Word out of Philadelphia Monday evening indicated Michael Vick had agreed to terms on a six year contract worth upwards of $100 million. This is Vick's second contract "worth" nine figures and acts as fitting bookends to his dog-fighting prison sentence. The first contract represented what at the time seemed like the heights of Michael Vick. The prison sentence resulted not only in a fall from grace with the fans, but an epic financial fall that left him in bankruptcy court.
As part of Michael Vick's rehabilitation, he has been working to cure his financial woes that left him owing upwards of $20 million to various creditors. The math is incredibly confusing but Lester Munson took a stab at the documents last December while Vick was earning $5.25 million in his second season with the Eagles.
Vick's bankruptcy has led to thousands of pages of documents dealing with a host of assets and liabilities. The court finally worked out a deal with Vick that resulted in limited access to assets while trying to work out payment on the numerous debts. Part of it was based on Vick eventually earning a sizable contract in free agency and that goal has been reached with this new contract.
Vick's court-approved bankruptcy reorganization plan created a schedule of payments based on the salaries Vick earned in a given year:
|Income||Percentage to Creditors|
|$750,001-$2.5 million||25 percent|
|$2,501,000-$10 million||30 percent|
|Above $10 million||40 percent|
Vick's deal is not backloaded like many $100 million deals and in fact he could earn upwards of $16 million each of the first three seasons. He'll pay 40% of that to creditors to help pay down $20 million in debt. Under Vick's previous contract, two-thirds of every dollar he earned was going to the IRS and creditors. He has been living under a court-ordered budget that provides $4,250 for rent and utilities each month. He has a car allowance of $472 per month, a limit of $2,500 of allowance for his mother, and $3,000 in support for his ex girlfriend and their son.
Vick's new contract provides $40 million in guaranteed money. It would not take much time to deal with his current debts based on this new contract. At the same time, one has to wonder how Vick will handle his financial windfall given the lessons he learned from his previous financial downfall.
Any changes to his current plan require court approval. If he was prepared to pay off his debts in one fell swoop, I'd imagine the court would be content to get it taken care of with relative ease. The question now is what lessons he has learned from his prior mistakes and how that will impact his current financial situation. He is close to being back in a position of financial strength. Even outside the dog-fighting, he faced a tough lesson with regards to his personal finances. Let's hope he learned a lesson in that regard as well.