Titans decline bonus, but pay $1M non-exercise fee

In a move that all but assures Steve McNair will be back with the Tennessee Titans in 2006, the team has declined to pay the prohibitive $50 million option bonus built into his contract, but paid the quarterback a $1 million non-exercise fee that boosts his compensation for the coming season to $10 million.

The maneuver, confirmed by league sources, means that the perennially cap-strapped Titans gained considerable relief for 2006 on McNair's contract. But it also voids the final three years of the contract and makes the 2006 season the final year on the deal.

Without a subsequent extension to the contract, McNair will be eligible for unrestricted free agency next spring.

McNair, 33, has a 2006 base salary of $9 million. Under terms of his deal, his base salaries would have been $11 million for 2007, $13 million for 2008 and $15 million for 2009. But those salaries would only have taken effect had the Titans paid the $50 million bonus to trigger the options on those three seasons, and they were never going to do that.

In fact, the staggering option bonus was built into the contract to force the two sides to the negotiating table after the 2005 campaign, which it has done. Although agreement on a new contract for McNair is not imminent, and general manager Floyd Reese indicated recently that the process could be a long one, the two sides will continue discussions.

"What this amounts to is they decided to pay $1 million and not
add three years to his contract, so this is his last year. At the
end of this year, Steve will be a free agent," agent Bus Cook

Reese said they will keep trying to
negotiate a new deal with McNair that gives them more room under
the salary cap.

"The cap number is much bigger than we'd like to live with. It
would help if we extend his contract, and it also helps us get more
players. He will for sure be a Titan for another year, and then
hopefully more after that," Reese said.

The team's first-round pick in the 1995 draft, McNair played well at times last season, didn't suffer from the kind of debilitating injuries of the past few seasons, and seemed re-energized by the potential of the offense installed by new coordinator Norm Chow. In 14 appearances, all starts, McNair completed 292 of 476 passes for 3,161 yards, with 16 touchdown passes and 11 interceptions as a rebuilding Titans team sputtered to a 4-12 record.

There has been much speculation in the offseason that Tennessee will use its first-round choice in this year's draft to select McNair's eventual successor, but the Titans want their longtime starter for at least a few more seasons to help groom his replacement. McNair has missed 12 starts the last three seasons because of injuries and that remains a matter of some concern.

In another cap-related matter, agent Hadley Engelhard confirmed to ESPN.com that tailback Travis Henry has restructured his contract to provide the Titans some cap relief. Henry, 27, missed four games in 2005 because of a violation of the NFL substance abuse policy. In 10 games, but just one start, Henry carried 88 times for 335 yards.

The Titans reworked the contract of linebacker Peter Sirmon. They also cut left tackle Brad Hopkins Wednesday at a savings of $4.6 million. As Thursday began, the Titans were a manageable $4.6 million over the salary cap.

Len Pasquarelli is a senior NFL writer for ESPN.com. Senior writer John Clayton contributed to this report.

Information from The Associated Press was used in this report.