Peyton Predicament, Part 1 is here, detailing what would happen if Manning’s option were exercised. Where things get interesting is if the Colts do not exercise the option.

Non-exercise fee

Were the Colts to not exercise the $28 million option by March 8th, there is a non-exercise fee of that same $28 million due two days before the 2012 League Year, March 11th.

Translation: the Colts cannot simply let the option date pass without action; to do so would put them on the hook for the same amount and not have Manning. They will have to take the affirmative step of, yes, releasing Peyton Manning.

Free agent like no other

Assuming Manning is healthy – and that may be the biggest “if” of this entire discussion – he may be the most attractive free agent in the history of football. Simply, elite quarterbacks such as Peyton Manning never hit the open market; this is why such ransoms are paid in trades for quarterbacks such as Jay Cutler and Carson Palmer.

As a released player rather than an unrestricted free agent whose contract has expired, the Colts can neither (1) place the Franchise tag on Manning, nor (2) receive a 2013 compensatory draft pick if Manning signs elsewhere.

Again, it is curious why the Colts would agree to this poorly timed option clause, but Manning used his leverage to create options for himself.

Moving the date

As to the Colts needing to decide by March 8th – before the 2012 League Year and trading period begin on March 13th – many ask “Can’t Peyton push the date back?” Theoretically, perhaps. Practically, doubtful.

ICONCondon negotiated a de facto "no trade clause" in Manning's contract.

Manning and agent Tom Condon negotiated, in effect, a “no-trade clause” without it actually being designated as such.

As to moving the date, the CBA prevents renegotiations of contracts following the last regular season game of the League Year within which the date is in. The March 8th date is in the 2011 League Year, as the 2012 League Year begins on March 13th.

The NFL Management Council would interpret the language to allow the date to be moved, suggesting a moved date is not a "renegotiation". The NFL Players Association's lawyers have a different interpretation of that language, and could contest a moved date as a renegotiation in a grievance against the NFL and the Colts. However, that discussion may be moot due to the following...

Why move the date?

Manning is in limbo right now, both medically and contractually. The medical part may be out of his control and up to Mother Nature. The contract, however, is totally in his control. He will want to know his fate as soon as possible, needing March 8th to get here as quickly as it can. Why would he prolong that?

Even if Manning were allowed and amenable to moving the date, he would not want to move it past the first couple days of the new League Year – March 13th – so if the Colts release him he would be on the market when teams make their quarterback decisions. And, of course, his neck condition will not be dramatically different in a week’s time.

As to a potential trade...