Joe Baker breaks down Peyton Manning’s atypical contract and how it might affect the Colts as the team moves forward.
The biggest off-season question for the Colts is what to do with Peyton Manning and Andrew Luck. Can they coexist? Should they coexist? If not which QB do you go with?
The biggest obstacle to Manning and Luck being on the same roster may not be ego, or value, it might be the cap. Not the hit Andrew Luck’s contract would put on the cap, the new rookie wage scale makes him quite affordable relative to top 3 picks pre-2011. It’s the cap hit from releasing or trading Peyton Manning that could prevent the Colts from keeping both.
Peyton Manning’s contract included $51million in bonuses, a 20million dollar signing bonus (which for cap purposes is spread evenly over the 5 years of the contract), a 3million dollar roster bonus in 2011 (which goes against the 2011 cap) and a 28million dollar option bonus (the cap hit of which is spread over the 4 years remaining on the deal).
Right now the Colts have paid Peyton 23 million in bonuses, and only had 7million count against the cap leaving 16mil outstanding. The Colts have to take this money against the cap, and if he’s released or traded they have to take it over the following 2 years. 16mil is a lot of dead cap, but what happens if Peyton is still on the Colts roster when his option bonus is due, March 8th?
With 28million more paid to Peyton in March that would bring the outstanding bonus money to 44 million, making releasing or trading Peyton between March 8th and the 2012 season totally impossible. During the 2012 season 1/5th (4mil) of the signing bonus and 1/4th of the option bonus (7mil) will be counted against the Colts 2012 cap, reducing the outstanding bonus money to 33million. Still a monsterous cap hit to take, enough to cripple a team trying to transition to an Andrew Luck era. In 2013 another 11mil of that bonus money is paid on the cap getting the Colts within shouting distance of where they are now at 22mil. Cutting or trading Peyton after 2014 would leave 11mil of dead cap, by which point Andrew Luck will have sat on the bench for 3 years.
Cut or Trade Peyton before March 8th: 16mil of dead cap
Cut or Trade Peyton after March 8th: 44mil of dead cap
Cut or Trade Peyton after 2012: 33mil of dead cap
Cut or Trade Peyton after 2013: 22mil of dead cap
Cut or Trade Peyton after 2014: 11mil of dead cap
After 2015: Peyton’s contract expires