The deal was first reported by ESPN.com's John Clayton.
The Super Bowl MVP was to receive a $10 million roster bonus
during the offseason but by converting the money into a regular
signing bonus, the Colts can prorate that amount over the remaining
four years of his deal. That saves Indianapolis space under the
cap, which is $109 million.
The Colts also restructured the $3.9 million roster bonus of defensive end Robert Mathis. That lowered his cap number from $7.11 million to $3.99 million. The dual savings of both Manning's and Mathias' deals now gives the Colts $14.8 million of cap room. Before making those moves they were right at the cap.
Colts spokesman Craig Kelley said the team had no comment.
Manning signed a $98 million contract in March 2004, the season
after he shared the league's MVP award with Steve McNair.
He followed that with a record-setting 2004 season in which he
threw 49 touchdown passes and earned his second straight league MVP
In 2005, Manning guided the Colts to a 13-0 record and the AFC's
No. 1 seed before losing in the divisional round of the playoffs to
eventual Super Bowl champion Pittsburgh.
But this season, Manning showed more patience in throwing short
and relying on his ground game, using that combination to bring the
Colts their first Super Bowl title since moving to Indianapolis in
Manning has led the Colts to seven playoff appearances in nine
seasons, including five straight under coach Tony Dungy, and after
breaking John Unitas' franchise record for completions last season
is closing in on Unitas' other career records for passing attempts,
yardage and touchdowns.
The Associated Press contributed to this report.