnalystMarch 2, 2015

Denver Broncos wide receiver Demaryius Thomas (88) stretches prior to an NFL divisional playoff football game against the Indianapolis Colts, Sunday, Jan. 11, 2015, in Denver. (AP Photo/Jack Dempsey)
Jack Dempsey/Associated Press

It was inevitable that the Denver Broncos would give the franchise tag to wide receiver Demaryius Thomas. Now, it's official, according to Ian Rapoport of It's the non-exclusive version, the team announced

The Broncos are in a great position to use the franchise tag as leverage in negotiations with Thomas' representatives. Usually, the tag gives the player substantial leverage because it sets the list of comparable contracts, but that's not the case in this situation.

General manager and vice president of football operations John Elway had to use the franchise tag to ensure quarterback Peyton Manning's favorite target would be on the roster when Manning finally gets around to announcing he is returning in 2015. What Elway doesn’t have to do is cave to Thomas' contract demands, even if he wants to sign him to a long-term deal.

When Manning is gone next year, as many expect he will be, Elway may be willing to let Thomas hit free agency. That’s especially true if there is any decline in his production or if last year's second-round pick Cody Latimer is ready to fill his shoes for a fraction of the cost.

If Manning and Thomas are great together in 2015, Manning comes back again in 2016 and Latimer isn’t ready, it won’t cost the Broncos much, if anything, to use the franchise tag on Thomas again in 2016. That would keep him under team control until he is 29, at which point his production may start to decline.

Even if age isn’t a factor because receivers aren’t running backs, Manning’s decline and eventual retirement will likely hurt Thomas’ production. The Broncos would have to be seriously concerned about the return on investment at that point if they choose to sign him to a long-term deal.

If Manning’s production slides and he retires, there will be a huge volume of cash available to give to Thomas if his performance is great in 2015. At that point, Thomas would have more leverage, but the Broncos would also have more flexibility.

The Broncos would also need Thomas to help their next quarterback, who won’t be nearly as good at developing wide receivers as Manning has been throughout his career. Quarterbacks like Brock Osweiler, Zac Dysert, rookies and veteran journeymen need a No. 1 receiver to jump-start their development. Osweiler and Dysert would have the advantage of already having chemistry with Thomas.

The only drawback is an inability to push Thomas' cap hit into the future via prorated bonus money. If the Broncos were thinking of another offseason spending spree, this would be one of the few ways to get it done—at the expense of cap flexibility in the future.

That could be money they could give to tight end Julius Thomas or, more likely, offensive linemen to protect Manning and keep the passing game on track. If they want to, they can probably still do that, but pushing gobs of cap dollars into the future goes against what the Broncos have done with other player contracts.

With the salary cap set at $143.28 million in 2015, the franchise tag for Thomas is $12.8 million. Next year the tag would be $15.4 million, which is 120 percent of his 2015 tag. In total, that’s about $28 million, all guaranteed. Compared with the contracts of top wide receivers, it’s not bad.

Calvin Johnson has $48.8 million guaranteed on his deal, Mike Wallace has $27 million, Vincent Jackson $26 million and Larry Fitzgerald $22 million. They did, or they will, earn more when adding in base salaries and other bonuses. They’re all older than Thomas, but that’s what makes them such bad deals.

Even six-year contracts are roughly half that in practice. Teams don’t want to pay players beyond a certain age because their production inevitably declines. The Broncos can avoid the issue by just using the franchise tag and letting Thomas go when his production declines or his price comes down.

WR Contract Comparison
PlayersAgeYearsTotal ValueGuaranteed
Demaryius Thomas (2015 & 2016 Tag)28-292$28.2M$28.2M
Calvin Johnson27-346$113.5M$48.8M
Mike Wallace27-315$60M$27.0M
Vincent Jackson29-335$55.6M$26M
Larry Fitzgerald32-332$22.0M$22.0M

Though it hasn’t happened yet, the market for wide receivers could also collapse as it did for running backs a few years ago. At least, a devaluation could happen soon, as NFC North Lead Writer Zach Kruse has postulated.

Among the reasons for it is that the receiver position has become the glory position, and college offenses have broadly adopted the spread. The result has been great college receivers pouring into the NFL in record numbers.

Receivers are also playing and producing earlier in their careers because of NFL rules that limit contact within five yards. These are rules Manning, via then-Indianapolis Colts general manager Bill Polian, helped to strengthen more than a decade ago, and they were again a point of emphasis in 2014 after he lost to Seattle’s physical secondary in the Super Bowl.

Good receivers are going to be easier and easier to find. Since receivers have longer careers than running backs, that’s only going to increase the market supply. Unlike running backs, who have a short shelf life, receivers can produce into their 30s. Right now, they are still in demand, but it’s not hard to envision a change in the near future.

It’s not that Thomas isn’t an elite NFL receiver or that the team doesn’t want him, but the yearly franchise tag option isn’t a bad one. The Broncos were likely going to give that kind of guaranteed money to Thomas in a long-term deal, so the only difference is the other compensation and up front guarantee that might buy them an additional year or two of production for an affordable price.

Two years from now, they still might be able to get those two years of production at an affordable price. They might get it from a rookie for half the cost, the free-agent market could be flooded with good options or Thomas’ price could make more sense at that point.

While it’s still likely Thomas gets a long-term deal from the Broncos, they should be able to get favorable terms. They won't have to get into Johnson or Fitzgerald deals. They just have more options than Thomas, who theoretically can sign with another team if he wants, though he is unlikely to find someone willing to give him the contract he wants and give up two first-round draft picks to do so.

Unless otherwise noted, all salary cap data via