A source with knowledge of the situation tells ESPN.com's AFC North blog that it's highly unlikely Palmer would accept a pay cut this offseason to remain with the rebuilding Bengals (2-11). Palmer is projected to be one of the NFL's highest-paid players in 2011 with a base salary of $11.5 million, and this could be the first step to a potential parting between the two-time Pro Bowl quarterback and the team which drafted him No. 1 overall in 2003.
Cincinnati has yet to discuss its offseason plans with Palmer. But with the pay-cut option now squashed, this puts the Bengals in a tight spot. Cincinnati -- one of the NFL's most frugal franchises -- has to decide whether to overpay for a struggling quarterback or release Palmer, who will turn 31 on Dec. 27, and make him a free agent for the first time in his career.
With no salary cap in place, the Bengals can cut Palmer without absorbing any charges. Entering Week 15, Cincinnati also holds the No. 2 overall pick, which is a good spot to draft a quarterback.
An offseason trade might be a third option. But it could be a challenge for Cincinnati to convince other teams to pay Palmer's ballooning $11.5 million salary despite declining production. Palmer has six multi-interception games this season and 18 picks total, which is the second highest tally of his career. He also holds a pedestrian 78.1 passer rating.
Palmer provided a clue to potentially moving on earlier this week when reporters in Cincinnati asked if Palmer could see himself in another uniform next year.
"Yeah, anything is possible," Palmer said candidly. "This is a business."
The Bengals will have plenty of tough business decisions to make this offseason -- and it starts with their franchise quarterback.