PDA

View Full Version : Manning To Restructure


TexanAddict
02-21-2007, 03:44 PM
Peyton Manning has agreed to restructure his contract with the Indianapolis Colts to save the team nearly $8 million in salary cap space.
si.com (http://sportsillustrated.cnn.com/2007/football/nfl/02/21/bc.fbn.colts.manningdea.ap/index.html)

Looks like the Colts won't be having quite the fire sale some predicted.

El Tejano
02-21-2007, 03:53 PM
I hate to say it but these days in sports, guys like Manning are very rare.

Ole Miss Texan
02-21-2007, 04:04 PM
Really makes me wish we got the Texans in 1998 and drafted peyton.

He's a great guy, good character, and a true leader on and off the field. puts the team ahead of himself. even when he was going for that TD record, the better play was a run so he handed it off.

jlam
02-21-2007, 06:09 PM
Not to take away from Manning's character or anything, but he's not giving up a penny to do this. He still gets the same amount of money at the same time he was going to get it before if I understand this correctly. The only thing that's being done is to convert his bonus from a roster bonus to a signing bonus and pro-rating it over the next couple of years. Sure, it saves money on the cap this season, but they make it up by having a higher cap number the next few years.

Someone on the Saints board laid out a nice example:

There are plenty of different kind of restructures. Some mean less money for the player, some dont. Plenty of restructures happen that people don't talk about, as well. The Eagles restructure players deals in mid-season all of the time to circumvent one of the cap rules.

Let me give you an example of what exactly this did if you don't completely understand how it works.

Lets say, for ease of example, Peyton signed a 5 year deal for 60 million in 2005 with a 10 million dollar signing bonus and a 10 million dollar roster bonus due in 2007 and the salary is the same each year (although it never is).

Here's Peyton's actual payout:

2005 Signing Bonus: $10m
2005 Salary $8m
2006 Salary $8m
2007 Roster Bonus $10m
2007 Salary $8m
2008 Salary $8m
2009 Salary $8m

Here would be the cap hit for this deal:

2005: 10m
2006: 10m
2007: 20m
2008: 10m
2009: 10m

Now, if the team were to convert the $10m Roster bonus in 2007 to a signing bonus, this would be paytons actual payout.

2005 Signing Bonus: $10m
2005 Salary $8m
2006 Salary $8m
2007 Signing Bonus $10m
2007 Salary $8m
2008 Salary $8m
2009 Salary $8m

It's exactly the same. Doesn't lose a penny, doesn't defer any money to later.

Here's the cap hit after this restructure:

2005: 10m
2006: 10m
2007: 13.3m
2008: 13.3m
2009: 13.3m

The team saved 6.7 million in 2007, but cost 3.3 million more in both 2008 and 2009. Again, Peyton does not give up or delay one penny in the deal. It's purely a cap numbers move. Any player would make this move, because it really doesn't change anything on his end.

Ole Miss Texan
02-21-2007, 06:51 PM
Yea he really isn't losing anything. But unless the give him interest...he's losing some. Think about if he would have gotten all that money next year and invested it. Doesn't cooper do some investing for his brothers??

I bet peyton makes a killing with his investments and interest he earns on some of them.

A dollar today is worth more than a dollar tomorrow.

Ole Miss Texan
02-21-2007, 06:53 PM
Oh wait a minute. So does he get all that money still in the same year? Is the restructuring just for accounting purposes.....thus it would be reflected in the cap.

either way he still gets it now?

jlam
02-21-2007, 07:01 PM
Oh wait a minute. So does he get all that money still in the same year? Is the restructuring just for accounting purposes.....thus it would be reflected in the cap.

either way he still gets it now?

Now ya got it. :)

He still gets every penny on the exact same day as he would have had he not restructured. Nice gesture for sure, but hardly benevolent.

This is pertinent to us Saints fans because Drew Brees is due a similar roster bonus very soon and it remains to be seen whether his contract will undergo a similar restructuring. I guess it all depends on what we plan to do in FA and how much money we plan on spending. If we don't plan on spending very much money this offseason, then it makes more sense to go ahead and absorb the entire hit this year, thus freeing up that money on the cap the next few years.

