Michael Vick Should Be Able to Pay off His Debts and Have Something Left Over (I hope)

Philadelphia Eagles QB Michael Vick just signed a 6 year deal with the team that is worth 100 million dollars with about 40 million of it guaranteed. If you remember, back in 2004 Vick signed a 10 year 130 million dollar deal with the Atlanta Falcons. It made him the richest player in the NFL at the time. Before he was found to own a dogfighting business, it was assumed that he would play out the rest of his career in Atlanta.

Barring any further foolishness he should be ending his career in Philadelphia. If his legs don’t hold up, they can always cut him after a few years.Before this latest contract was signed, Vick was due to make $16 million from the Eagles for this season. This deal should take Vick’s cap number from 16.2 million to 14.4 million. That means he will make less for the season freeing up a room in the salary cap for wide receiver Desean Jackson, who held out of most of training camp, to get a pay increase.

Now we’ll have to wait and see how the signing bonus pans out to really have an idea of what Desean can get. Signing bonuses are prorated against the cap over the length of the deal. Either way this restructuring helps the Eagles cap. Philadelphia media is sold on the Eagles cutting corner back Joselio Hanson which would give them another 2.4 million in cap space (estimated). It is kind of crowded on the team at that position these days! If they do cut Hanson, that will help Desean’s case as well.

For context.

Peyton Manning’s was reported 5 years, $90M with $54.4M guaranteed. Tom Brady’s was 5 years, $78.5M with $48.5M guaranteed.

Congratulations to Vick and here’s lookin at you Desean.

As far as Vick’s debt is concerned, his creditors have to be smiling. Let’s take a look at his circumstances. First of all, he’s on a court-ordered budget until 2015:

Under the terms of the budget, he is permitted to spend $3,500 each month for rent in Philadelphia, with another $750 for “utilities and miscellaneous.” There is no provision in the budget for buying dinner for his offensive linemen.

He is also obligated to pay $3,712 per month on the mortgage for the only remaining residence he owns, an unimpressive house in Hampton, Va., where his fiancée, Kijafa Frink, lives with the couple’s two children, Jada and London. In a rare bit of extravagance, the budget permits Vick to pay $1,355 monthly for a private school for the children.

Although there is a budget provision for “living expenses,” his car allowance is only $472 per month, a far cry from Vick’s pre-arrest collection of F-450 pickups and $100,000 luxury automobiles.

Vick’s mother, who was on his payroll in his previous professional life, is limited to $2,500 per month under the budget, a significant reduction from the salary and gifts Vick once bestowed upon her. He is also required to pay $3,000 per month to support former girlfriend Tameka Taylor and their son, Mitez.

The budget provides more generously for Vick’s agent, Joel Segal, and for Vick’s team of bankruptcy lawyers. Vick will pay Segal $32,500 this year, another $104,000 next year, and then $160,000 each year through 2015. It’s a total of nearly $800,000.

The fees Vick will pay to the bankruptcy lawyers are scheduled to be $748,750 this year, another $1,058,080 next year and a total during the budget years of $2.6 million.

The budget is part of a plan that is supposed to allow him to pay off the debts he accumulated before his arrest. It’s based on Vick’s playing well enough to earn a bonanza free-agent contract at the end of the current season, and it provides for total payment to his creditors of more than $12 million between now and 2015.

As a “reorganized debtor,” Vick’s income will be distributed to his family and his creditors in accordance with a court-approved schedule. As his income increases, he pays more of it to the creditors. (See the accompanying table.)

Other People’s Money

The more Michael Vick makes, the higher the percentage that goes somewhere other than into his pocket. Here’s how it works

As Munstor points out, Vick could have filed Chapter 7 and never paid back the bulk of his debts. But he didn’t. And that’s commendable.