I don't have a ton of faith in Merklinger but if this is going to be an ongoing saga and he is missing practices over this, you can't take the risk of him as the starting QB. What if he balls out the first month and then his dad wants more money and is threatening a hold out?
Also, Nico is what 21? I understand that is not an easy decision. I understand he's probably a victim of a dad who didn't have the talent and is living vicariously through him and that sucks. But you're also 21. At some point, you gotta stand up to the old man and tell him that is enough.