Colts over cap by $6M

[Miguel]

But, you had said make the options for tacking on additional years at the end of the contract.

You can't make the options be for adding years in the 2006-2012 time frame because he's already under contract for those years (hence no club "option").

I said that the Colts could add this year an option for the 2013 season, in 2007 an option for the 2014 season.

If there is no CBA extension, the Colts may need the $6.75 million in cap savings to get under the cap. If there is no CBA extension, then it is very likely that 2007 will be uncapped so it does not matter if Manning's 2007 renumeration would be much lower than it is now because I am sure that the Colts would just release Manning in 2007 ending his contract and the 30% limitation with it. The Colts will then do a new deal in 2007. If there is a CBA extension, they will probably not need that much savings.

As for submitting an illegal contract to the NFLPA, teams do it all the time, even the Patriots. Remember that the NFLPA made the Patriots redo Brady's contract before they finally approved it.

 

[MoLewisrocks]

I do not know why the Colts are looking for an injuction.

If I were them, I would change the 2006 roster bonus into an option bonus for the 2013 season, the 2007 roster bonus into an option bonus for the 2014 season. Sure, Manning's 2008 renumeration would be lowered.

Can you tie an option to a year that is 2 years after the player has already become a FA? Remember, his initial contract was for 9 years thru 2012 but it voided those last two years automatically after he reached certain playing incentives in the first season. So Peyton is a FA after 2010. You think he's going to give those years back for nothing but salary he may never see?

Given what they would have to do to all his double digit salaries in 2008-2010 and beyond, no way Tom Condon devalues that contract without substantial quid pro quo - let alone extends it. He already/only has them over a barrel for a substantial restructure in 2008-2009 because of existing bonus over those double digit salaries. Loose those double digit salaries and he looses leverage. And leverage (potential $18M franchise tag cap hit in 2004) is how he got this deal to begin with.

 

[Miguel]

Can you tie an option to a year that is 2 years after the player has already become a FA? Remember, his initial contract was for 9 years thru 2012 but it voided those last two years automatically after he reached certain playing incentives in the first season. So Peyton is a FA after 2010.

So change my proposal for the 2011 and 2012 seasons.

You think he's going to give those years back for nothing but salary he may never see?

Why not. It is not like that he was really ever going to get big money those years.

Given what they would have to do to all his double digit salaries in 2008-2010 and beyond, no way Tom Condon devalues that contract without substantial quid pro quo - let alone extends it.

We will have to agree to disagree on this. I happen to think that the rather large numbers in Manning's contract were used to puff up the value of Manning's contract.
[/quote]

He already/only has them over a barrel for a substantial restructure in 2008-2009 because of existing bonus over those double digit salaries.

It is precisely because of those double-digit salaries in 2008/2009 that Condon should do this deal. He needs further signing bonus proration to protect the salaries.

IMO, he does not have the Colts over the barrel. Right now, his 2008 cap number is $15.2 million. Right now, after the 2007 season there would be $7.5 million in signing bonus proration left on Manning's deal so the Colts would save $7.7 million by releasing Manning in February,2008. Do my deal and then the cap savings are lowered by $2.25 million.

Loose those double digit salaries and he looses leverage. And leverage (potential $18M franchise tag cap hit in 2004) is how he got this deal to begin with.

A player has leverage over a team in 2 ways.
1.)He is going to be an UFA and he is an integral part of the team's success.
That happened in 2004.
2.) It costs more money to release a player than to keep the player.

 

[hwc]

I said that the Colts could add this year an option for the 2013 season, in 2007 an option for the 2014 season.

I understood. That's why I asked why Manning would agree to that.

Look at it this way:

Under the current contract, Manning has roster bonuses due to him in 2006 and 2007. Technically, the Colts don't have to pay those roster bonuses, but the cap pain of cutting Manning means that he will get his money.

