Another Year in blue for #12

[backshoulderfade]

The #Colts announced they have picked up QB Andrew Luck’s fifth-year option. He’s under contract through 2016

— Ian Rapoport (@RapSheet)

April 9, 2015

[ColtsBlueFL]

Just received the news-

 

http://blogs.colts.com/

 

I thought a deal would be worked out.  Guess not.

[Colts_Fan12]

Irsay said that will be next offseason

[NewColtsFan]

The new deal will come next off-season.

 

That way, they can extend him, while at the same time,  LOWERING his cap hit.

 

It will be win-win for everyone.

[IndyD4U]

The new deal will come next off-season.

That way, they can extend him, while at the same time, LOWERING his cap hit.

It will be win-win for everyone.

Yup, he'll soon be the highest paid player in the NFL. Which is on track as I see him being the number one player in the league by then

[The Peytonator]

The new deal will come next off-season.

 

That way, they can extend him, while at the same time,  LOWERING his cap hit.

 

It will be win-win for everyone.

 

 

You sure it'll lower the hit? Isn't the hit going to be a little over 8m? If he's getting a deal that's worth more than 20m a year, I'm not sure it would be wise to backload it to that extent. I could see the first year being somewhere around 12m, but not anything that would LOWER the cap hit for 2016.

[throwing BBZ]

The new deal will come next off-season.

 

That way, they can extend him, while at the same time,  LOWERING his cap hit.

 

It will be win-win for everyone.

 

 So you predict a lower cap it than $16M for 2016. LOL!

[NewColtsFan]

You sure it'll lower the hit? Isn't the hit going to be a little over 8m? If he's getting a deal that's worth more than 20m a year, I'm not sure it would be wise to backload it to that extent. I could see the first year being somewhere around 12m, but not anything that would LOWER the cap hit for 2016.

 

So, he's got a $16 Mill cap hit set-up now.    When the structure his new deal it will likely lower his cap hit while they extend him.

[jmac_48]

I must be dense, but I fail to see the logic of this at the present time.

Unless, It is to shut up the speculation and questions by the media about his contract going into OTA's

 

????????CLUELESS???????

[CR91]

 

I must be dense, but I fail to see the logic of this at the present time.

Unless, It is to shut up the speculation and questions by the media about his contract going into OTA's

 

????????CLUELESS???????

 

 

 

this is the best thing we could do. this gives us the off-season to sign ty, coby, dwayne, and AC and not have to worry about andrew's contract

[NewColtsFan]

 So you predict a lower cap it than $16M for 2016. LOL!

 

If a new deal is going to be done next off-season, PRIOR to his $16 Million dollar deal kicking in,   then why do it then?

 

Why not do his new deal AFTER his $16 Mill season?

 

The reason to do it BEFORE is to be able to lower his cap hit.

 

I don't pretend to be a cap expert,  but that's what makes sense to me.

[jmac_48]

 

 

 

 

 

this is the best thing we could do. this gives us the off-season to sign ty, coby, dwayne, and AC and not have to worry about andrew's contract

 

Yeah, that's a given but why Now?

[The Peytonator]

So, he's got a $16 Mill cap hit set-up now.    When the structure his new deal it will likely lower his cap hit while they extend him.

 

 

Wow! Where did I get the 8m figure? 

[Valpo2004]

If a new deal is going to be done next off-season, PRIOR to his $16 Million dollar deal kicking in,   then why do it then?

 

Why not do his new deal AFTER his $16 Mill season?

 

The reason to do it BEFORE is to be able to lower his cap hit.

 

I don't pretend to be a cap expert,  but that's what makes sense to me.

 

Also the team loses leverage if they wait til after the contract season.

 

Right now the team has more leverage because Luck has to play 2 more seasons with them along with the possibility of getting hurt and losing his value.  So he'd be willing to take a slightly lower number for the security of knowing he will have the money.

