The five-year, $96 million contract agreed to today between Peyton Manning and the Denver Broncos is truly one that makes sense for both sides. It addresses the magnitude of the player that Manning is while also protecting the team with risk allocation because of Manning’s pre-existing injury. Let’s take a look:

Year One

Manning will make $18 million -- his jersey number -- regardless of injury. Simple.

Years Two and Three: The physical and the waiver

Not so simple. Manning will undergo what is termed a “postseason physical” 10 days before the start of the 2013 League Year, sometime in late February or early March. In the event Manning passes that physical, he will activate a $40 million guarantee, paid out as $20 million salaries in both 2013 and 2014.

The Broncos will have further protection with an injury waiver to Manning’s neck for these two years. In the event Manning suffers an injury that is related to his C-6/C-7 cervical spine fusion “and related pathologies,” the Broncos will be able to reduce the guarantee for the following year. For example, were Manning to suffer an injury in Week 10 of 2013 related to his neck injury, the Broncos would pay the rest of the 2013 salary, but not be on the hook for 2014.

The waiver gives the Broncos protection on one “body part” of Manning; the key body part of the transaction, his surgically repaired neck.

Years Four and Five: Annual physicals and guarantee

Manning is scheduled to make $19 million in both 2015 and 2016. The amount becomes guaranteed when Manning passes his physical prior to the start of each League Year. This is similar to the guarantee above, although on a year-to-year basis rather than the two-year guarantee of 2013-2014.

Of course, the Broncos can release Manning prior to that physical in either year and avoid any future liability.

There you have it: $96 million over five years, with guarantees throughout the contract that are triggered upon the passing of annual physical exams. And it contains a waiver on the pre-existing condition that Manning is arriving with, giving protection to the team.

My initial reaction is that Manning could have leveraged much more money if he wanted to. The Titans and Seahawks probably would have paid more and required less protection. This is a contract where the player saying, “It’s not about the money” truly means that. There are few deals in sports that are by definition good for both sides. This appears to be one.