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Peyton signs new contract, but deal doesn’t change

Peyton AP

At the Scouting Combine in Indianapolis, Broncos executive V.P. of football operations John Elway said he didn’t anticipate asking Peyton Manning to restructure for cap purposes a deal that pays $40 million over the next two seasons, in two $20 million chunks.

But Manning has signed a new deal.  Though it has been disclosed on the league’s official online transaction page as a “renegotiated” contract, a source with knowledge of the situation tells PFT that the new terms don’t alter the compensation in any way.

The contract, according to the source, adds an insurance clause, which reflects that the team has purchased an insurance policy in the event Manning suffers a serious injury.  The insurance would both compensate the Broncos and provide a cap credit in the event Peyton can’t play for any injury other than another injury to his neck.  To get the cap credit, the contract must refer to the insurance policy.

Manning will earn $40 million guaranteed over the next two seasons, in $20 million chunks for 2013 and 2014, respectively.  The Broncos can avoid the $20 million payment in 2014 only if Manning suffers injury to the same area of his neck that kept him from playing in 2011.  If a non-neck injury happens, the Broncos cash in on the policy.

For any other injury or condition, the Broncos are on the hook.  Which means that, barring compelling medical evidence that any new neck injury arises directly from the old neck injury, Peyton is getting $40 million over the next two years.

Which helps explain the motivation to purchase insurance.

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39 Responses to “Peyton signs new contract, but deal doesn’t change”
  1. johnnyjagfan says: May 17, 2013 8:24 AM

    Doubt we’ll be seeing Peyton interviewed on the follow-up to “Broke”.

  2. iamapatsfan says: May 17, 2013 8:26 AM

    Who pays out that kinds of insurance and what are the premiums for 40 mil in two years?

    Or is this just strictly an NFL insurance saying that if he goes under with a neck injury, his cap penalty will be waived by the NFL?

  3. pkrjones says: May 17, 2013 8:30 AM

    With millions of dollars at stake, and cap dollars so extremely tight, why wouldn’t EVERY team take out an insurance policy on their QB’s? Every $50Mil + contract should reference an insurance policy for catastrophic injury. Guessing the policy would cost 5-10% of the contract, but if it can buy cap-relief would be well worth it. What am I missing?

  4. bigwinintx says: May 17, 2013 8:31 AM

    He gets that kind of money because he can deliver…

    Romo on the other hand is a head scratching mystery to the rest of the world.

  5. andrewproughcfe says: May 17, 2013 8:32 AM

    Elway – you need to add some insurance against first-round playoff losses into that contract also.

  6. kwgator says: May 17, 2013 8:43 AM

    Is there a bonus clause for winning a game in January …. for a change?

  7. skoobyfl says: May 17, 2013 8:43 AM

    No more marching down D-TV street for PM.

  8. ejmat2 says: May 17, 2013 8:44 AM

    I guess I don’t understand this. The Broncos agreed to the guaranteed money. I can understand taking out an insurance policy. However, why should that have any affect on their cap situation? They agreed to the terms. Both parties signed the contracts. The NFL approved the contract. They should absolutely be on the hook for $20M in 2013 and 2014.

  9. 4ever19 says: May 17, 2013 8:46 AM

    Peyton Manning – team player all the way. NOT. I am a lifelong Colts fan but I think he was/is way too greedy. He can/could take a little less to help the team. He can just make another car/shoe/cookie commercial to fill the financial hole in his life that would create.

  10. tdravens says: May 17, 2013 8:47 AM

    I hope they didn’t forget to fax it in.

  11. jruc says: May 17, 2013 8:58 AM

    @4ever19 – If I’m not mistaken, I recall him taking paycuts for your team PLENTY of times…

  12. Insomniac says: May 17, 2013 9:01 AM

    How does that not circumvent the cap? The Broncos would both pay Peyton Manning and it wouldn’t count against the cap? Is the cost of the policy also added to the cap?

  13. atthemurph says: May 17, 2013 9:04 AM

    iamapatsfan says:
    May 17, 2013 8:26 AM
    Who pays out that kinds of insurance and what are the premiums for 40 mil in two years?

    Or is this just strictly an NFL insurance saying that if he goes under with a neck injury, his cap penalty will be waived by the NFL?
    ————————————————————

    an insurance company pays out. My guess is Lloyd’s of London.

    What are the premiums? Well, I’m not an actuary and I don’t have any data on the recurrence of this type of injury but I’d guess the premium is into the 6 figures.

    The rules of the cap take into consideration payments made by outside sources, as the article says, if the insurance policy is in the actual players contract.

    I don’t know if the premium for the policy are added to the teams cap hit but it seems that if they get a deduction if the policy pays then the premium should be added to the cap now.

  14. bigjdve says: May 17, 2013 9:18 AM

    I think is good for both sides.

    From the Broncos point of view, they didn’t want to follow the mistakes of most teams, where if their franchise player gets hurt, they are strapped for cash to try and replace them.

