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Report: Eli reworks contract, saves Giants $6.75M

Posted on: March 8, 2012 3:08 pm
 
Eli's restructured his deal to help the Giants make another run. (Getty Images)
By Will Brinson

We've spent most of the past week talking about Peyton Manning, but his little brother Eli Manning -- you know, the one who just won a Super Bowl -- deserves some love too. Especially since he just reportedly restructured his contract to save the Giants some room under the salary cap.

According to Paul Schwartz of the New York Post, Eli made changes to his contract that will get him more money immediately and lower his salary for 2012.

Originally, Manning stood to make $10.75 million in 2012. Under the new restructured terms, his salary will be just $1.75 million, though he pockets $9 million right now. (Decent payday, and well worth the money.)

That means the Giants will receive $6.75 million in cap relief for 2012. Manning's contract for 2013, 2014 and 2015 remains unchanged: he'll still make $13 million, $15.15 million and $17.5 million, respectively.

It's a wise move for both sides. Manning gets a big cash payment, the Giants get more room (they were one of the more salary-soaked teams in the NFL) and Eli allows the Giants to try and keep valuable pieces around him, as they look to re-load and make another run at a title.

Here's an interesting additional twist, courtesy of Mike Florio of Pro Football Talk: because Peyton and Eli are now making significantly less than they were a week ago for 2012, recently-franchised Saints quarterback Drew Brees could see his franchise-tag value take a serious dip. Obviously that could change depending on how much Peyton signs for whenever he signs, but for now, it's just another reason for Brees to be less than thrilled.

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Comments

Since: Mar 8, 2012
Posted on: March 8, 2012 5:17 pm
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Since: May 17, 2008
Posted on: March 8, 2012 5:06 pm
 

Report: Eli reworks contract, saves Giants $6.75M

If Eli takes 9 mil upfront as a lump some then more taxes will come out of the lump some then would be taken out if he was given that same excat salary broken down over 17 weeks.

Plus the tax rate, what is withheld, is based on an annual rate.  Not weekly.  So if he was to make $10.75million in salary over 17 weeks and, instead, he makes $9million today and then $1.75 million over 17 weeks -- either way his income was the same $10.75million and, over a years time, the withholding is the same whether he is paid $632, 352.90/wk for 17 weeks or $9,000, 000 up front and then $102,941.20 per week for 17 wks.  Again, the difference is he gets the $9mill to spend or invest now instead of over a 17 wk period beginning in week 1 of the NFL season.  Consider that just 5% annual  interest on $9,000,000 is about $37,500 per month -- so between now and say mid-september when NFL checks start, he could, putting aside the issue of taxes for now, be able to make at least $243,750 in that time alone that he would not have made if he did not rework his contract.  Quite the personal sacrifice!



Since: May 17, 2008
Posted on: March 8, 2012 4:56 pm
 

Report: Eli reworks contract, saves Giants $6.75M

If Eli takes 9 mil upfront as a lump some then more taxes will come out of the lump some then would be taken out if he was given that same excat salary broken down over 17 weeks. So Eli is sacrificing a percentage of his money (how ever significant that extra percentage is) to free up money for the Giants to sign other players.

Not really -- as someone else pointed out, guys like Eli are already in the top tax bracket so taking the $9million now or later makes very little, if any, difference in his taxes.  Even if that were not true, remember that $9million today is worth a lot more, unless you invest like a moron, than $9million received over the next several years as Manning can start earning interest on all $9mil now, rather than bit by bit over several years, at even a nominal rate of 5% a year that is quite a bit of money -- more than makes up for any tax consequence.  Plus, converting salary, which is not guaranteed, to signing bonus, which is guaranteed, also provides some "insurance" as he knows he is going to get the money and no risk of injury or declining play (however unlikely) causing the Giants to release him in a year as being "over paid".  I am not saying its not a nice thing, or a good thing, to do to save the team some cap room but it is not some great personal sacrifice when a player does this -- they still get their money, they get it faster, its guaranteed bonus instead of non-guaranteed salary and, presumably, they get to play for a better team because the team can afford to sign better players around him.



Since: Jun 22, 2010
Posted on: March 8, 2012 4:56 pm
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Since: Mar 5, 2011
Posted on: March 8, 2012 4:31 pm
 

Report: Eli reworks contract, saves Giants $6.75M

I'm confused, why on earth wouldnt every team do this, its a win-win for the player and team, eli gets the same amount and most of it now instead of waiting till next year, and the team saves a ton in cap room, and yeah, its pretty funny how they make is seem like Eli is sacrificing soemthing, and i'm a huge giants and Eli fan, but i just dont see the sacrifice or why it isnt done all the time.  Well, anyways, Super Bowl champs, baby!!!



Since: Jul 31, 2009
Posted on: March 8, 2012 4:22 pm
 

Report: Eli reworks contract, saves Giants $6.75M

What is there not to understand??? You guys pay taxes right?? If Eli takes 9 mil upfront as a lump some then more taxes will come out of the lump some then would be taken out if he was given that same excat salary broken down over 17 weeks. So Eli is sacrificing a percentage of his money (how ever significant that extra percentage is) to free up money for the Giants to sign other players.

Uh, how do you figure?  Any way he takes that money, he is going to be in the top tax bracket.  So whether he takes $10.75 million over 17 weeks, or $9 million now, and the other $1.75 over 17 weeks, the tax bracket will remain exactly the same. 

In other words, you are mistaken, Eli is not sacrificing anything.  He is getting the exact same amount of money from the Giants over the 2012 tax year, and since that amount is well over the threshold for the top tax bracket, he will be paying the same amount of taxes.



Since: Sep 14, 2006
Posted on: March 8, 2012 3:59 pm
 

Report: Eli reworks contract, saves Giants $6.75M

way to go eli....get #3 and 1 for the thumb!!!



Since: Sep 21, 2011
Posted on: March 8, 2012 3:59 pm
 

Report: Eli reworks contract, saves Giants $6.75M

What is there not to understand??? You guys pay taxes right?? If Eli takes 9 mil upfront as a lump some then more taxes will come out of the lump some then would be taken out if he was given that same excat salary broken down over 17 weeks. So Eli is sacrificing a percentage of his money (how ever significant that extra percentage is) to free up money for the Giants to sign other players.



Since: Jan 3, 2007
Posted on: March 8, 2012 3:46 pm
 

Report: Eli reworks contract, saves Giants $6.75M

I hear ya GoPack...what the hell is so special about this "act of generosity"?!?  I also agree with the poster below about Drew Brees...quit whining Drew, you're a millionaire for playing a kid's game...such an insult to be given the "Franchise" Tag (sarcasm). 



Since: Jan 26, 2011
Posted on: March 8, 2012 3:43 pm
 

Report: Eli reworks contract, saves Giants $6.75M

wow what a huge sacrifice for Eli... *rolls eyes*


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