 

If you wait til AFTER his contract is up then he has all the leverage.  He knows if the Colts don't give him what he wants within reason that there is another team who will.  

[Valpo2004]

Wow! Where did I get the 8m figure? 

 

Not sure. . . perhaps that's the cap hit on the option for QB's who where drafted in the first round but not in the top 10??? (They figure them differently when you are in the top 10)

 

His cap hit for this year is 7 mil, so it's not that.

[NewColtsFan]

Also the team loses leverage if they wait til after the contract season.

 

Right now the team has more leverage because Luck has to play 2 more seasons with them along with the possibility of getting hurt and losing his value.  So he'd be willing to take a slightly lower number for the security of knowing he will have the money.

 

If you wait til AFTER his contract is up then he has all the leverage.  He knows if the Colts don't give him what he wants within reason that there is another team who will.  

 

I don't think it quite works that way.    I'm not expert, but even after his 5th year is done,  the Colts could drop the franchise tag on him,  and they could do it three straight years.

 

He'd be getting a huge number each year,  but no huge signing bonus, which is what the players want.

 

The downside for the Colts is that his cap number would be huge and make it difficult for the team to keep quality players around him.

 

I hope Superman will see this thread and weigh in.....

[12isthenew18]

So happy right now. Let's extend t.y. and castanzo now

[Superman]

I must be dense, but I fail to see the logic of this at the present time.

Unless, It is to shut up the speculation and questions by the media about his contract going into OTA's

 

????????CLUELESS???????

 

He's a first round pick. The team has an option for a fifth year in 2016, but the option has to be picked up prior to the draft of 2015. So this was done now because 1) there's zero reason not to exercise the option on your franchise QB, and 2) the deadline is coming up.

[Superman]

I don't think it quite works that way.    I'm not expert, but even after his 5th year is done,  the Colts could drop the franchise tag on him,  and they could do it three straight years.

 

He'd be getting a huge number each year,  but no huge signing bonus, which is what the players want.

 

The downside for the Colts is that his cap number would be huge and make it difficult for the team to keep quality players around him.

 

I hope Superman will see this thread and weigh in.....

 

To me, it's six in one hand, half dozen in the other.

 

On one hand, the Colts probably have more leverage to negotiate a long term deal with some yearly savings, now. Like Valpo is saying, Luck getting a big contract now, without having to play another year on the rookie deal, might be an incentive to leave some money on the table. He trades somewhat high risk / high reward for less risk / somewhat less reward. 

 

On the other hand, extending Luck now would cost more money now. We could run through some scenarios, which I've done in the past, but the long and short is that the long term savings are practically offset by the increased short term expense. And because the cap is expected to continue to rise, the opportunity cost of increasing the short term expense instead of the long term expense might not be beneficial for the team. (In other words, extending Luck now might cost us room for another contract now, whereas extending him later won't, even if his price is higher, because the cap will have gone up.)

 

All told, I don't think this is going to be a difficult situation to manage for the Colts. They aren't letting Luck go anywhere. They'll probably make him the highest paid player in the league after 2015. I doubt that he'll have to play on the 2016 option without a long term deal, and of course that means I don't think they'll be franchise tagging him in the years after that. They would if they had to, but I don't think it's going to come to that. I think it gets done sometime next year, prior to camp. (I think Castonzo, who is on a fifth year option in 2015, will get done sometime prior to this year's camp.)

 

And while paying him top tier money will make cap management more difficult, I think the Colts front office has a pretty good handle on how to structure contracts without putting the team in bad shape. I did some projections earlier this offseason, and even with Luck, Castonzo, Hilton, Allen and Fleener on new contracts, I think the Colts can still be more than $20m under the cap every offseason. The question is whether the staff will draft and develop well enough moving forward.

[aavmarine]

Or maybe they just want to wait and see what Russell Wilson contract will be. I wouldn't think they want to give Luck the highest contract in history for someone that hasn't been to a Super Bowl yet. See what Russell gets and then work around that. Just a thought...

