Finances sealed Manning's fate

The dye is now cast. It would have been a dramatic upset if Indianapolis Colts owner Jim Irsay exercised the option to extend Peyton Manning's contract for four more years by Thursday's deadline. All the signs pointed toward a separation; now the marriage between the Colts and Manning appears to have ended.

The contract

Like most decisions in sports, the reason for this one comes down to money. Beyond the back and forth about Manning's neck condition, this decision was ultimately financial.

The Colts and Manning negotiated a contract in July with a decision point of Thursday to determine whether it is a one-year deal for $26.4 million or a five-year deal for $90 million. The contract states, in part:

"Club will have the option to extend this contract for the 2012, 2013, 2014 and 2015 seasons at any time from the second day after the Super Bowl up to and including the fifth day prior to the end of the 2011 League Year."

In calendar terms, the Colts have had since Feb. 7 to affirmatively exercise their option on Manning's contract. Their inaction had spoken volumes.

And the Colts could not simply let the option date pass. Due to a clause known as a "non-exercised fee," the Colts could have owed Manning that same $28 million while not having him on their roster.

Thus, had the Colts simply let the option pass and not released Manning before Friday, Manning would have still received $28 million and he would have become a free agent when his contract expires on March 13. If that happened, there would have been more firings in the Colts' organization than just Manning.

This contract -- now also central to the Drew Brees negotiation -- had given Manning leverage as the date approached.

The cash

Keeping Manning would have cost the Colts the $28 million option bonus plus $7.4 million in salary this year for a total of $35.4 million in 2012 alone. The top pick in April's draft -- expected to be Andrew Luck -- will cost $23 million over four years, front-loaded to include approximately $15.6 million in 2012.

That is a cash commitment for two players at the same position -- only one of whom will play -- of $51 million. That was untenable.

The cap

Manning's cap charge would have been $17 million if kept and $10.4 million now that he'll be released. Conveniently, the $5.6 million in cap savings corresponds to roughly the cap charge for the top pick in the draft.

The signs

New general manager Ryan Grigson and coach Chuck Pagano have uncomfortably avoided discussing Manning. For both, this decision day could not have arrived soon enough.

As for Irsay, I thought his tweet that he didn't mind paying Manning "$26,000,000" (he forgot the other $400,000) in 2011 served as a notice of a pre-severance to Manning.

Comparison to Green Bay

In 2008, Brett Favre, used to being courted to return, was told, "It's your decision." Feeling little warmth from the organization, Favre tearfully retired only to return to be told the team had moved on to Aaron Rodgers.

Knowing how impressed we all were with Rodgers, I always thought the decision was less about Favre and more about Rodgers. Simply, it was time.

The Colts' situation is similar due to a replacement waiting in Luck, thought to be a once-in-a-generation player who can take the reins immediately. It is time.

One wonders whether the Colts would be moving on from Manning were they picking, say, 10th in the draft, a question that will remain hypothetical.

I sense Irsay hoped Manning would retire and accept a role with the team. However, not only does Manning want to play, but he also has clearance from his doctors and there are YouTube videos to prove his arm strength.

What's ahead?

After Manning's release, the Colts can now sign Luck to a four-year contract that will be relatively easy to negotiate. They have been able to sign him since the scouting combine but rightfully were waiting until Manning's situation cleared.

For Manning, he will enter a free-agent market as a true anomaly: a franchise quarterback set free. These players simply never hit the market.

Manning need not wait until March 13. He is free to sign immediately. My sense is the leading contenders for Manning's services will be the Redskins and Dolphins, two franchises with ownership enamored with name brands like Manning.

The future

Looking at the financial commitment required, Manning's multiple neck surgeries and the replacement-in-waiting, Irsay made an organizational business decision that is prudent and sound. Irsay can phrase his approach as respecting the past but not being tied to it. Peyton Manning represents a glorious past; Andrew Luck is the future.

Irsay need not apologize, but does need to have the appropriate respect and notice given to Manning, the face of the franchise for so many years.

In the end, the Manning situation proves that, even for the best of players and their longtime franchises, it rarely ends well. The business of football is full of similar tales. The inexorable march of time beats on.