(I’d be a lot more productive if I simply flagged the questions and didn’t spend time trying to answer them.)
Typically, there are two types of restructurings. The so-called “simple” restructuring entails taking a large chunk of the player’s salary for the next season and converting it to a signing bonus, which spreads the cap hit over multiple years. For example, a player with $13 million in salary and four years left on his contract can take $12 million now, dropping the current cap charge to $4 million and pushing $9 million the final three years of the deal.
Another type of restructuring entails reducing the compensation to be earned. For example, a player with a $13 million salary can create $5 million in cap space by reducing his salary to $8 million. (#math.)
For the Broncos and Manning, it’s unclear what kind of “restructuring” they’re discussing. With only two years left on his contract, a “simple” restructuring has limited value. If, for example, the Broncos were to convert $10 million of Manning’s base salary to a signing bonus, his cap number for 2015 would drop by $5 million — with the other $5 million hitting the books in 2016. Which would drive up his cap number in 2016 from $21.5 million to $26.5 million.
It makes more sense if 2015 will be his final year with the team. If a Derek Jeter-style PFM Farewell Tour is coming, pushing $5 million to next year but avoiding Manning’s $19 million salary for 2016 results in a cap charge after 2015 of only $7.5 million.
It’s also possible that the Broncos and Manning would extend the contract to allow for the chunk of salary he receives as a signing bonus to be spread over more years. That would result in greater cap savings for 2015, but the full remaining amount of prorated bonus money would hit the books next year, if he retires.
Then there’s the restructuring-by-reducing strategy. At a time when plenty of Broncos fans think Peyton isn’t worth the full $19 million, he could earn some goodwill for his Denver-area munchies-alleviation businesses by simply giving back some salary. While he’s never been wired to take less (and he has every right to take that approach), any decision to take less from the Broncos could mean that his agent has gauged the market and learned that no one else will pay Peyton $19 million for 2015.
Either way, the fact that the Broncos and Manning are talking about a restructuring doesn’t yet mean Peyton should be praised for doing the team a favor. But it does mean that the Broncos and Manning are actively looking for a way to continue their relationship for a fourth season.