Thread: Colts Have Major Decision To Make Regarding Manning..............

Peyton Manning will always be my hero because he played at my university. I will always support him no matter what.

Vikings (if AP is healthy) or 49ers would make the most sense. If I were him, i'd go to the Vikes, and help Ponder out down the line..

Originally Posted by soulman

Peyton Manning will be most-watched NFL story of coming weeks

Will QB and Colts part ways? Will he go to Jets? Dolphins? Seahawks? Retire?

What if he really decides to take his talents down to South Beach and join Joe Philbin and the Miami Dolphins. I've heard this before. ^^

Predicament: Part 3

Cap and cash ramifications of expected release Andrew Brandt

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Print This February 09, 2012, 06:01 AM EST
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First, here are Peyton Predicament Part 1 and Part 2.


As the Winter of Peyton continues with an expected divorce from the Colts (irreconcilable differences?), I have received scores of questions about the financial ramifications of such a move to the Colts. I will try to answer these both from a cash perspective and by pulling down the curtain on the closely guarded mechanics of the Salary Cap. Stay with me here…


Cash

As discussed previously, releasing Manning represents a significant and dramatic cash savings to the Colts. Were the option exercised, the team would be required to pay Manning a $28 million option payment plus a $7.4 million salary, for a total of $35.4 million in 2012. That, combined with the $26.4 million he received in 2011, would mean a combined $61.8 million over two seasons.


Salaries of $8.4, $9.4 and $10.4 million in 2013, 2014, and 2015 follow this year’s salary, although none of these amounts are guaranteed.


Were Manning to be terminated – his contract, not him – all of these numbers would be deleted from the Colts' ledgers.
ICONManning and Luck together would cost almost $51 million in 2012.


Thus, on a cash basis, the Colts would save $35.4 million in 2012 and $63.6 million over the next four years. And, as the Colts plan for the future, approximately $15 million of the 2012 savings and $23 million of the four-year savings will be allocated to the presumed top pick in the Draft, Andrew Luck.


Again, if somehow, contrary to all indications, the Colts exercise the option on Manning and draft Luck, the combined cash to the two players – who play the same position – would be close to $51 million paid in 2012. Paying $51 million for two players at the same position, only one of which will play, is untenable.


Cap

The Cap consequences to a Manning release are a bit more complicated.


One of the main features of Manning’s contract when it was negotiated in July was a $20 million signing bonus at its inception. As per the NFL Salary Cap – unchanged in the new CBA – signing bonuses are prorated over the length of the contract. Thus, the Cap charge for Manning’s signing bonus – before adding any salary -- is $4 million per year every year from 2011-2015.


Remaining signing bonus proration accelerates upon release of a player. Thus, were Manning released, the entire remaining unamortized bonus -- $16 million -- would accelerate into the 2012 Cap. This charge is commonly referred to as "dead money”: amounts on a team’s Cap for players no longer on the roster.


During my nine years in Green Bay, I was always conscious of was making sure that when our Peyton Manning -- Brett Favre -- either retired or was traded (releasing him was never a thought), the Cap acceleration of his contract would not cripple the team. There are graveyards of dead money charges above $10 million upon the retirements/releases/trades of players such as John Elway, Steve Young, Troy Aikman, Jeff Garcia, Mark Brunell, Steve McNair, etc. Favre's "dead money" charge to the Packers’ Cap upon being traded to the Jets was $600,000 (and yes, shameless tooting of my own horn!)

The Option Treatment

The Cap treatment of the option bonus, due to its timing, is rather unique. Since it is due and payable within the 2011 League Year -- the March 8th deadline precedes the March 13th 2012 League Year opening -- the option amount is prorated into 2011 as well as future years of the contract. Thus, $5.6 million – 1/5th of the $28 million option bonus – was allocated as a Cap charge in every year of the original contract.


In the event Manning is released, the Cap charges for the option will come off the books, meaning the $5.6 million charge for 2012 will be deleted and the $5.6 million option proration amount in 2011 will then become a credit to the 2012 Cap, reducing the Colts' Cap charge on Manning by that amount.


Manning's Cap charge, if somehow the Colts exercise the option and keep him, is the following: $4 million (the amount of prorated signing bonus) PLUS $5.6 million (the amount of prorated option bonus) PLUS $7.4 million (the amount of salary) EQUALS $17 million.


So what is Manning’s 2012 Cap charge to the Colts if released?
$16 million (the amount of accelerated bonus proration) MINUS $5.6 million (the amount of credited option bonus proration) EQUALS $10.4 million.


Thus, if the Colts move on from Manning, the consequences of the contract signed five months ago will be $26.4 million in cash and $10.4 million in leftover "dead money" Cap charges.


Stay tuned. Test coming soon.

I get the feeling that Irsay is going to lose his shirt on this deal no matter what. Maybe even his teeth.

Peyton Predicament: Part 4

Spin is on but parting seems inevitable Andrew Brandt



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Print This February 21, 2012, 06:01 AM EST



Here are the Peyton Predicament previous entries Part 1, Part 2 and Part 3.


As the NFL world once again decends on Indianapolis, the epicenter of the biggest offseason decision in the league, this is just getting weird. Colts owner, rock paraphernalia collector and tweet maven Jim Irsay has turned the decision on whether Peyton Manning stays with the Colts into its own reality show/soap opera. Unfortunately for Irsay, he is not the party with leverage in this negotiation.


The latest

We are now smack in the middle of a one-month window where Irsay must either exercise the option on Manning’s contract or release him into the open market. As I have written, the Colts cannot simply let the March 8th date pass (they would still owe him $28 million). They must exercise the option or release him. All indications have been that the Colts would move on: Irsay first spun a potential split and advised the team’s new coach and general manager to avoid the topic like the plague.


Now, Irsay is publicly floating the notion of trying to work something out with his iconic star if, and only if, Manning would accept a lesser contract reflecting his compromised physical condition. Hmmmm.


The spin

In following this saga, I am reminded of the spin between the NFL and the NFL Players Association exactly one year ago. When the lockout appeared inevitable, there was posturing by both sides to win the hearts and minds of football fans. The NFL insisted the NFLPA only wanted to decertify and head to court instead of negotiating to resolve the dispute. The NFLPA asserted – through “Let Us Play” campaigns – that it was the NFL, not them, killing football. Both sides pointed fingers and screamed, “It’s their fault!”


Here, Irsay and Manning have been similarly strategic. Irsay tweeted that he didn’t mind paying Manning $26 million last year, a passive-aggressive move in light of the next approaching payout of $28 million. He has called Manning a “politician” and talked about keeping things “in-house” while politically using the media to take things public.


Manning made sure news was disseminated that he is medically cleared by renowned doctors to resume playing football. With that, he shifted the focus back to the Colts and Irsay, who was quietly hoping that Manning would retire and take some role with the team.

All of this spinning is fine, but …


The contract

The contract was negotiated for the Colts to decide to (1) have Manning on a one- year deal, the year he just completed for $26.4 million, or (2) have Manning on a five-year deal for $90 million, with $35.4 million due in 2012. The choice was theirs.


The Colts made this deal with Manning following multiple surgeries and after allowing his previous contract to expire. They also had no backup plan for Manning, hastily rustling up Kerry Collins from the couch with $4 million to play for them.


As to whether Manning would renegotiate either the date of the option or the terms of the contract, the Colts can certainly ask. And Manning can certainly say “no.”


What’s next?
ICONCondon will bargain hard against a reduced contract.


If, as Irsay suggests, the Colts are actually negotiating with agent Tom Condon, my sense is they would be focusing on the reduction of the guaranteed money – $28 million – due to Manning due to his compromised physical condition.


For Manning to accept this type of deal, however, the Colts would have to provide enough upside to Manning in exchange for their reduced risk. For example, were the Colts to reduce the guaranteed portion from $28 million to, say, $20 million, Condon may require them to provide twice the amount of the reduction – $16 million – in upside potential performance incentives.


In this scenario, Manning would be able to make $36 million – a $20 million option bonus plus $16 million of incentives -- plus his $7.4 million salary for a total of $43.4 million. And, due to the fact that Manning did not play last season, these incentives would be NLTBE (not likely to be earned) and would not count against the Salary Cap until after the 2012 season.


As to moving the date back, again, it serves Manning little to no purpose to allow the Colts more time, and Manning wants to know their decision as soon as possible. Having said that, everything is negotiable. The Colts can try to “buy time” by paying Manning to move the date back.


Manning’s options

My sense is Manning will have several teams interested despite his recent medical issues. And those options may include the Redskins and Dolphins, two teams with ownership history showing a willingness to pay a premium for name brands.


Options create leverage, and leverage creates large guaranteed contracts. Will that guarantee exceed the $28 million Manning is schedule to make? That’s a good question, but my sense is it would be close.


To the future

My continuing belief is that the Colts and Manning will part. The Colts know Andrew Luck is their future; moving on with him is a reasonable and understandable business decision. Organizations need to evolve.

Irsay just needs to tell Manning that. It would be a difficult and uncomfortable conversation, but all parties would eventually be better for it.


Before we get to that, however, I am sure there is much more ahead to "As the Manning Turns". Part 5 of this series is inevitable.