[Malakai432]

I still have no idea what this means, contracts, extensions, cap hits and options give me a headache. Reading these post I can't still tell if it's a good or bad thing, or good in the long term but bad in the short term or vica verse.

[amfootball]

I don't understand this. Why not get Luck done now as his numbers will only go up next season (he could even win league MVP) with a fourth year under his belt and cost the Colts more money. I think when you know you have a sure thing why not lock up earlier? That is what the Pats did with Gronk. Knew he had the goods even despite the injuries and locked him after year two on a big deal which is a great deal NOW given Gronk is the best TE in the league.

[dw49]

I don't think it quite works that way.    I'm not expert, but even after his 5th year is done,  the Colts could drop the franchise tag on him,  and they could do it three straight years.

 

He'd be getting a huge number each year,  but no huge signing bonus, which is what the players want.

 

The downside for the Colts is that his cap number would be huge and make it difficult for the team to keep quality players around him.

 

I hope Superman will see this thread and weigh in.....

 

 

Here's how tagging Luck for 3 years following the option year would look. 

 

Assuming the tag for a QB would be 20 mill as it's 18.5 now.

 

Year 1    20 mill or if somehow the cap wasn't 20 mill , the 120% of the 5th year salary takes him to 19.8 mill anyway.

 

Year 2    The greater of the new tag price or 120% of previous year's salary.   So minimum of $25,000,000

 

Year 3     The greater of the new tag price or 144% of the 25 miil.  So min of 36 million.

[csmopar]

I called this months ago. I think it's simply for two reasons, one it keeps the questions off of him this year. 2, it allows us to see exactly what the cap looks like by then, thus allowing us to work TY and the others into the mix.

I think this was the smart play in my opinion

[peytonmanning18]

Why are people over analyzing this?  This isn't a big deal at all.  He had a club option for 2016 on his rookie deal, they picked it up, not a big deal.  Did anyone really not expect this?  

[NewColtsFan]

Here's how tagging Luck for 3 years following the option year would look. 

 

Assuming the tag for a QB would be 20 mill as it's 18.5 now.

 

Year 1    20 mill or if somehow the cap wasn't 20 mill , the 120% of the 5th year salary takes him to 19.8 mill anyway.

 

Year 2    The greater of the new tag price or 120% of previous year's salary.   So minimum of $25,000,000

 

Year 3     The greater of the new tag price or 144% of the 25 miil.  So min of 36 million.

 

Yes.....    so there are built in incentives to get a deal done and disincentives to go the tag route...

 

All of which is good for both sides....

[Dustin]

I don't understand this. Why not get Luck done now as his numbers will only go up next season (he could even win league MVP) with a fourth year under his belt and cost the Colts more money. I think when you know you have a sure thing why not lock up earlier? That is what the Pats did with Gronk. Knew he had the goods even despite the injuries and locked him after year two on a big deal which is a great deal NOW given Gronk is the best TE in the league.

Because he's going to be the highest paid player ever regardless.

[amfootball]

Because he's going to be the highest paid player ever regardless.

Sure but you could still save on the total amount of the deal by doing it now instead of waiting a year. There is also Wilson's contract to consider. If he ends up being the highest paid player as many are predicting than Luck can ask for more than him as he is a much better QB.

[TKnight24]

Pay that man!

[dw49]

Yes.....    so there are built in incentives to get a deal done and disincentives to go the tag route...

 

All of which is good for both sides....

 

 

I think the tag is best used on a player that you just aren't sure of and don't want to invest long term in. Or maybe a guy that might be starting on his decline .. or "past peak. ?" Letting that player go might create a giant hole for a team that feels it can contend. So they bite the bullet and pay the high price for a year. I can't think of too many recent cases it's been used on a young impact player like Luck.

[Dustin]

Sure but you could still save on the total amount of the deal by doing it now instead of waiting a year. There is also Wilson's contract to consider. If he ends up being the highest paid player as many are predicting than Luck can ask for more than him as he is a much better QB.

