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Freeney, 34, will go from making $3.5 million next season to $2.5 million in the final season of his two-year contract. The move frees more than $900,000 in salary cap space, per the report.
Freeney believes that he can return in fine form.
"Everything is looking great," Freeney told the newspaper. "It's all green lights pointing to great things next year. I'm ahead of schedule as far as rehab is concerned, so that's good. I'll be back. I still enjoy the game."