    Unfortunately the Colts had to deal with that, so I am not sure why other teams aren’t doing the same thing.

    Regarding the comments about Peyton taking a pay cut, why should he? The team didn’t ask him to, if I remember, there weren’t really any players that were complaining about not being able to get paid, that the Broncos wanted to pay the amounts being asked.

    The closest was Dumervil, and they had a contract for him that he signed but “the agent dropped the ball”. I personally think Dumervil wanted out, so he went to the Ravens for comparable or less than what the Broncos were offering.

  15. browntown57 says: May 17, 2013 9:26 AM

    pkrjones says:
    May 17, 2013 8:30 AM
    With millions of dollars at stake, and cap dollars so extremely tight, why wouldn’t EVERY team take out an insurance policy on their QB’s? Every $50Mil + contract should reference an insurance policy for catastrophic injury. Guessing the policy would cost 5-10% of the contract, but if it can buy cap-relief would be well worth it. What am I missing?

    —–
    I think you’re missing the fact that the article states that it only covers the contract against the preexisting neck injury, not a new injury. Teams can probably buy insurance against a new injury that compensates them financially in the event of a serious injury, but they still wouldn’t get the cap relief.

  16. tobis81 says: May 17, 2013 9:27 AM

    So, basically any player with a LARGER contract who has been injured in the past should be able to have an insurance policy through the league that protects a specific team from having to pay on a contract, and that’s a safety net against a future CAP hit!!! Hmmm, why is it only Peyton Manning, and the Broncos gets that privilage? Every team should be doing it if it saves them a huge hit against the cap if a player gets injured, and lands in IR, etc!

  17. dvdman123 says: May 17, 2013 9:40 AM

    In all honesty what did “Peyton deliver” to the Broncos in 2012? Sure they made the playoffs but the Broncos did so the previous season under Tebow. Heck in 2012 they didn’t even make the conference championship or make it to or win a Super Bowl.

  18. jimmyt says: May 17, 2013 9:40 AM

    I just hope he and Brady retire at the same time so we can watch Brady cry when Peyton gets voted into the HOF, first ballot, unanimously and Brady has to wait a few years because the writers know he is not as good as the cheating during Spygate made him appear to be. It will be sweet.

  19. croghan1919 says: May 17, 2013 9:41 AM

    4ever19?
    Did you see the previous report about PM giving 1/2 mil to the Peyback foundation?
    1/2 mil to the Pat Summitt Foundation?
    Millions to Peyton Mannings Childrens Hospital in Indy?
    I feel confident that Manning gets really close to giving 10% of his income to charity every, that would be $2,000,000.00 the next 2 years of his contract if he stays healthy.
    Do you give 10% of YOUR income to charity?
    If you do, good on ya!
    If you don’t?…. reconsider your own comment about the greedy Manning.

  20. yssupasigninnamnotyep says: May 17, 2013 9:41 AM

    Ridiculous coin for a guy who will never sniff another SuperBowl.

  21. metalhead65 says: May 17, 2013 9:48 AM

    glad you cleared that up because it’s not like he left the colts for the money. and despite all your crying and anger directed at Irsay colts fans,He left the team and you!

  22. eatitfanboy says: May 17, 2013 10:14 AM

    4ever19 says:
    May 17, 2013 8:46 AM
    Peyton Manning – team player all the way. NOT. I am a lifelong Colts fan but I think he was/is way too greedy. He can/could take a little less to help the team.
    =====

    I’m sure if the company you worked for asked you to take a big pay cut, you would be the consummate “team player” and agree immediately.

  23. pdidit09 says: May 17, 2013 10:17 AM

    Good for the Broncos and PM. He has earned every penny he has been given. Why knock Romo, he gets beat up very game, but he is competitive.

  24. wiseguysprep says: May 17, 2013 10:25 AM

    For everyone who said Joe Flacco was overcompensated, Manning career playoff record: 9-11; Flacco playoff record: 9-4. As for playoff victories in Denver, Manning: 0; Tebow: 1.

  25. rlj2170 says: May 17, 2013 10:47 AM

    not true metalhead65..the colts were ready to part with manning in the same way green bay wanted favre out.

  26. azarkhan says: May 17, 2013 10:56 AM

    Peyton Manning give up a dollar? LOL Here’s a man who never met a commercial he didn’t love.

  27. azarkhan says: May 17, 2013 10:59 AM

    croghan1919: “Manning gets really close to giving 10% of his income to charity every year”

    You may continue worshiping St. Manning, but in the real world, it’s called a “tax deduction”.

  28. crappygovernment says: May 17, 2013 11:28 AM

    Why even bother watching in 2013, Broncos Fans? You know it will end with the same tired old choker losing!

  29. crappygovernment says: May 17, 2013 11:29 AM

    That Freemason Elway should bring back Tebow for when greedy Peyton chokes again of breaks down for good! Save your soul, horseface!

