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Wednesday, December 5, 2001
Broncos violate NFL compensation guideline

Associated Press

DENVER -- Although disappointed and confused by the ruling, Denver coach Mike Shanahan said the Broncos will abide by an NFL decision that will cost the team a third-round draft choice and a fine of nearly $1 million.

NFL commissioner Paul Tagliabue found the Broncos guilty of violating guidelines under the league's deferred compensation fund.

The team was fined $305,000 and ordered to pay $663,000 in interest on money the team failed to submit in a timely fashion to the league's deferred compensation fund during a two-year period from 1998-99.

The club said in a statement released Wednesday that it will accept the ruling and pay the fine, plus interest.

"Our disagreement concerned certain technicalities with respect to the rules of funding deferred compensation," the statement said. "We think it is important to note that while the commissioner disagreed with our position, he determined that we did not violate or circumvent the salary cap ... and our actions did not give us a competitive advantage."

Shanahan, commenting on the action, said Wednesday he was "a little disappointed and a little confused. We had no competitive advantage. We had no salary-cap evasion."

"They had the documents from day one and they knew what was going on the whole time, so I am a little confused with that, losing a third-round draft choice (in 2002)," he said. "I understand the fine and I understand the interest. But to be as open as we were with the scenario, and have a third-round draft choice taken away, is disappointing."

Tagliabue sent Broncos owner Pat Bowlen a letter Nov. 13 spelling out the penalties.

Under league rules, each NFL team is required to place a certain portion of its deferred players' and coaches' salaries into a league reserve fund. This is done to ensure that teams do not go into long-term debt and that players who sign contracts that include deferred money are guaranteed it will be available in the future.

According to The Denver Post, the dispute dates to March 2000, when the Broncos were hoping to defer multimillion-dollar payments to running back Terrell Davis and former quarterback John Elway. The players agreed to the deferment, but Tagliabue ruled that 75 percent of the deferred money in the contracts had to be funded immediately.

The Broncos subsequently were forced to pay $22 million of the approximate $29 million they owed Davis and Elway, which they did immediately. Last month's penalties were levied for failure to comply with league policies up to that point.

Earlier this year, the Pittsburgh Steelers lost their third-round draft choice when the league determined it had violated the deferred compensation fund in a manner similar to the Broncos.