Russell Street Report Salary Cap, Street Talk SALARY CAP ANALYSIS: Signs point to franchise tag for Flacco

Finding a value for a new contract for Ravens’ QB Joe Flacco has always been a problem.

Unfortunately, for Flacco and the Ravens, there’s not a really appropriate comparison contract in existence. Flacco certainly deserves to be paid more than guys like Bills QB Ryan Fitzpatrick (7 years/$62M/$24M guaranteed) and Cardinals’ QB Kevin Kolb (6 years/$63M/$12M guaranteed), but it’s questionable whether he deserves to be part of the $100M club, which includes QBs like Michael Vick (6 years/$100M/32M guaranteed), Philip Rivers (7 years/$98.5M/$38M guaranteed) and Eli Manning (7 years/$107M/$35M guaranteed).

Obviously, given the lack of a contract extension to date, it’s pretty clear that the Ravens and Flacco’s representatives have also had trouble finding an agreeable value.

As of late summer, there were reports that the Ravens’ brass was very comfortable with the offer they had on the table – which owner Steve Bisciotti had once stated was of a value that might surprise some – but that Flacco’s camp still felt that he deserved more. The reports also stated that both sides were willing to let the 2012 season play out and the Ravens were willing to increase their offer if Flacco took the next step toward proving that he was worthy of “elite QB” money.

Unfortunately, for both sides, that hasn’t come to pass – and it could be argued that Flacco’s inconsistency makes a long term deal very risky for the Ravens. It also appears that Flacco’s level of play has, at best, stagnated and, at worst, regressed.

So where does that leave the Ravens and Flacco?

Is it now even harder to find a reasonable value that both sides are willing to agree to?

The thinking here has always been that a 7 year, $90M deal, with escalators that could take it over $100M, with around $30M guaranteed would be an appropriate deal for Flacco. Or, at least, prior to this season, that seemed like a reasonable deal for both sides. Obviously, that’s slightly below “elite” money – depending on the escalators – so it’s probably under what Flacco’s camp has been looking for.

On the other hand, at this point of the season, that looks like it could be a pretty risky deal for the Ravens.

Further complicating the matter is the very large 800-pound elephant in the corner that is the fate of Offensive Coordinator Cam Cameron. While there were “arguable” reasons why the team retained Cameron over the last 2 off seasons – Lockout in 2011, a dropped pass from the Super Bowl in 2012 – there doesn’t appear to be any such justifications for retaining him after this season (short, I guess, of an unimaginable 180 degree reversal of fortune by the offense over the rest of the season).

Of course, the big question the Ravens must answer before signing Flacco to an extension this offseason is whether the stagnation/regression in Flacco, since his near Pro-Bowl season of 2010, is because of Flacco or because of Cameron? Or both.

And, unfortunately, they may not be able to truly answer that question without seeing what Flacco can do under a new Offensive Coordinator, with possibly a different offensive system.

So, now, the timing couldn’t be any worse. Here they are in late 2012, with the need for a contract extension for the best quarterback the team has ever had, but still facing the question of whether he deserves what he is asking for and if he’s even proven whether he deserves what they’ve offered him and, all the while, still fighting the lingering question of just whose fault it is that he hasn’t reached the level of play that they expected.

One thing does appear pretty clear now, though, no matter what the justifications were at the time, the Ravens really have no one else to blame, but themselves, for this quandary. By twice retaining Cameron, when there were plenty of reasons to send him packing, they have boxed themselves into quite a dilemma.

So, with all of that said, what should they do from here?

What can they do from here?

As this season has progressed, and Flacco has continued to show the inconsistency – great performances, followed by poor performances, with mind-numbing decision making – the feeling here is that perhaps the franchise tag makes the most sense for Flacco. That way, the Ravens brain trust can have an opportunity to see Flacco with a new offensive coordinator and a new offensive system, and hopefully answer, once and for all, whether Flacco is being hindered by Cam Cameron and the offensive scheme or if Flacco is actually more of a part of the problem than most think.

Now, to be clear, using the franchise tag on Flacco is not, at all, the best way for the Ravens to manage their 2013 Cap. In fact, with the franchise tag for quarterbacks, projected to be just over $14M, will put a very large crimp in the team’s ability to improve other parts of their roster. However, by franchising Flacco and, hopefully, being able to reach a final decision on him with regard to his future ceiling, they can then either sign him to the contract extension that he truly deserves or possibly go in another direction, but without any lasting Salary Cap complications.

To try and put this into numbers, if Flacco were to agree to the above suggested contract extension – 7-years, $90M, with $30M guaranteed – he would likely receive the guaranteed money in the form of a 2013 Signing bonus, a 2014 Option bonus and a 2015 Option bonus.

So, for the sake of argument, let’s say that he would receive a $20M Signing bonus and Option bonuses of $5M and $5M. With a $1M base salary for 2013, that would make Flacco’s 2013 Cap number equal $5M. Even if Flacco were to receive the entire $30M as one signing bonus, his Cap number would only be $7M. It could conceivably be structured with a larger base salary – thereby increasing his Cap number, but regardless, any first year Cap number on a long term deal is going to be pretty substantially less than projected franchise tag number of $14M+.

The 2013 Salary Cap is projected to increase only slightly over the 2012 Cap of $120.6M. The Ravens currently have $106.5M committed to the 2013 Salary Cap, but that number only includes the 37 players currently under contract, and does not include the team’s 14 RFAs and ERFAs. That number also does not include incentives and escalators that may be earned in 2012, but that will count against the 2013 Cap. Once those are added in and the RFAs and ERFAs are tendered, the Ravens will likely be very close to the $120-122M mark.

So, not only will they have little more to add players, but they will very clearly need to release some players – or restructure contracts – to make additional room to accommodate Flacco. Just how much they will need, will depend on what decision they make with Flacco.

Again, obviously a reasonable long term deal would make sense for both sides, but if Flacco’s camp is still seeking “elite” money, then the Ravens would likely be better served to use the franchise tag – however painful from a Cap perspective – and see if Flacco performs up to their expectations in 2013.

The alternative is to give Flacco a huge about of guaranteed money – $30M or so – which, if he doesn’t progress under a new Offensive Coordinator, would hamper their Salary Cap for years to come because they would essentially be stuck with him. With that amount of guaranteed money – even if it was only $20M – the player really can’t be released quickly because of the acceleration of that guaranteed money as “dead money” against the Cap. So, it is often cheaper from a Cap perspective to continue to keep the player – and continue to pay his base salaries – even though you’d rather be done with him.

So, in the long run, it may end up costing the Ravens to use the Franchise tag and then give Flacco a long-term deal, but in the end, that might be the more prudent course, in order to ensure that they have made the right decision with his contract and its impact on future Salary cap years.