Colts Addict
02-22-2007, 12:02 AM
The thing about pushing the money ahead in years though, is the way Peyton's contract is set up... he has voidable years. It was done that way for a reason. In all likelyhood, those years will be voided and new 'cap friendly' contract will be put into place for him to retire on, once we get to that stage.

jlam
02-22-2007, 09:06 AM
The thing about pushing the money ahead in years though, is the way Peyton's contract is set up... he has voidable years. It was done that way for a reason. In all likelyhood, those years will be voided and new 'cap friendly' contract will be put into place for him to retire on, once we get to that stage.

That's a good point. I'm not intimately familiar with Manning's contract, but what you're saying is that by pushing that cap hit back, then voiding the last few years of his contract, those last few larger (than before prorating the bonus) cap hits will be eliminated?

And if so, how are you so sure that Manning will sign such a cap friendly contract if he continues to put up HOF numbers?

Colts Addict
02-22-2007, 09:33 AM
That's a good point. I'm not intimately familiar with Manning's contract, but what you're saying is that by pushing that cap hit back, then voiding the last few years of his contract, those last few larger (than before prorating the bonus) cap hits will be eliminated?

And if so, how are you so sure that Manning will sign such a cap friendly contract if he continues to put up HOF numbers?

Because he isn't a team jumper. He wants to retire a Colt...

jlam
02-22-2007, 10:06 AM
Because he isn't a team jumper. He wants to retire a Colt...



Well, even if the last few years of his contract are voided, that still wouldn't affect this restructuring as far as how much money he's getting and when he's getting it. As was previously stated, he's getting all that bonus money at once anyway. So regardless of whether or not it is stricken from the books as far as the salary cap is concerned after the last few years are voided, he still gets all his bonus money.

The point here is that many are taking this restructuring out of context as a "classy" move by Manning to take less money in order to free up money for the Colts to spend elsewhere, which is simply not the case. Now if the scenario you have suggested plays out and he ends up retiring for Indy after ripping up the last few (likely backloaded) years of his contract in favor of one that's more cap-friendly, then that may be more worthy of praise. However, as of yet he hasn't done anything that 99% of players in this league wouldn't do. In fact, this happens on a regular basis with pretty much every team, just usually with lower profile players and less exorbitant amounts of money (how do you think Washington manages to get under the cap every year?).

Colts Addict
02-22-2007, 12:36 PM
Well, even if the last few years of his contract are voided, that still wouldn't affect this restructuring as far as how much money he's getting and when he's getting it. As was previously stated, he's getting all that bonus money at once anyway. So regardless of whether or not it is stricken from the books as far as the salary cap is concerned after the last few years are voided, he still gets all his bonus money.

The point here is that many are taking this restructuring out of context as a "classy" move by Manning to take less money in order to free up money for the Colts to spend elsewhere, which is simply not the case. Now if the scenario you have suggested plays out and he ends up retiring for Indy after ripping up the last few (likely backloaded) years of his contract in favor of one that's more cap-friendly, then that may be more worthy of praise. However, as of yet he hasn't done anything that 99% of players in this league wouldn't do. In fact, this happens on a regular basis with pretty much every team, just usually with lower profile players and less exorbitant amounts of money (how do you think Washington manages to get under the cap every year?).

Oh no... you are absolutely right. Peyton is a good dude, but this isn't why. He isn't losing any money here. People that don't understand the cap, are the ones that don't understand that he isn't taking a paycut. The problem is... even if a player 'wanted' to take a paycut, the union wouldn't allow for it.

My point though was this... (you didn't say it, but some have) is that people are stating that all this does is push money out further, therefore creating a caphell for us later. That is just simply not true. All of our big contracts and even most of our smaller contracts here, have voidable years at the end, specifically for this purpose. Its a form of protection for both the player and the Organization. Bottom line... Peyton is a franchise player. He will retire a Colt. When we void his final years of his contract, he will sign a new 'cap friendly' one to retire on. Alot of people don't like Polian, but there is no denying what a cap managing genius he is.