On Friday morning, we reported that Peyton Manning’s supposedly “renegotiated” contract resulted in no actual renegotiation. The deal merely was tweaked to reflect that the Broncos had purchased $10 million of insurance, aimed at protecting the Broncos against the possibility of paying Manning $20 million in 2014 for not playing due to a non-neck injury suffered in 2013.
A source with knowledge of the situation has reiterated to PFT that, despite reports elsewhere to the contrary, the deal did not change. However, the NFL’s interpretation of it did.
Manning’s original deal contains a $5 million salary advance of 2013 pay and a $5 million salary advance for 2014 compensation. The league initially didn’t treat the advances as signing bonuses, which gets prorated.
The new deal, which didn’t change the payments or the structure of the deal, prompted the NFL to treat the payments differently. As a result, the league has applied the $10 million in salary advances in $2.5 million equal chunks over the final four years of the contract. The cap numbers for 2013 and 2014 have dropped from $20 million to $17.5 million, and the cap numbers for 2015 and 2016 have jumped from $19 million to $21.5 million.
To illustrate the league’s adjusted valuation of the deal, Manning’s initial contract included a $6 million salary advance in 2012, but the NFL didn’t spread that amount over the five years of the contract when the deal was processed. Instead, the salary advance was included within the $18 million base salary/cap number for 2012.
So the deal in no way changed. But the league’s new treatment of it gives the Broncos some unexpected cap relief in 2013 and 2014.