The much-discussed $28 million option bonus that the Colts owe Peyton Manning can be paid, under the express terms of his contract, at any point between the second day after Super Bowl XLVI and “fourth day before the end” of the 2011 league year.
It is commonly believed that, as a result, the Colts will cut Manning on or before March 8, in order to avoid paying him another $28 million to go along with the $26 million he earned as a coaching apprentice in 2011.
But, as Jason La Canfora of NFL.com points out and as I have confirmed by looking at the contract that has been right in front of my freaking face for months, the so-called “non-exercise fee” is affirmatively earned the “second day before the end” of the 2011 league year. In English, this means that the Colts won’t definitely owe Peyton Manning another $28 million until the “second day before the end” of the 2011 league year.
It also means the Colts can drag this thing out a little bit longer, if the Colts choose to do so.
The challenge then becomes to figure out with complete certainty the “second day before the end” of the 2011 league year. I’ve spoken with league spokesman Greg Aiello (who sounded very relieved that I wasn’t asking a bounty-related question), and he said that the 2011 league year ends at 3:59:59 p.m. on Tuesday, March 13. (He also pointed out that, for matters of this nature, teams and agents don’t use specific dates because no one knows with certainty at the time contracts are signed when a future league year will end and a new one will begin.)
La Canfora writes, without equivocation, that the Colts have until Sunday to cut Manning and avoid owing him $28 million. I wouldn’t recommend waiting that long, if the Colts indeed intend to cut Manning. With the 2011 league year ending on Tuesday, March 13, the first day before the end of the 2011 league year is Monday, March 12 — and the second day before the end of the 2011 league year is Sunday, March 11. Given that the contract says that the $28 million non-exercise fee is actually “earned” on the second day before the end of the 2011 league year, the Colts should make damn sure Manning is off the roster before the clock strikes 12 on Saturday night.
One of the (few) things I learned while practicing law was the importance of deadlines, and the best strategy for honoring deadline is to figure out the earliest that an adversary could reasonable claim the deadline applies, and then to do whatever needs to be done before that earliest possible deadline moment comes.
If the Colts wait until Sunday to cut Manning, they very well may end up giving him a $28 million parting gift. That’s why they shouldn’t wait until Sunday.
Frankly, unless there truly is a meaningful effort to negotiate a new contract with Manning that would replace his current deal, the Colts shouldn’t take any chances. They should just cut him now.
They can then try to re-sign him. They could even invite him to come in and throw for them as a free agent, something they irrationally believe they can’t do while he’s under contract. Even though at that point the Colts would be competing with other teams, they won’t be playing a $28 million hybrid of “beat the clock” and Russian roulette.
UPDATE 10:10 a.m. ET: Lost in the analysis of Peyton’s contract is that business can’t be transacted in most offseason weekends, including this one. Thus, if Peyton isn’t off the roster by 4:00 p.m. ET on Friday, he’ll be on the roster as of Monday morning — and he’ll be owed $28 million.