You are saying get rid of those roster bonuses and replace them with option bonuses in the same amount. Pay the $9 million option bonus in 2006 and the Colts extend Manning's contract one year (when he is 37 years old). Pay the $10 million option bonus in 2007 and extend one more year (when Manning is 38). Don't pay the options and the Colts still have him under contract until he is 36. The Colts would have to be insane to pay $19 million in option bonuses in 2006/2007 to add two years to the deal when the guy will be 37+ years old, and for all we know, may have had reconstructive knee surgey and a torn rotator cuff.

Manning would never agree to converting those roster bonuses to option bonuses under those terms. He'd never see the $19 million, because the Colts would be giving up essentially nothing by not paying the options. The Colts could make verbal commitments to Manning, but those would be specifically in violation of the CBA.

 

[hwc]

Can you tie an option to a year that is 2 years after the player has already become a FA? Remember, his initial contract was for 9 years thru 2012 but it voided those last two years automatically after he reached certain playing incentives in the first season. So Peyton is a FA after 2010.

That's what I thought. But, the NFLPA is still showing salary numbers for Manning for 2011 and 2012.

Perhaps they are voidable years, but Manning has not actually voided them?

 

[Miguel]

.He'd never see the $19 million, because the Colts would be giving up essentially nothing by not paying the options.

Huh, he would see $9 million within a week of the deal and by doing the deal he makes it more expensive for the Colts to cut him in 2007 thereby increasing his chances of seeing the $10 million.

 

[Miguel]

The Colts would have to be insane to pay $19 million in option bonuses in 2006/2007 to add two years to the deal when the guy will be 37+ years old.

It looks like that the Colts are going to pay him the $19 million. So why does it really matter if it is in an option bonus or a roster bonus??? Adding years to the contract does not mean that the Colts will actually pay Manning for those years. As it stands right now, it would not cost the Colts anything to release him after the 2009 season.

 

[hwc]

Why would he see $9 million within a week of the deal? If the Colts don't pay it, they still have him under contract through 2012. If they pay it, all they get is an additional year (thru 2013). They would be stupid to pay him $9 million for that.

Now, they can promise him that they will pay it next week (with a wink and a nod). But, that kind of representation is specifically prohibited by the CBA.

It may look like the Colts will pay it. But, why on earth would Condon allow Manning to agree to something, knowing that Polian could wake up in the middle of the night next week and say, "Wait a minute...it doesn't cost me anything to not pay that $9 million to Peyton". Talk about easy cap relief. Just don't exercise the option. Condon isn't going to bite on that and leave his client exposed to that risk.

BTW, I agree with you that it is in Condon's interest to get the $19 million in upcoming roster bonuses prorated and on the books as potential dead money hits down the road. However, I don't think the mechanism of simple option bonuses for one addition year each would be attractive to Manning.

 

[Miguel]

Why would he see $9 million within a week of the deal? If the Colts don't pay it, they still have him under contract through 2012. If they pay it, all they get is an additional year (thru 2013). They would be stupid to pay him $9 million for that.

Now, they can promise him that they will pay it next week (with a wink and a nod). But, that kind of representation is specifically prohibited by the CBA.

It may look like the Colts will pay it. But, why on earth would Condon allow Manning to agree to something, knowing that Polian could wake up in the middle of the night next week and say, "Wait a minute...it doesn't cost me anything to not pay that $9 million to Peyton". Talk about easy cap relief. Just don't exercise the option. Condon isn't going to bite on that and leave his client exposed to that risk.

I would expect that Condon would first have future salaries guaranteed. Then when the option is exercised a week later those guarantees are pulled. It would then cost the Colts money not to exercise the option. See the contracts of Brady and Dillon for examples.

 

[AdamJT13]

How would they get Manning to agree to that? The Colts could simply not excercise the options, Manning would be out $19 million in bonus money and all the Colts would give up is having him under contract in the option years when he will be 37 and 38 years old.

Option bonuses almost always are "protected" by either large, guaranteed salaries or a "non-exercise fee." Manning's contract probably would say that if the Colts don't exercise the option, his base salaries become $10 million guaranteed, $11 million guaranteed, etc., giving him the same amount of money but much higher cap numbers. Then the Colts would be sure to exercise the option.

 

[AdamJT13]

I do not understand Vick's contract. On the surface, the numbers look like his restructure this week would have triggered 30% rule problems. So, either that contract is going to get shot down by the league or there are numbers in that contract that we don't know about.

Contrary to what has been reported, the Falcons didn't guarantee all of Vick's roster bonus. They guaranteed $3.4 million, prorating it at $850,000 per season. The other $3.6 million remains a roster bonus, and his contract does comply with the 30 percent rule.

 

[arrellbee]

I must be out to lunch.

It looks to me like Peyton's base salary cap is 1M salary plus 2.84 previous bonus plus 4.93 (7 yr) extension signing bonus for a total of 8.77. This seems to make sense because the figure being reported with a 9M roster bonus is 17.766. What doesn't make sense first of all is that it is stated that if the Colts could have converted to a signing bonus his cap would be 10M. It looks to me like it would have been 11M.

I'm also not understanding what it is that is done to replace a signing bonus with an option bonus as far as cap number for this year. I guess the proposal is that the 9M gets split into two option bonuses (1 this year and one next year) ?? and that presumes Manning/Condon agree to the change (I read the reasoning why they might be willing). Is it an equal split 4.5M each year ? And doesn't this year's option bonus have to be amortized over 4 years and count as far as meeting the 30% rule ? Does that work for the 30% rule ? If I read the CBA correctly (it was quoted in an earlier post in this thread also) the option must be considered under the 30% rule.

Apologies for being a little slow on the uptake here.

 

[hwc]

Adam and Miguel:

Yes. Protecting the option bonuses would be essential. How long would they "pro-rate" the 2007 option bonus for in the cap calculations? Not at all? over three years? over the life of the contract? I can't find any concrete justification in the CBA for any number when dealing with a bonus paid in an uncapped year.

Makes sense on the Vick thing. The Colts could pick up a million or so doing it that way with Manning's contract too. They have room to convert a little bit of his roster bonus to signing bonus. But, knowing them, I sure they would prefer to backload the deal as much as humanly possible. The cap numbers down the road from the twin option bonus approach are staggering. I was looking at those when I ran into the question of how long to prorate the 2007 bonus. In looking at the spreadsheet, it also occurred to me that additional pro-ration could trigger additional Deon-rule adjustments, but my head hurt too much to pursue that question!

Arrellbee: Manning has two roster bonuses upcoming. A $9 million bonus this year and a $10 million bonus next year -- with base salaries of $1 million each year.

It's the back to back roster bonuses that are causing them grief on the 30% rule. Right now, both bonuses count as salary in calculating the 30% rule. But, convert the first one to signing bonus and Manning's salary drops to $1 million and can only legally increase by $333,000 in any of the next three years. But, wait...it's already $11 million for 2007. So, now, you have to convert the 2007 bonus, too....but then you are up against his $11.5 million base salary in 2008. The 30% rule is killing the Colts...that's why they are holding their breath, turning blue, appealing the league ruling to the Special Master, and threatening to sue when the Special Master upholds the league ruling.

 

[coltsfan]

I'm impressed with you guys' knowledge of the salary cap, and I am really learning a lot about the salary cap in this thread.

My question to Miguel and any others is if they decide to do the restructure where the make it two option bonuses, would it guarantee the salaries in 2013 and 2014? It may be an obvious answer, but I'm not too familiar with the way these option bonuses work.

 

[hwc]

My question to Miguel and any others is if they decide to do the restructure where the make it two option bonuses, would it guarantee the salaries in 2013 and 2014?.

