By releasing quarterback Peyton Manning, the Colts avoided paying Peyton Manning $28 million in cash, as well as carrying a $17 million cap charge in 2012.
Per a source with knowledge of Peyton Manning’s contract, cutting him results in $16 million in dead money.
It comes from the $20 million signing bonus Peyton received in August. With a five-year deal, $4 million was charged to the cap in 2011, and the rest remains.
Because the new league year hasn’t begun, the Colts can’t divide the $16 million over two seasons. Instead, the full $16 million hits their cap in 2012.
UPDATE 5:10 p.m. ET: The contract shows that the Colts absorbed a $5.6 million cap charge in 2011, representing one-fifth of the $28 million option bonus that never was paid. So they’ll get a credit against the $16 million acceleration, making the net cap hit $10.6 million.