September 18, 2004
ENGLEWOOD - The NFL said Thursday it fined the Denver Broncos $950,000 and took away the team’s third-round draft pick in 2005 for circumventing the salary cap between 1996-98.
The salary-cap violations included undisclosed agreements with several players to defer salary payments with interest, and a commitment by the Broncos in 1997 not to waive a player before a certain date. The players involved in the violations were not named.
The league’s management council, the Broncos and the NFL Players Association agreed to the resolution.
"While I regret that the circumstances took place, it is important to note that there was no competitive advantage gained by our organization, nor was there any involvement or responsibility by anyone who is currently with the Broncos in any capacity," owner Pat Bowlen said in a statement. "We accept our penalty, will pay our fine as directed, and from this point on put the issue behind us."
Coach Mike Shanahan has had responsibilty for player personnel decisions since he joined the Broncos in 1995.
Dave Blando, who is now in the Minnesota Vikings’ front office, was Denver’s salary cap director from 1997 to 2001. Harold Richardson managed the Broncos salary cap before Blando. Blando did not return a message left in his office late Thursday, and Richardson, who resigned as the Atlanta Falcons general manager in 2002, could not be reached for comment.
Broncos spokesman Jim Saccomano said Shanahan did not have a comment on the penalties.
In addition to the penalties, an unnamed agent of a former Broncos player also agreed to pay $100,000 to charity.
Harold Henderson, the NFL’s executive vice president of labor relations and the chairman of the league’s management council, said in a statement that the agreement in 1997 not to waive the unnamed player by a certain date effectively meant the player’s roster bonus was guaranteed, which affected the timing of the salary-cap hit for that bonus.
According to the NFL’s statement, part of the reason the Broncos needed to make the deferred salary arrangements was because of the team’s payments to build Invesco Field at Mile High, which opened in 2001.
"These agreements were plainly designed to help the club cope with seasonal cash flow problems exacerbated by the Broncos’ need to fund front-end expenditures associated with development of the new stadium in Denver," Henderson said.
In 2001, the Broncos were penalized a third-round pick in the 2002 NFL draft and had to pay a $305,000 fine and $663,000 in interest after a late payment to the league’s deferred compensation fund. That penalty involved deferred salary payments to quarterback John Elway and running back Terrell Davis.
The Broncos were not penalized for salary-cap violations at that time.
During a trial in February involving Bowlen and former Broncos owner Edgar F. Kaiser Jr., Elway testified he was owed between $14 million and $15 million of deferred salary when he retired after the 1998 season. Bowlen and Elway signed an agreement on Sept. 23, 1998, that offered Elway part ownership of the Broncos for $15 million, and Elway’s deferred salary was to be put toward the purchase.
The agreement was never exercised.
FRANK SCHWAB wrote: