Allow me to digress from real estate for a moment and float my theory about how the Tennessee Titans can bring Peyton Manning home for a $1 a year salary. BTW, I am not a dyed in the wool Vols fan, but I am a huge Titans fan and do believe that Peyton Manning is not only one of the best quarterbacks in NFL history, but he is also one of the most kind, giving and loyal human beings in sport today. What he has done for the city of Indianapolis far outweighs what he has done on the field and I want that for Nashville.
Before I get started, let me lay out a few ground rules and assumptions. First, let’s assume that Peyton Manning has fond memories of his time as the defacto leader of Volnation. Next, let’s assume that he has not already made up his mind. Let’s also assume that Peyton is mentally prepared to become the face of Tennessee – not just the team, but the entire State. Peyton is a living legend in Knoxville and you better believe in Nashville too. Next, let’s assume that the Titans ownership and management want Peyton on the team. Clearly, there could be a dynamic within the organization that the general public is not privy to. Finally, let’s forget about all of the minutiae and specifics of how the deal would be structured and look at it from a ten thousand foot vantage point.
How to Structure Peyton Manning’s record $1.00 Contract
The general premise is simple: having Peyton Manning on the field will increase ticket sales, concession sales, merchandizing, TV contract revenue, radio contract revenue, etc. I propose that you pay Peyton $1 per season and give him 50% of the incremental revenue the team earns over the previous calendar year (yes, I know the NFL minimum base salary is $925,000 for players who have been in the league to 10+ years, but it doesn’t roll off the tongue like $1). Additionally, the team commits to help to publicize and fund the PeyBack Foundation as well as a Peyton Manning wing at the Vanderbilt Children’s Hospital. If there is one thing I have observed about Peyton, he gives back in spades to his fans and community. The team ownership should embrace and amplify these efforts.
I know the above plan may sound crazy to most in the sports world, but in the real estate world, we do this exact deal every day. In real estate it’s called a joint venture (JV) and is defined as a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets. In the above scenario, Peyton Manning is contributing his football services and brand as equity to the deal while Bud Adams and the Titans organization are providing the infrastructure and vehicle for incremental revenue.
Why Not Pay Peyton Manning Millions?
The answer is simple, the money you save by not paying Peyton Manning what he is worth in salary is diverted to building the team around him. There is no doubt that Peyton Manning wants to go back to the Super Bowl. The Titans have a lot of the right pieces in place like a ridiculously talented Chris Johnson, but the offense needs a little more firepower. I am not going to speculate who would be the best players to acquire, but certainly there are a handful you would attempt to secure.
The other reason you don’t pay Manning millions is because putting a price tag on this guy is insulting. If some owner in Arizona or New York thinks that $30 million is all this guy is worth, he is not valuing Peyton the person. Case in point: I have a good friend who has lived in Indianapolis for almost a decade. When I spoke with her last night, she was devastated that Peyton Manning had been released from the Colts. She is not a football fan at all, but she loves Peyton Manning the person and what he has done for Indy. His footprints are literally everywhere in that town, from the “House that Manning built (Lucas Oil Stadium) to the Peyton Manning Children’s Hospital at St. Vincent and everywhere in-between.
Listen – I live in a world where the good guys win. I want Peyton Manning to win and I want him to do it in Tennessee where millions of Vol fans love this guy beyond belief. If Peyton signed with the Titans, it would be like Elvis coming out of hiding, showing up on the doorstep of Graceland and saying “where have ya’ll been?” If I am Governor Bill Haslam or Mayor Karl Dean, I am on the phone with Bud Adams formulating a plan to bring Peyton home. Seriously, go get on the phone and make this team, city and state better!
Thanks for indulging me this afternoon, I promise to get back to analyzing and practicing real estate now.