Understanding Peyton Manning’s Contract Restructure

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May 20th, 2013 by Michael Ginnitti

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With a bit of confusion in the past week over some unexpected news from Denver that Peyton Manning had restructured his deal, we wanted to breakdown the details of exactly what happened, as has been reported by Mike Florio at ProFootballTalk.

Prior to the restructure, Manning had a VERY basic contract of just large base salaries:

 

Screen Shot 2013-05-20 at 8.02.01 AM

Manning’s Contract Breakdown Prior to Restructure

 

With the restructure, Manning has received a $10 million salary advance, that draws $5 million each from 2013 and 2014. This $10 million is converted into an OATSB (Other Amount Treated as Signing Bonus), that pro-rates over the remaining four years of the contract, at $2.5 million per year. The restructured contract now breaks down like such:

 

Screen Shot 2013-05-20 at 8.08.52 AM

Manning’s Restructured Contract Breakdown

 

So while it’s correct in saying that financially speaking Manning’s contract and compensation has not changed, from a salary cap standpoint, the Broncos have actually saved $2.5M in cap space for 2013 and 2014.

Additionally, the implementation of a OATSB now adds “dead money” to the 4 remaining years of the deal, something the original deal didn’t include. Note: Dead money is money the team will accumulate against their salary cap by releasing the player.

The move drops Peyton’s 2013 cap hit to $17.5M, still the top figure on the Broncos (Champ Bailey, $11M), and the 3rd highest among active quarterbacks this year.

 

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