Insider explains how releasing Russell Wilson impacts Broncos' cap situation

Mike Florio of Pro Football Talk speculated the franchise will cut him before the fifth day of the league year in March to avoid paying his 2025 salary ($37M), which would become fully guaranteed if he's still on the roster in 2024.

"The transaction will result in $89 million in cap charges, arising from money already paid and his 2024 fully guaranteed compensation of $39 million," wrote Florio. "The Broncos can either take the entire hit in 2024, or they can designate Wilson as a post-June 1 release and limit the cap charge to $35.4 million in 2024 and $53.6 million in 2025."

While cutting him carries massive cap hits, it doesn't make sense for Denver to keep a QB it no longer wants to build around. The 35-year-old is in the second year of a five-year, $242.5M contract with $161M guaranteed. 

"It's still better than the cap consequences of keeping him," wrote Florio. "His cap number for 2024 would be $35.4 million under his current deal, along with $55.4 million in 2025. That's $90.8 million. Also, cutting him saves $37 million in cash."

During his Wednesday news conference, Denver head coach Sean Payton claimed benching the former Pro Bowler was a football move, not an economic one. However, he's bluffing. Wilson — tied for sixth in the league in TD passes (26) — gives the Broncos (7-8) a better chance to win than backup Jarrett Stidham, who's made two starts in five seasons.

Spotrac estimated Denver will be $20.9M over the cap in 2024. Since the Broncos probably aren't making the playoffs, they want to upgrade their roster, and Wilson's deal makes that a more challenging process.

The Broncos made a mistake when they gave him an extension after trading for the former Seahawks star in 2022. It has created a gigantic mess for the organization.