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Colts Cap Update After First Days of Free Agency

Daniel Jones' extension created a ton of cap space for the Indianapolis Colts.
Sean Ackerman|
Indianapolis Colts General Manager Chris Ballard speaks with media Thursday, Jan. 8, 2026, at the Colts practice facility in Indianapolis.
Indianapolis Colts General Manager Chris Ballard speaks with media Thursday, Jan. 8, 2026, at the Colts practice facility in Indianapolis. | Mykal McEldowney/IndyStar / USA TODAY NETWORK via Imagn Images

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Indianapolis Colts

Entering free agency earlier this week, the Indianapolis Colts had very little wiggle room in terms of available cap space. They still needed to get deals done with Alec Pierce and Daniel Jones, but one of those deals is exactly what freed up some money in the short term.

Last weekend, the Colts were about $4 million over the cap. They traded linebacker Zaire Franklin, who is set to earn about $5 million, to the Green Bay Packers in exchange for defensive tackle Colby Wooden, who carries a cap number of just over $1 million. The move put the Colts $154,000 under the cap, but it was the first domino in a series of cost-cutting measures.

The Colts converted $11 million of left tackle Bernhard Raimann's salary into a signing bonus, dividing the cost over the span of multiple years. The agreement freed up about $8 million in cap space for 2026.

How the Colts Saved Money by Extending Jones

After placing the transition tag on Daniel Jones, the Colts were set to owe $37.8 million of fully guaranteed money to the veteran signal-caller. Fortunately, the transition tag was simply a placeholder for the extension that was still being negotiated.

The Colts agreed to a two-year, $88 million deal worth up to $100 million with Jones. The Colts gave Jones a signing bonus of $44 million, and according to Over The Cap, that bonus is prorated over five years, with $8.8 million in cost per year.

Jones' base salary is only $5.5 million, so for 2026, he carries a cap hit of $14.68 million. When you compare it to his transition tag cost, the Colts are saving over $20 million by signing Jones to a multi-year extension instead of having him on the one-year tag.

Alec Pierce's Unclear Conract Details

On Monday, the Colts and Pierce finally came to terms on a four-year, $116 million extension that will keep Pierce in Indy through the 2029 season. Pierce gets $60 million in fully guaranteed money, but it's not clear how the rest of the deal was structured.

Theoretically, if you perfectly divided the salary by four, you get a $29 million cap hit. But with signing bonuses and structures, that likely isn't the case. The most likely scenario is that Pierce's cap hit is under $29 million, because if it were over that, he would chew up a majority of the team's cap space.

Arden Key and Micheal Clemons Signings

The Colts brought in defensive linemen Arden Key and Micheal Clemons as new rotational pieces for Lou Anarumo's defense. Clemons signed a three-year, $17 million contract with Indy, and he carries a $4.47 million cap hit for 2026.

Key, on the other hand, signed a two-year, $20 million contract with $11 million fully guaranteed. The structure hasn't been revealed yet, but he'll theoretically carry a $10 million cap hit.

OTC has the Colts with $50 million in cap space, but that number doesn't factor in Pierce's and Key's deals. If you took Pierce's projected $29 million and combined it with Key's projected $10 million, the Colts have just over $10 million in cap space left. Realistically, those numbers are probably a tad higher.

Once details emerge about their deals, the Colts' definite cap numbers will be made clear. I'd estimate Indy has about $10-20 million left to spend this year, and with clear gaps on defense, any dollar saved will be useful.

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Sean Ackerman
SEAN ACKERMAN

Sean Ackerman is the co-Deputy Editor of Indianapolis Colts on SI. Ackerman, a graduate of Western Kentucky University, majored in broadcasting. He's in his third year covering the NFL.

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