Russell Street Report Salary Cap Ravens 2014 Free Agency Preview

What a difference a year makes! Last year at this time, the Ravens were preparing for what was going to be Ray Lewis’ last home game in Baltimore and hoping to be able to find a way to put it together to make a run at the Super Bowl and reward Lewis with the ultimate retirement gift.

While hopeful, few could have really envisioned the historic run to come!

This year, however, there is a much different feeling – and outcome. Unable to find the extra gear that carried them the year before, the 2013 Ravens failed to make the playoffs and are now forced to deal with their offseason business a lot sooner than they hoped.

This offseason looks to be another offseason of roster turnover, as the Ravens seek to further bolster the defense that occupied so much of their attention last offseason, while hopefully finally finding the weapons and support necessary to solidify QB Joe Flacco’s standing as one of the top QBs in the NFL.

So, with that in mind, here’s a look at the Ravens’ 2014 Free Agency and Salary Cap status:

PLAYERS UNDER CONTRACT

The Ravens presently have the following 37 players under contract for 2014 (with Cap Numbers indicated):

QBs (2): Joe Flacco ($14.8M), Tyrod Taylor ($671K)

RBs (4): Ray Rice ($8.75M), Bernard Pierce ($709K), Vonta Leach ($2.33M), Kyle Juszczyk ($570K)

WRs (4): Torrey Smith ($1.078M), Deonte Thompson ($571K), Aaron Mellette ($507K), Marlon Brown (497K)

TE (0):

OL (7): Marshall Yanda ($8.45M), Kelechi Osemele ($913K), Jah Reid ($786K), Gino Gradkowski ($691K), AQ Shipley ($580K), Ricky Wagner ($531K), Ryan Jensen ($515K)

DL (6): Haloti Ngata ($16M), Chris Canty ($3.167M), Pernell McPhee ($681K), Brandon Williams ($624K), DeAngelo Tyson ($582K), Kapron Lewis-Moore ($517K)

LBs (6): Terrell Suggs ($12.4M), Jameel McClain ($4.4M), Elvis Dumervil ($3.375M), Courtney Upshaw ($1.445M), Arthur Brown ($808K), John Simon ($591K)

CBs (4): Lardarius Webb ($10.5M), Jimmy Smith ($2.374M), Chykie Brown ($681K), Asa Jackson ($604K)

S (1): Matt Elam ($1.538M)

ST (3): Sam Koch ($2.8M), Justin Tucker ($570K), Morgan Cox ($855K)

These 37 players are under contract for a total Salary Cap commitment (which includes dead money from players no longer on the team) of just over $111.872M. (Link to 2014 Salary Cap Spreadsheet).

Early reports are that the 2014 Salary Cap will be set at $126.3M, but other reports indicate that the Cap could go as high as $128-129M.

Using the $126.3M figure to be on the conservative side, the Ravens would have just under $14.5M in Cap space. But, that figure is for only the 37 players presently under contract for 2014.

So, between now and March 11th at 4:00 p.m., when the new league year begins and free agency begins, the Ravens have a lot of work to do.

PRACTICE SQUAD FREE AGENTS (FAs)

In past years, the Ravens have usually re-signed all of their Practice Squad players to contracts for the coming year. The announcement of these signings will likely come in the next couple of days.

The 9 players currently on the Practice Squad (or the Practice Squad IR) are:

WR Kamar Aiken

TE Matt Furstenburg

RB Jonas Gray

DT Cody Larson

OT David Mims

TE Nathan Overby

WR Gerrard Sheppard

QB Nick Stephens

G Reggie Stephens

Most of these players will be re-signed to one-year contracts of $420K. Based on already having an accrued season in the NFL, David Mims and Reggie Stephens would receive one-year contracts of $495K.

EXCLUSIVE RIGHTS FREE AGENTS (ERFAs)

These players must be tendered contracts of the league minimum, based on the player’s length of service in the league ($570K, $495K or $420K). Once tendered, these players are fully under the team’s control and are not free to negotiate with other teams.

The Ravens have 6 players who are Exclusive Rights Free Agents (ERFAs):

S Omar Brown ($570K)

LB DJ Bryant ($420K)

LB Josh Bynes ($570K)

LB Adrian Hamilton ($495K)

S Anthony Levine ($495K)

S Brynden Trawick ($495K)

In the past, the Ravens have usually always tendered all of their ERFAs.

RESTRICTED FREE AGENTS (RFAs)

These are players whose contracts have expired and who have 3 years of accrued service time. The team must tender the player with an RFA offer. Once tendered, another team can sign the player to a RFA offer sheet, but the Ravens then have 7 days to match that offer sheet and retain the player under the terms of that offer sheet. If the Ravens were to choose not to match the offer sheet, they would then receive compensation based on the level of RFA tender made to the player.

