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  • Writer's pictureChristian Novarro

New Broncos Owners Make a Statement with Huge Investment in Coach Sean Payton

Updated: Jan 17

In June 2022, a group led by Rob Walton and Greg Penner spent a record $4.65 billion of their Walmart fortune to purchase the National Football League’s (NFL) Denver Broncos.[2] After recently landing former New Orleans Saints head coach, Sean Payton, they put the NFL on notice and showed their fans they will do whatever it takes (and costs) to put out the best product on Sundays.

Sean Payton’s contract with the Broncos is for five years and is “in the neighborhood of” $18 million a year.[3]The contract makes him the second highest paid head coach in the NFL behind Bill Belichick, who reportedly earns around $20 million a year in New England.[4] In addition to this massive contract, the Broncos also traded the Saints a 2023 first-round pick (No. 29 overall) and a 2024 second-round selection for the rights to Sean Payton and a future third-round pick from the Saints.[5] This is only the fourth time in league history that an organization traded at least a first round pick to acquire an opposing coach’s rights from another franchise. The three previous trades saw Bill Parcells move from the New England Patriots to the New York Jets in 1997, Bill Belichick from the Jets to the Patriots in 2000, and Jon Gruden from the Oakland Raiders to the Tampa Bay Buccaneers in 2002.[6]

The Sean Payton trade and hire is the second big splash the Broncos' new owners have made since taking over. Before the start of the 2022-23 season, the Broncos traded two first-rounders, two second-rounders, a fifth-rounder, quarterback Drew Lock, defensive tackle Shelby Harris and tight end Noah Fant to the Seattle Seahawks for veteran star quarterback Russell Wilson and a fourth-round pick.[7] Shortly thereafter, Wilson and the Broncos agreed to terms on a five-year extension through the 2028 season for $245 million with $165 million guaranteed.[8]

In less than a year, the Broncos have committed over a quarter of a billion dollars on one player and now a new head coach... do not expect this sort of spending to stop anytime soon. For example, just a couple weeks before signing Sean Payton, the Broncos began the single-largest capital improvement project on 22-year-old Mile High Stadium. [9] Upgrades are expected to cost the owners another $100 million, and include updates to the stadium’s scoreboards, luxury suites, concessions areas, and more.[10]

All of this spending in Denver is not a surprise, considering Rob Walton has a net worth of approximately $59 billion, making him by far the richest owner in the NFL.[11] His net worth is more than double that of any other ownership group (The Allen Family of the Seattle Seahawks is second with a net worth of around $20.3 billion). Furthermore, half of the NFL’s owners have a net worth that is less than $5 billion – about 12 times less than Mr. Walton.[12]

Luckily for the rest of the NFL, there are limitations on how much money a team can spend on its players. The NFL has a salary cap that all 32 teams cannot go beyond. Each team will have a salary cap of $224.8 million that they cannot surpass for 2023.[13] There are ways that richer organizations can take advantage of the salary cap each year with a concept termed “cash over cap.” The easiest method to spend above the cap comes from signing bonuses.[14] To give an example, if a player is given a three-year deal with a $15 million signing bonus, only $5 million of that bonus will apply to the salary cap in the first year of the deal. The other $10 million will affect the cap in the remaining years of the deal ($5 million in both the second and third years.)[15] In this hypothetical scenario, the team spent $15 million, but only $5 million was accounted for on the salary cap for the upcoming season.

Therefore, the Broncos can theoretically spend more than the salary cap allows in a given season. However, that money will always show up on a team’s salary cap at some point down the line and would restrict the amount a team can then spend in those later seasons. No matter how rich the Broncos’ owners may be, the NFL’s salary cap restrictions prohibit them from using their wealth to gain an unfair advantage. But the salary cap only applies to players. There are no restrictions on how much a coach can be paid. The same goes for scouts, front-office executives, and other highly coveted personnel.

The Sean Payton hire makes it clear that the Broncos’ owners can and will continue to spend whatever they can to improve their team. How they will use their fortune to their advantage is unclear, but it will be an interesting situation to monitor in the years to come.

References: [2] Daniel Chavkin, Sean payton to Earn About $18 Million Annually As Broncos Coach, per Report, (6th February 2023) [3] Id. [4] Id. [5] Jeremy Bergman, Broncos agree to deal with Saints to hire Sean Payton as head coach, (31st January 2023) [6] Eric Mullin, A look at past NFL coach trades as Broncos land Sean Payton, (31st January 2023) [7] Kevin Patra, Broncos acquiring Seahwaks QB Russell Wilson in trade including Drew Lock, multiple picks, players, (8th March 2022) [8] Kevin Patra, Russell Wilson, Broncos agree to terms on five-year, $245M contract extension, (1st September 2022) [9] Id. [10] Alexander Kirk, Construction begins at Empower Field: Here's what fans can expect, (3rd February 2023) [11] Tommy Garrett, NFL’s Richest Owners Ranked From 32 to 1 (Updated 2023), (20th January 2023) [12] Id. [13] Mark Lane, NFL 2023 salary cap: Which teams have the most, least space?, (14th February 2023).,with%20%24224.8%20million%20in%202023 [14] Mike Florio, Cash-over-cap becomes viable solution for coming 2021 salary-cap crunch, (27th February 2021) [15] Id.

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