The difference between $24M and $25M is miniscule.

[peytonmanning18]

I still have no idea what this means, contracts, extensions, cap hits and options give me a headache. Reading these post I can't still tell if it's a good or bad thing, or good in the long term but bad in the short term or vica verse.

It's not a good or bad thing, it's the only thing. His rookie contract was for 4 years with a team option for a 5th year. If he sucked, we could let him go after 4 years with no cap repercussions by not picking up his 5th year option, but he is a stud so we can pick up the option and get him for another year on his rookie contract before he signs his huge second contract.

[braveheartcolt]

I'm guessing, and it's just a hunch, that the Colts back office know just a little more about this stuff than we do. Just a little mind you. Especially with Polian gone.

[NewColtsFan]

I think the tag is best used on a player that you just aren't sure of and don't want to invest long term in. Or maybe a guy that might be starting on his decline .. or "past peak. ?" Letting that player go might create a giant hole for a team that feels it can contend. So they bite the bullet and pay the high price for a year. I can't think of too many recent cases it's been used on a young impact player like Luck.

 

No doubt....   and I don't think the Colts will ever have to use it with Luck.

 

I'm only saying it's in the back pocket in case of emergency. 

[jmac_48]

He's a first round pick. The team has an option for a fifth year in 2016, but the option has to be picked up prior to the draft of 2015. So this was done now because 1) there's zero reason not to exercise the option on your franchise QB, and 2) the deadline is coming up.

Yeah, I later found out about the deadline for the option.

 

Thanks for clarifying!

[ColtRider]

This whole matter is putting perception into reality while taking care of the contract extension, cap hit, deadline, and options in one roll of the dice. Cutting the deal now only puts more pressure on the organization, player (Luck), and unnecessary attention from everyone. Riding it out to the 5th year makes much more sense from a "must do" standpoint than trying to prove a point from "King of the Hill" highest paid player before then. Not saying he doesn't deserve it. He does. However, next year makes so much more sense from a tactical move by the Colts. And puts all parties into a win/win situation without all the hype trying to reach another Super Bowl this year.

Next season becomes a "must do" instead of a "won't do" scenario.

ONE

[NewColtsFan]

I still have no idea what this means, contracts, extensions, cap hits and options give me a headache. Reading these post I can't still tell if it's a good or bad thing, or good in the long term but bad in the short term or vica verse.

 

It's a good thing.

 

Plan and simple,  it's a good thing.

 

You don't have anything to worry about or to over-think.    This is a good thing. 

 

The big numbers for Luck will be in play about one year from right now....

[jmac_48]

Backing up the truck at W. 56th St. :

 

Ya! He deserves it...

[amfootball]

I think the tag is best used on a player that you just aren't sure of and don't want to invest long term in. Or maybe a guy that might be starting on his decline .. or "past peak. ?" Letting that player go might create a giant hole for a team that feels it can contend. So they bite the bullet and pay the high price for a year. I can't think of too many recent cases it's been used on a young impact player like Luck.

This is my thinking as well. The option is more for players that a team is straddling on whether to keep him or not. When you have a impact player at the most critical position than just pay him.

[SteelCityColt]

And while paying him top tier money will make cap management more difficult, I think the Colts front office has a pretty good handle on how to structure contracts without putting the team in bad shape. I did some projections earlier this offseason, and even with Luck, Castonzo, Hilton, Allen and Fleener on new contracts, I think the Colts can still be more than $20m under the cap every offseason. The question is whether the staff will draft and develop well enough moving forward.

 

edited for brevity

 

Just to say Superman an excellent, well thought out and well constructed reply. People are panicking about the 2012 draft class being resigned but as obvious at it sounds you hit the nail on the head. Draft well, develop talent well and you will be in a sustainable position of strength. For me the way GB run the FO side of things is the ideal.