http://www.washingtonpost.com/wp-dyn/articles/A28969-2004Sep17.html
Broncos Penalized Again for Salary Cap Violations
By Mark Maske
Washington Post Staff Writer
Friday, September 17, 2004; 5:37 PM
The penalties imposed Thursday on the Denver Broncos for violations of the league's rules regarding the disclosure of deferred compensation to players and the salary cap were the second sanctions against the team for similar infractions in less than three years.
In December 2001, the Broncos were fined $968,000 and lost a third-round pick in the 2002 draft for violations reportedly relating to $29 million in deferred payments to quarterback John Elway and running back Terrell Davis.
On Thursday, the league announced that the Broncos have been fined $950,000 and will lose a third-round selection in next year's draft for circumventing the salary cap between 1996 and '98. The penalties were set in an agreement between the league, the Players Association and the Broncos and resolve a case against the team brought before the sport's special master by the NFL's Management Council in January 2003, the league announced.
The penalties could be viewed as further vindication for Oakland Raiders owner Al Davis, who has said in the past that Broncos owner Pat Bowlen should be suspended for salary cap violations. Davis has contended that the Broncos' circumvention of the salary cap helped them win the Super Bowl in the 1997 and '98 seasons.
Bowlen said in a written statement released Thursday by the Broncos that the club gained no competitive advantage from these cap violations.
"The non-disclosures brought to my attention by the National Football League took place in the mid-1990s," Bowlen said. "We cooperated with the NFL throughout their examination of the situation. 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.
"We accept our penalty, will pay our fine as directed and from this point on put the issue behind us. Our entire organization is working toward a great season in 2004."
Harold Henderson, the chairman of the Management Council and the NFL's executive vice president of labor relations, confirmed in a written statement released by the league that "the individuals responsible for the violations are no longer with the team" and that the Broncos "have been cooperative throughout the investigation." Henderson did not directly address the issue of whether the club gained a competitive advantage but said the Broncos circumvented the cap to help pay for costs related to the construction of Invesco Field at Mile High.
"The investigation resulted in the discovery of undisclosed agreements between the club and Broncos players during the same period [1996-1998] pursuant to which various players agreed to defer certain compensation in exchange for a commitment to pay interest on the deferred amounts," Henderson said in the statement.
"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."
The Broncos reportedly were responsible for about $100 million of the approximately $401 million cost of Invesco Field at Mile High, which opened in 2001 and replaced Mile High Stadium as the team's home.
This set of violations, the league said, was related both to agreements between the team and "several" unidentified players to defer salary payments with interest and to a 1997 agreement between the club and a former player to not waive the player prior to a certain date. "Both types of agreements raised salary cap accounting issues," the league said.
Henderson said of the agreement not to waive the player before a certain date: "That commitment had the effect of converting the player's roster bonus into a guarantee, which affected the timing of the salary cap treatment of a portion of the bonus."
Henderson said the league considered the settlement terms "satisfactory to resolve the dispute."
An unidentified agent for a former Broncos player will donate $100,000 to charity without admitting wrongdoing in the case, according to the league.