Wednesday, December 5, 2001
Broncos violate NFL compensation guideline
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
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
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
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.