They plan on putting the franchise tag on him and then trying to work a longer deal out. In the article, Elway hints that Clady's recent shoulder injury and subsequent surgery is something the team is taking into account:
Last year Clady reportedly rejected a contract of $50 million with $28 million guaranteed. The length of contract was not known.
Overall I would say this move was expected. The Broncos want a longer period of time to negotiate with Clady to come up with a deal that is fair to both while at the same time hedging against possible relapse in play due to injuries. This is the second major surgery Clady has undergone in the last three years---the first being to repair the patellar tendon he damaged in a pick-up game of basketball. It also shows they value his talent and didn't want him to hit free agency.
It is unknown whether or not the tag will be exclusive or non exclusive. Exclusive means Clady belongs to the Broncos and no other team can offer him a deal. Non-exclusive means another team could offer a contract and the Broncos could then 1) match it and retain him 2) not match it and obtain 2-1st round picks from the team that made the offer. My guess is the Broncos will tag him with the exclusive label.
If the Broncos and Clady cannot work a deal out, Clady stands to make 9.66 million this year (which would also be his cap hit. That would leave the Broncos with approximately 5 million in free capspace before making any other moves.
What say you Broncos Country-----Good move, Bad move, or OK move but want a longterm deal done?