Since the Broncos still hold the right of first refusal, they were still optimistic that Herndon, a starter for the past two seasons, will be back.
"We think Kelly is a very good football player and we don't want to lose him," Smith said. "He is a restricted free agent and he's not out of the building. But there is (a risk)."
The Broncos like Walls, a 6-4 cornerback who had a good season in 2003 before injuries ruined most of his 2004 season, and think he can be a solid No. 2 cornerback across the field from Champ Bailey. The Broncos also like Herndon, but they didn't feel they could afford to put the same high tender on both players, especially since one won't be a starter. However, without Herndon the Broncos wouldn't have much depth at cornerback.
"You want to protect both of those guys and we don't want to lose either one of them, but you have to make tough decisions," Smith said.
The Broncos' next step, aside from trying to retain Herndon, will perhaps be trying to get Walls locked up past this season.
"We'll talk to the team hopefully about a long-term contract," Walls' agent Drew Rosenhaus said.
--The Broncos will have between $3 and $4 million in cap space going into free agency, and will have a little more if Trevor Pryce is traded. The biggest challenge will be re-signing end Reggie Hayward, but the Broncos are realistic that Hayward's price tag may be too high, especially with few defensive ends on the market who can rush the passer as well as Hayward.
"We're going to be as competitive as we can," Sundquist said.
--Denver needs to upgrade its special teams, but it probably won't bring in a player whose only value is as a punt and kickoff returner. The Broncos have been against using a roster spot on a return specialist and that probably won't change in 2005. The Broncos went through numerous returners in 2004 and struggled all season on special teams.
"You want that big play (return) guy, but you also realize he has to become a part of your team and play offense or defense," Broncos special teams coach Ronnie Bradford said.
QUOTE TO NOTE: "I was sorry to see my time in Denver end. There were a lot of great memories." -- G Dan Neil, a starter on Denver's offensive line in Super Bowl XXXIII, who was released by the team.
STRATEGY AND PERSONNEL
By the time free agency starts the Broncos should have restructured contracts with running back Mike Anderson, tight end Dwayne Carswell, wide receiver Rod Smith, safety John Lynch, quarterback Jake Plummer and center Tom Nalen, which will help them have the cap space to fill some holes.
The Broncos will be looking for a punter who can kick off, some depth at guard and possibly a veteran receiver, but who the biggest priority is the defensive line, where Denver has little depth.
Although the Broncos will be using a 3-4 defense at times in 2005, it won't be their base defense and the team is still looking at players who fit in a 4-3 defense.
1. Defensive line. Even before the team decided to trade Trevor Pryce, defensive line was a priority. They need players who can beat offensive linemen in a one-on-one situation and get to the quarterback.
2. Offensive line. The tackle spots are set with Matt Lepsis on the left side and George Foster on the right side, but the interior is thin. Ben Hamilton is a solid, young guard and could take over for center Tom Nalen when Nalen retires, but Hamilton is a free agent. The Broncos need to find a guard that is capable of contributing right away.
3. Defensive back. The Broncos could lose either Kelly Herndon or Lenny Walls, both restricted free agents, which would leave their cornerback depth thin. That has been a problem in playoff losses each of the past two years at Indianapolis.
FRANCHISE PLAYER: None.
TRANSITION PLAYER: None.
UNRESTRICTED FREE AGENTS: P Jason Baker; OG Cooper Carlisle; DE Marco Coleman; DT Luther Elliss; OG Ben Hamilton; TE Patrick Hape; DE Reggie Hayward; RB Garrison Hearst; DT Ellis Johnson; S Kenoy Kennedy; TE Mike Leach; LB Donnie Spragan.
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