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What are the cap ramifications if Giants move on from Eli Manning?

Cutting or trading Manning would come with a cost

NFL: Washington Redskins at New York Giants Noah K. Murray-USA TODAY Sports

When Dave Gettleman was announced as the new general manager of the New York Giants, one of the many questions that came up during his press conference involved franchise quarterback Eli Manning and his future with the team.

“Listen, Eli has won a lot of games. He’s a great competitor,” Gettleman said.

“He’s very intelligent, and he and I are going to talk. If what I saw (against) Philadelphia was not a mirage — and I don’t believe it was — then we’ll just keep moving.”

With the Giants currently holding the No. 2 pick in the 2018 draft, there has been some speculation as to whether they will continue to carry his contract.

According to figures obtained via Over the Cap, Manning’s $22.2 million cap figure in 2018 consists of $10.5 million base salary, a $6.2 million prorated signing bonus, a $5 million roster bonus and a $500,000 workout bonus.

Manning’s cap figure alone accounts for an estimated 12.5 percent of the Giants 2018 salary cap based on the projected Top 51 highest salaries, which as of March 14, the start of the new league year, are the only salaries that are going to count against the team’s cap.

Let’s look at some of the financial ramifications, including how the Giants could potentially afford to keep Manning if they choose to.

Pre-June 1 cut: $9.8 million savings

If the Giants were to cut Manning before June 1 and before he has a chance to earn his $500,000 workout bonus, they would save $9.6 million.

However, the Giants would also be hit with a $12.4 million dead money cap charge as the remaining prorated portion of Manning’s signing bonus ($6.2 million per year) would accelerate into the team’s 2018 cap. That’s money that cannot be spent on any other players.

Post-June 1 cut: $16 million savings

If the Giants were to cut Manning and designate him as a post-June 1 cut, that would certainly alleviate some of the financial strain in the dead money column.

Such a move (which by the way doesn’t have to be done after June 1, but which must be designated by the Giants as a post-June 1 transaction accordingly), would increase the cap savings to $16 million with a dead money cap hit of $6.2 million.

There are two other caveats, though. First, the remaining part of Manning’s signing bonus ($6.2 million) would hit their 2019 cap.

Secondly, the Giants wouldn’t receive the savings until — you guessed it — June 1, which means that if they wanted to use the savings to land a big-fish free agent, they couldn’t.

Trade: $9.8 million savings

If the Giants were to find a trade partner for Manning, the new team would assume the financial ramifications for his base salary and his workout bonus (depending on when the trade was to be executed).

However, the Giants would still be on the hook for the $12.4 million prorated signing bonus that accelerates into their 2018 cap.

Also, depending on when the trade was executed, the Giants could be on the hook for other things such as that $5 million roster bonus due to Manning on the third day of the 2018 league year.

The likely option: Rework Manning’s contract

Assuming that Manning is agreeable to reworking his contract, his 2018 cap hit needs to come down.

My proposal would be to turn the $5 million roster bonus that’s due by the fifth day of the 2018 league year and some of his $10.5 million base salary into a signing bonus that can be prorated over the remaining years on the contract. This new guaranteed money plus guaranteeing the reduced base salary would hopefully be enough incentive to get Manning to agree to a restructure.

I would then tack on another year to his contract so that the money that’s being converted into a signing bonus is spread out over three years instead of two which would lessen the cap hit if they move on from him in 2019.

Here is an example:

Sample Eli Manning Contract Restructure

Year 2018 2019 2020
Year 2018 2019 2020
Original Cap Hit $22,200,000 $23,200,000 N/A
Base Salary $3,000,000 $11,500,000 $1,045,000
Prorated Signing Bonus (from Original Extension) $6,200,000 $6,200,000 N/A
Additional Prorated Signing Bonus $12.5M) $4,160,000 $4,160,000 $4,160,000
Workout Bonus $500,000 $500,000 $500,000
Other N/A $5,000,000 $5,000,000
Total Cap Hit $13,860,000 $27,360,000 $10,705,000
Dead Money (pre-June 1) N/A $14,520,000 $4,160,000
Dead Money (post-June 1) N/A $10,360,000 $4,160,000

In this example, Manning’s 2018 base salary of $10.5 million was lowered to $3 million, more than double the $1.015 million minimum salary for players who have at least 10 years of experience as Manning has.

In addition to having his $3 million base salary fully guaranteed, his $5 million roster bonus and the $7.5 million shaved off his 2018 base salary would be rolled up into a signing bonus (another form of guaranteed money) which can be spread over the life of the remaining contract.

To make this easier on the books, an extra year (2020) would be added onto the contract.

Manning’s original prorated signing bonus, $6.2 million, can’t be touched. In calculating all the new totals, his cap hit in this example drops from $22.2 million to $13.86 million, a $8.34 million difference for 2018 with no dead money hitting the 2018 books.

What about 2019?

In my example, if the Giants were to part with Manning in 2019, his potential dead money in that league year rises from $6.2 million to $10.36 million, which would be a heavy strike against the books.

But there is a big difference between 2018 and 2019 in terms of the projected cap space the Giants will have in each year which would make absorbing that big of a dead money cap hit a bit easier to swallow in 2019 than it would in 2018.

Based on a projected cap of $190 million for 2019, Over the Cap currently has the Giants with an estimated $57,020,819 of cap space for that year—this before any cuts or new extensions are factored into the equation.

That’s more than double the $23,394,235 of estimated cap space the Giants could have in 2018.

By the way, the Giants, like all other teams, will need to leave money aside for their draft class. The higher a team drafts, the more money they’ll need to reserve for their rookie pool.

Over the Cap projects the Giants will need a little over $10 million alone to sign their 2018 rookie class if they stay at No. 2 and if they keep all their remaining picks — and this figure, by the way, doesn’t take into any potential compensatory picks.

What that means is before any accounting is completed — playing incentive bonuses credited or debited from the cap, performance milestones, etc. — and before any bloated contracts are cut, the Giants will have approximately $13.2 million to spend in free agency.

There is another advantage to waiting until 2019 to part with Manning. If the Giants decide to go with a young quarterback in 2019, be it Davis Webb or the No. 2 draft pick, both of those players respective salaries would be far less than Manning’s 2019 cap figure of $23.2 million.

In Webb’s case, he would count for just $948,907 in 2019. If the Giants were to add another quarterback at No. 2 this year, his estimated cap hit as their first-round pick would be $5,694,864.

Together, that comes to $6.64 million for two quarterbacks who project as the future for the franchise.

The bottom line is that it would be a stunning development on all fronts if Manning were to be moved in 2018.

Come 2019, all bets are likely off.