  30. greyhawk9 says: May 17, 2013 11:31 AM

    sounds like a certain team might know something about somebody’s neck that we dont….

  31. r8rsfan says: May 17, 2013 11:42 AM

    Manning gives 10% of his income to charity? Is he a mormon?

  32. peytonsneck18 says: May 17, 2013 11:53 AM

    Peyton gets a nice tax deduction from his charities, dont say hes a saint for what he does, hes been the highest paid player since his rookie contract (b4 new cba contract) and his endorsement money from buick, papa johns, etc etc, peyton will never hurt for money, but he has hurt his team cause of his money

  33. steelerberd says: May 17, 2013 12:00 PM

    First off let me say this; a Peyton Manning at 75% health is better than 26-28 other QB’s in the NFL. But the question I have is Why Now? Why Not last year when they signed him? These insurance policies aren’t new. My opinion is at the end of last year Peyton looked tired and fatigued and his arm really didn’t have the zip it normally had. His arm lost some luster due to age, i get it. I can tell you this i believe he threw last year in pain and as the year went on the more it hurt and the less effective it was becoming. I just wonder if Denver knows more than it wants the 31 other teams and the public to know. They really have no backup plan. Manning goes down Denver gets a top 5 pick!

  34. proudliberal85392 says: May 17, 2013 12:23 PM

    Nice work if you can get it..

  35. eeerockski says: May 17, 2013 12:46 PM

    Perhaps hes donating to the Charles Woodson fund?

  36. delashmit says: May 17, 2013 1:33 PM

    Peyton will do anything to help his team. If he gets too injured to play, he will probably waive the money. He does not need the money and he is too smart to be on “Broke.” He does not waste money on “Bling.”

  37. biggil86 says: May 17, 2013 1:42 PM

    croghan1919 says:
    May 17, 2013 9:41 AM
    4ever19?
    Did you see the previous report about PM giving 1/2 mil to the Peyback foundation?
    1/2 mil to the Pat Summitt Foundation?
    Millions to Peyton Mannings Childrens Hospital in Indy?
    I feel confident that Manning gets really close to giving 10% of his income to charity every, that would be $2,000,000.00 the next 2 years of his contract if he stays healthy.
    Do you give 10% of YOUR income to charity?
    If you do, good on ya!
    If you don’t?…. reconsider your own comment about the greedy Manning.

    ____

    10% of his income would be $2m EACH OF the next 2 years of his contract (the way you worded it makes it sound like you believe he’ll give $2m out of this and next years contract which is $40m, $2m of which would be 5%)

    Also his “income” includes all his sponsorships and endorsement deals. All-in-all he probably doesn’t give nearly 10% of his total income (both for football and endorsements, and any other businesses he may run) to charity, but he does give significant amounts for good causes.

    Add to that that “greedy” used in this context is a subjective term, and it’s a conversation of hair-splitting.

  38. biggil86 says: May 17, 2013 1:56 PM

    browntown57 says:
    May 17, 2013 9:26 AM
    pkrjones says:
    May 17, 2013 8:30 AM
    With millions of dollars at stake, and cap dollars so extremely tight, why wouldn’t EVERY team take out an insurance policy on their QB’s? Every $50Mil + contract should reference an insurance policy for catastrophic injury. Guessing the policy would cost 5-10% of the contract, but if it can buy cap-relief would be well worth it. What am I missing?

    —–
    I think you’re missing the fact that the article states that it only covers the contract against the preexisting neck injury, not a new injury. Teams can probably buy insurance against a new injury that compensates them financially in the event of a serious injury, but they still wouldn’t get the cap relief.

    __________

    I think you’re missing the fact that the article states “The insurance would both compensate the Broncos and provide a cap credit in the event Peyton can’t play for any injury OTHER THAN another injury to his neck. ” [emphasis added].

    And: “If a non-neck injury happens, the Broncos cash in on the policy.”

    “The Broncos can avoid the $20 million payment in 2014 only if Manning suffers injury to the same area of his neck that kept him from playing in 2011.” has nothing to do with the insurance policy itself; it is a different codicil in his contract. The $20m he’s set to receive in 2014 is guaranteed unless he reinjures his neck in the same area; were this to happen Peyton doesn’t get any of this money.

    The insurance that just got added stipulates that if Peyton incurs an injury someplace OTHER THAN his neck, the Broncos can cash in the policy, which would provide some cap relief to the Broncos; however, Peyton would still get the $20m.

    In short:
    Peyton injures his neck; no $20m for him, Broncos are relieved $20m in cap (according to the contract itself)

    Peyton injures something other than his neck; he still gets the $20m, but Broncos can cash in the insurance policy and receive some payout and cap relief (according to the insurance just added and incorporated into the contract).

  39. sportsnut101 says: May 17, 2013 3:29 PM

    Maybe the contract should be on based on play. Cuz he no better then mark Sanchez in playoffs. Even tebow is .500 in playoffs

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