EL SEGUNDO, Calif. -- Los Angeles Chargers coach Jim Harbaugh on Thursday expressed frustration with the Denver Broncos about a nixed trade this week involving linebacker Daiyan Henley.
"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," Harbaugh said. "And in my opinion it's one of those loopholes that the league should really look into because it sets a bad precedent and it continues to set a bad precedent."
Ahead of Tuesday's NFL trade deadline, the Chargers agreed to send Henley to the division-rival Broncos in exchange for a 2027 fourth-round and a 2028 fifth-round draft pick.
When they initially announced the trade Tuesday, the Broncos included that the deal was "pending a physical."
Late Wednesday night, the Broncos announced on social media that the trade would "not be finalized." Neither team disclosed official reasons for why the trade was scuttled, but sources told ESPN's Jeff Legwold and ESPN's Adam Schefter that the Broncos discovered an issue with one of Henley's knees when the linebacker had his physical Wednesday.
"We came to terms on it, made the agreement, they called us up and were asking us to amend the trade based on the physical," Chargers general manager Joe Hortiz said Thursday, while declining to confirm whether it was a knee issue that triggered the failed trade. "And in our minds, the physical's a binary thing. It's pass or fail. And they wanted the player still. They wanted to change the terms. They used it, and we weren't going to do it."
Hortiz said the Broncos were aware of Henley's medical issues when the deal was made.
"Absolutely," he said when asked if he told the Broncos about any health concerns. "Yep, absolutely. 'Hey, he's dealing with this, but he's expected to practice and play for us this week.' And I think that was their plan. They certainly wanted him still."
When asked if teams should be able to renegotiate a deal beyond the deadline, Harbaugh said Thursday, "It shouldn't be, but apparently it is.
"But 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. And they would not pass him for that. They would pass them for a fourth and a fill-in-the-blank. And that was, I don't know what to call that, but that's what it is."
Hortiz said he "100 percent" agreed with Harbaugh that the league should look into the way agreed-upon trades are handled and that he's had "other GMs call me about it today,"
"It's a really unfortunate thing," Hortiz said. "It gives you an opportunity to make a trade at the deadline and then try to change the terms that you already agreed upon and with no recourse. You create a lever standpoint ... it's a loophole that the league allows and they certainly should look into closing it."
Hortiz said he has been in touch with the NFL and that he "wouldn't be surprised to see proposals made about closing the loophole from teams in the league" at the annual meeting in March.
Henley has twice this season been listed on the Chargers' injury report.
In Week 6, he landed there because of a knee issue. After being a limited participant in practice throughout that week, he started against the Kansas City Chiefs, playing 51 defensive snaps and finishing with four tackles.
Last week he was on the injury list because of a shoulder issue. However, he started in the 44-22 loss to the Houston Texans on Sunday, playing 57 defensive snaps and finishing with 10 tackles and an interception.
Harbaugh expressed confusion as to why Henley would have been healthy enough to play for the Chargers, but not the Broncos.
"That's what is confusing to me, too," he said. "There's a loophole there that gives them the opportunity to do that. And yeah, that's something that should set a bad precedent and should be looked into. Medical grade should be based on pass-fail, what the medical grade is not -- not being used by an organization to get less compensation for a trade that was agreed upon."
As the Chargers prepare to face the Baltimore Ravens on "Monday Night Football," Harbaugh said he was uncertain whether Henley would participate in Thursday's practice. He is expected to play on Monday night.
Hortiz acknowledged the difficult situation the botched trade created for Henley as he returned to the Chargers.
"What I'll say, is it awkward? It's the business. What I can tell you is I, and I spoke to Dayon today and I apologized to the situation he was in and I feel tremendously for him and the pain and just where his mind is right now," Hortiz said. "It's a challenging thing, but the reality of it is we love him. We did. That's why we wanted such a compensation package to consider moving him."
A third-round pick in the 2023 draft, Henley has started all eight games in the Bolts' winless season, leading the team with 51 tackles and two fumble recoveries, to go with a forced fumble.
Henley is in the final season of a four-year, $5.4 million rookie deal.