There are 3 RFA tenders (the 2011 CBA eliminated the “high” tender of 1st and 3rd round draft picks as compensation):

1st Round Tender: allows the team to receive compensation of a 1st round – $3.023M

2nd Round Tender: allows the team to receive compensation of 2nd round pick – $2.124M

Low Tender: allows the team to receive compensation of a draft pick equal to the round in which the player was originally drafted or the Right of First Refusal (ROFR) for an undrafted player – $1.389M

The above Tender amounts appear to be set for 2014, so long as the overall Salary Cap does not increase to over $129.15M. Under the terms of the CBA, the RFA Tender amounts increase at the same rate as the overall Salary Cap, with the minimum increase being 5%. The above totals represent that minimum 5% increase, since it appears that the Cap is not going to go up by more than 5%.

The Ravens have 2 players who are Restricted Free Agents (RFAs) – with original draft round indicated:

WR – Tandon Doss (4th)

LB – Albert McClellan (undrafted)

In the past, the Ravens have usually tendered all of their RFAs, but on occasion, the team has non-tendered a player and instead re-signed the player to a one-year veteran minimum contract. The veteran minimum salary for such a player for 2014 is $645K.

For the purposes of this projection, we’ll assign the low RFA tender to both Doss (4th round comp) and McClellan (ROFR – no comp). That said, given that both players have plummeted down the team’s depth chart as this past season progressed, it’s very possible that one or both could be candidates to be non-tendered (and perhaps re-signed).

Keeping in mind, though, that RFA/ERFA tenders are not guaranteed, so just because a player is tendered (as either as a RFA or ERFA) that is no guaranty that the player will ultimately make the final 53-man roster.

UNRESTRICTED FREE AGENTS (UFAs)

The following 14 players are Unrestricted Free Agents (UFAs) and will be free to sign with other teams if they haven’t re-signed with the Ravens before Free Agency begins on March 11th at 4:00 p.m.:

TE Dallas Clark

NT Terrence Cody

TE Ed Dickson

CB Corey Graham

DT Arthur Jones

WR Jacoby Jones

S James Ihedigbo

S Jeromy Miles

OT Eugene Monroe

OT Michael Oher

TE Dennis Pitta

RB Bernard Scott

LB Daryl Smith

WR Brandon Stokley (has announced intention to retire)

2013 SALARY CAP CARRYOVER

Under the CBA, teams are allowed to carry over excess Salary Cap space from one year to the next. The Ravens will finish the 2013 season with around $1.5M in excess Cap space.

PROJECTED ADJUSTED TEAM CAP AND SALARY CAP COMMITMENT

Based on all of the above, it is estimated that the Ravens will have an adjusted Team Salary Cap of $127.298M. The team’s adjusted Cap consists of the projected league Salary Cap of $126.3M, plus the carryover of the 2013 excess Cap space of just over $1.5M, less adjustments for workout bonuses.

NOTE: There will be further adjustments for earned and unearned 2013 incentives that will raise or lower that adjusted Cap a bit. That incentive adjustment usually isn’t disclosed until March.

So, prior to the team making any other roster moves (releases or retirements) or the restructure of any contracts, the team would enter the 2014 league year with a Salary Cap commitment of $120.365M, leaving them with $6.933M in Salary Cap space, with 54 players under contract or tendered.

This number represents the “Rule of 51” Salary Cap status for the Ravens. During the offseason, when roster can balloon to up to 90 players, only the highest 51 Salary Cap numbers (and all 2013 bonus prorations and all dead money from released players) are counted for Salary Cap purposes.

With that said, that number is going to be greatly affected by……..

RELEASE/RETIREMENT/RESTRUCTURES

Based on the above, it’s pretty clear that the Ravens are going to have to create additional Salary Cap space in order to be able to sign or re-sign other players to the roster. There are two primary ways of creating additional Salary Cap space – (1) restructuring/extending of contracts and/or (2) releasing/trading players.

The below chart lays out the Salary Cap implications of the release (or trade) of some Ravens players:

As the above chart shows there are different implications to releasing a player prior to June 1 and after June 1. Releasing the player before June 1 allows the player to be fully cleared off the books immediately, by taking the entire hit of dead money (the acceleration of bonus money from signing bonuses) in the present year. This generally makes for a smaller amount of Cap savings, but also keeps the release from having any Cap implications in the following season.

Releasing a player after June 1 (or using a June 1 designation on a release prior to June 1), allows for a more sizeable Cap savings, by pushing dead money onto the following year’s Cap. More importantly, though, any Cap savings realized from a post-June 1 release (or a June 1 designation release) is not available until after June 1, so there’s no benefit to such a release in March, when the money is generally needed to sign or re-sign players to build your roster.

The Ravens have historically shied away from releasing players post-June 1. In the past, they have at most used just one post-June 1 release.

