After reports that offensive tackle Russell Okung signed a five-year deal worth $10.6 million per year, further details came out that showed Okung basically signed two contracts in one.
Okung signed a one-year deal worth $5 million with a team option at the end of the year for a four-year deal worth $12 million per year with $20.5 million guaranteed.
Then Denver has a window after the season to opt to pick up an option for a 4yr deal (2017-2020) worth $12M/year w/$20.5M guaranteed...— Jason La Canfora (@JasonLaCanfora) March 17, 2016
Okung can earn another $3 million in incentives this season. So he could potentially earn $8 million this season if he meets these incentives.
This structure protects the Broncos if Okung struggles and/or suffers an injury that keeps him out for an extended period of time. If Elway and the coaches do not like what they see, they can simply decline the team option next offseason and move on.
It's a low-risk, high-reward move for the Broncos.
Okung does come with some injury baggage. He has missed a total of 13 games the past three seasons due to injury (Clady missed 30+ games during that three-year span).
However, if the Broncos like what they see from Okung, they can accept the team option and pay Okung starting left tackle money. They would also lock up an elite left tackle for four seasons.
Denver Broncos General Manager John Elway did a masterful job with this contract.