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It’s a surprisingly simple deal, based on a review of the information and communications with a source having direct knowledge of the negotiation process. Manning gets an $18 million fully guaranteed base salary for 2012. Though he doesn’t get a signing bonus, he’ll receive $6 million of the $18 million base salary as an advance.
Then, if Manning is on the Broncos’ roster on the final day of the 2012 league year, his base salaries of $20 million in 2013 and $20 million in 2014 become fully guaranteed.
In other words, the Broncos can cut Manning at any point after Super Bowl XLVII and before the last day before the start of the 2013 league year and limit the contract to a one-year, $18 million investment. And so, just as the Colts faced a $28 million decision in March 2012, the Broncos will face a $40 million decision in March of 2013.
That said, there’s a limited out for the 2014 base salary, for one specific reason. If, during the 2013 season, Manning suffers another injury to his neck, the Broncos will be off the hook for the $20 million in 2014. If Manning suffers an injury, regardless of severity, to any other area of his body, he still gets the $20 million in 2014.
Then, if Manning is on the roster on the final day of the 2014 league year (which will occur in February or March of 2015), his base salary of $19 million in 2015 will become fully guaranteed.
Finally, if Manning is on the roster for the final day of the 2015 league year (which will occur in February or March of 2016), his base salary of $19 million for 2016 will be fully guaranteed.
It’s that simple. The Broncos have the unilateral right to drop Manning before the end of the 2012, 2014, or 2015 league year and avoid the remaining $78 million, $38 million, or $19 million, respectively. And if Manning suffers another neck injury during the 2013 season, the deal can be capped at two years and $38 million
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