McCLAIN/LEACH/KOCH: These three are probably the most likely players to be released. Each provides a decent amount of Cap savings. McClain, while returning admirably from a serious neck injury, hasn’t looked particularly good and probably isn’t worth $3.2M in base salary. While certainly a valuable team leader, the Ravens barely used Leach this past season, which sort of begs the question why they ever re-signed him in the first place? As far as Koch goes, he’s still a very good punter, but you have to question whether a $2.2M salary (and a $2.8M Cap number) is just too much for a punter?

CANTY/YANDA: Both of these players are probably safe. Canty is likely safe because he simply doesn’t cost that much for the position/role he plays. Yanda, who does have a high Cap number, simply doesn’t provide a lot of pre-June 1 Cap savings, and probably deserves a mulligan for his injury-plagued 2013 campaign.

SUGGS: Now we get to the more interesting decisions. Terrell Suggs is entering the final year of his contract, is on the wrong side of age 30, and much like Anquan Boldin last offseason, represents the single easiest place to find the most Cap savings from one player. Given the Cap number and the need to address the roster in other areas, the Ravens really have two options with Suggs – contract extension or release.

A contract extension would likely keep Suggs a Raven for the rest of his career and lower his 2013 Cap number of $12.4M by a good $3-5M. Back in September, a contract extension appeared to be the more likely outcome, but after Suggs’ disappearing act for much the second half of the season, it’s now a fair question if he will return at all?

Releasing Suggs would create an immediate $7.8M in Salary Cap space and would go a long way toward creating an abundance of Cap space to address other issues.

NGATA: Ngata is another interesting situation. While there is a lot of immediate Cap space available from releasing Suggs, there is a lot more dead money to be considered when it comes to Ngata. Releasing Ngata prior to June 1 would provide only $1M in Salary Cap savings, but would cause a whopping $15M in dead money to hit against the Cap. That’s a lot of dead money and way more than most teams are usually willing to take on. Releasing Ngata after June 1 would provide a bundle of Cap savings – $8.5M – but would cause $7.5M to be pushed off onto the 2015 Cap. More importantly, though, as stated above, that $8.5M in new Cap space wouldn’t be available to the Ravens until June 2nd. By then, many of the players that they’d like to re-sign or sign as free agents would be long gone.

As such, releasing Ngata would not look like a likely proposition.

However, while Ngata has played well, the question the Ravens have to ask themselves is whether he has played well enough to be worth his 2014 base salary of $8.5M? Sometimes in these situations, it comes down to a cash situation as much as a Cap situation.

If the Ravens’ answer to that question is “No”, then they will need to decide whether to take less Cap savings, but all in 2014, or to receive more 2014 Cap saving, at the expense of $7.5M worth of 2015 Cap space. One thing to consider with a post-June 1 release, though, is that, while the $7.5M in savings is not available until June 2nd and is a sizeable amount of new Cap space to receive in June, the team could use that to sign their draft picks (who are usually now signed in May) and carry the rest into the season. Whatever is left over at the end of the season, can then be carried over into 2015 and essentially used to offset the $7.5M in dead money carried over by releasing Ngata post-June 1, thereby somewhat lessening the impact of that dead money carryover.

One other issue for both Suggs and Ngata would be the question of whether they would accept a pay cut as part of a restructured contract. This is an oft-misunderstood part of NFL contracts – rarely does a contract restructure include less money for the player. It is usually just an accounting exercise that gives the player the same amount of money, but as a bonus instead of as base salary. When players are asked to accept a pay cut, it is usually in the circumstance where the threat of release – and then signing elsewhere for less money – works in the favor of the team. Given the numbers and the status of both Suggs and Ngata, a pay cut seems very unlikely.

RICE/WEBB: In both of these cases, the dead money versus Cap savings makes a release highly unlikely. For Rice, it’s even worse, because a pre-June 1 release would actually cost the Ravens more than it would to keep him on the team. Neither would seem to be candidate for a post-June 1 release either, and it’s likely that the Ravens will give Webb another year to prove that his injured knee is the reason for his up-and-down 2013 season.

OUTLOOK: The Ravens are not in a terrible Cap situation, but still have a lot of work to do. With pending free agents like TE Dennis Pitta, OT Eugene Monroe, WR Jacoby Jones and LB Daryl Smith – amongst others – the Ravens are going to have to find a way to create the necessary Cap space to address those players and to bolster other areas of need.

Over the next several months, there will be many reports on the Ravens’ Cap status, most of which will not include many of the above factors that provide a full, realistic picture of their Cap situation. Barring an early release or re-signing of a player, the Ravens will enter the 2014 offseason with just under $7M in Cap space. From there, the Salary Cap is a puzzle, and the Ravens’ Front Office will likely use a combination of the above maneuvers to create the Cap space necessary to address the team’s many roster issues.

As always, it should be a wild ride.