Jim Harbaugh Says Broncos Used 'loophole' To Base Daiyan Henley's Physical On If Chargers Would Take Less Trade Compensation

Los Angeles Chargers head coach Jim Harbaugh told reporters Thursday that the Daiyan Henley trade fell through after the deadline because the Denver Broncos used a "loophole" to base the linebacker's physical on whether the Chargers would take less compensation.

Henley was supposed to go to Denver, with L.A. receiving a 2027 fourth-round pick and a 2028 fifth-round pick in return.

That exchange was agreed upon prior to Tuesday's 4 p.m. ET deadline, but, like any trade, it was pending a physical. While the Broncos didn't provide a rationale for why the transaction wasn't finalized in their Wednesday night statement, NFL Network's Ian Rapoport reported Thursday morning that what Denver viewed as a "failed" physical was the official reason for it being nixed.

Henley was on the Week 9 injury report with a shoulder issue; however, he wound up playing most of the Chargers' defensive snaps last Sunday versus the Houston Texans. Earlier this season, a knee injury limited him during Week 6 practice. But he hasn't missed a game amid the 2026 campaign.

According to Harbaugh, the calculus behind the scrapped deal wasn't as simple as dissent between two medical staffs.

"Here's what I know from talking to Joe," Harbaugh said, via Alex Insdorf of "Guilty As Charged Podcast," referencing Chargers general manager Joe Hortiz.

"The Broncos based a pass-fail on a medical grade, based on whether we would take less compensation, and we wouldn't, and we didn't. And in my opinion, it's one of those loopholes that the league should really look into because it sets a bad precedent, continues to set a bad precedent."

Harbaugh, now in his seventh season as an NFL head coach, was then asked during his Thursday news conference if it's even allowed for teams to renegotiate terms pending a physical after the deadline.

"It shouldn't be, but apparently it is," Harbaugh said. "That's why it's a loophole, and teams should not have the ability to do that.

"I mean, it's a medical grade. It's a pass-fail for a medical grade. And they told us they weren't going to pass him if it was a fourth and a fifth, which was agreed upon. They would not pass them for that. They would pass him for a fourth and a fill in the blank."

When the reporter following up inquired to confirm that the Broncos tried to downgrade the second pick in the deal — the 2028 fifth-rounder — Harbaugh said, "Correct."

Denver reportedly was granted permission to revisit the terms of the trade with L.A. after consulting with the NFL on Wednesday. The Broncos, according to a Thursday report from The Athletic, determined that their medical evaluation of the soon-to-be 27-year-old Henley didn't align with the information the Chargers put forth prior to the trade agreement.

Even though Denver failed Henley on his physical due to a knee issue, it still tried to rework the deal, per The Athletic.

This, of course, isn't the first failed physical to get in the way of an NFL trade. Famously, that was the reported explanation for why the Baltimore Ravens backed out of their seismic deal for Las Vegas Raiders star pass rusher Maxx Crosby this past offseason. The Raiders would've acquired a pair of first-round picks, had Baltimore been comfortable with Crosby's surgically repaired knee.