No. There is no reason that a option bonus for an additional year would have to involve guaranteeing those years. It would require putting in salary numbers for those years -- but those would be dummy numbers anyway. It is highly unlikely that Manning will still be playing at age 38 -- unless the Colts have backloaded his deals so heavily that they can't afford the cap hit of his retiring. That's why Testaverde was still on the Jets roster at age 83.

 

[coltsfan]

The Colts are supposedly a have not, yet if you look at the reported flash point issue going into yesterday's extension, cash over cap was the rallying cry of the small market teams. Oddly Polian is piling up cash over cap at an alarming rate this week. Why? Because he's already committed the Colts to shelling out $40M in bonus money for 2006 that he thought would only count as $8M. And because when Polian wants to pile up cash over cap to suit his purposes (as he did in 2004 when his payroll balooned to $108M vs. the Patriots $92M) it's not a problem.

I can understand how another team's fan can say what you said about Polian, but I'm not sure what your point is here. The Colts had to hold off on giving Manning his big contract for years because they didn't have the money. When they got the stadium deal done, they were able to give him the extension. But before that they were forced to hold abnormally high cap numbers on him because he met all of his incentives and they didn't have the cash to pay him the big bucks to lower the number.

The fact that the Colts now have a high payroll is because they have a lot of high salary guys getting bonuses in the same year. If the CBA gets done, they may have two more within the next few months in James and Freeney. It says nothing though about whether they are a have or a have not. The Colts are now better off than they were before with the stadium deal, but I'd still doubt they are on the same field as the high level teams. Still, I don't think they'll be in the position anymore as they were with Manning for a few years.

 

[coltsfan]

No. There is no reason that a option bonus for an additional year would have to involve guaranteeing those years. It would require putting in salary numbers for those years -- but those would be dummy numbers anyway. It is highly unlikely that Manning will still be playing at age 38 -- unless the Colts have backloaded his deals so heavily that they can't afford the cap hit of his retiring. That's why Testaverde was still on the Jets roster at age 83.

Good, I'm glad they won't have to guarantee those years. Even moreso with Harrison, where it would be much more burdensome with his age.

Hopefully Miguel is right and this is something that can save the Colts here. Who would have thought a Patriot fan would have me feeling so much better!

 

[hwc]

Hopefully Miguel is right and this is something that can save the Colts here.

Oh, Miguel is definitely right. There are ways to squeeze some cap dollars out of the Manning and Harrison deals by using option bonuses. You aren't going to like the cap hits down the road, but the Colts have no choice. By spending like drunken sailors on their offense, they've put themselves in a very bad situation if the league doesn't bail them out with a CBA extension. Think about it. The cap has already increased $10 million over last year and the Colts can't get down to the cap? Maybe they should have thought about that before doing the Wayne deal last week.

 

[hwc]

The Colts had to hold off on giving Manning his big contract for years because they didn't have the money.

Baloney. The Colts franchise is worth $700 million. Are you telling me that Irsay couldn't raise the money to do Manning's contract whenver he wanted?

What really galls me more than anything is that Irsay actually used a $10 million payment from the city of Indianapolis to help fund Manning's bonus payments. Meanwhile, Irsay has the nerve to attack the "big revenue teams" that are building their own stadiums, doing internet webcasting, and paying a ton of money to marketing people to grow the sport. Irsay cries poor and threatens to sue the league at the very same time he is paying ridiculous money to a number two wide receiver. What does that do to the 31 other owners who also have to sign #2 wide receivers and don't feel like paying Jerry Rice money to David Givens or Randal El?

That's OK. I think Kraft and many other owners see a perfect opportunity to stick it to the Synders and Polians of the league this weekend and I think they fully intend to do so.

 

[coltsfan]

One more question (or set of questions). So does the option bonus differ in any way from a signing bonus besides adding dummy years to the contract? Weren't you only able to amortize bonuses only seven years anyway? So would their cap numbers in the future be any different if we gave them option bonuses versus signing bonuses?