Russell Street Report Salary Cap Clearing Up Confusion on Pitta Contract

Back in December, Head Coach John Harbaugh indicated that the Ravens had been told that doctors felt TE Dennis Pitta could play again and that Pitta has indicated his desire to play again in 2015.

At that time, RSR discussed the Salary Cap implications of Pitta’s future with the team in Ravens Face Tough Salary Cap Decisions. We were very clear at the time that such implications made Pitta’s return a near certainty unless he chose to retire.

More recently, Coach Harbaugh’s words haven’t been as reassuring and it appears that Pitta’s football career may be in jeopardy.

This week, there have been several stories discussing Pitta’s future, but there appears to be some confusion on the Salary Cap impact of Pitta’s release or retirement.

Short of Pitta retiring, the Salary Cap implications practically guarantee that Pitta will return if he is healthy enough to do so. In fact, the Salary Cap implications of a Pitta release are so drastic that, at worst, the Ravens will likely give their tight end the 2015 season to recover and prove he can play again.

In 2015, Pitta has a base salary of $4M and a Cap Number of $6.2M. The key factor, though is that Pitta’s $4M base salary is guaranteed, so he will be owed that $4M, even if he is released.

As such, if Pitta is released prior to June 1st, the Ravens will have $12.8M ($4M guaranteed base salary + $8.8M in bonus prorations) in dead money to account for. That means that he would actually count $6.6M more against the Cap if he’s not on the team than he would if he remains on the team.

A post-June 1 release isn’t really of much help either because, due to the guaranteed base salary, he would still count $6.2M against the Cap in 2015. So, there is no Cap relief if released post-June 1.

PITTA CONTRACT

Signed 2014: 5-year, $32.5M deal, with $16M fully guaranteed, including salaries in 2014 and 2015. Signing Bonus of $11M.

So, since Pitta is owed the $4M base salary, there’s really no reason to release Pitta. It’s more likely that if he isn’t ready to return, Pitta could very well spend the 2015 season on PUP or IR, effectively delaying any decision to potentially sever ties with him until 2016 when the Cap implications are much more favorable to deal with. This would also give Pitta’s hip more time to heal and strengthen, as opposed to his quick 5-month return in 2013.

Now, if Pitta decides to retire, things would be different.

With a retirement, the guarantee goes away and the team is relieved from having to pay the guaranteed base salary of $4M. That would mean the team would then only have $8.8M in dead money to deal with. Processing his retirement before June 1 would still not seem like a good move because it would still mean all of that $8.8M would count against the 2015 Cap. Better than $12.8M for sure, but still an additional $2.6M more than he would otherwise count if he remained on the roster.

More than likely, though, the team would process his retirement post-June 1. A retirement post-June 1 is treated the same as a post-June 1 release, but in Pitta’s case, since there would no longer be a guaranteed base salary to deal with, the team would have to take only $2.2M in dead money against the 2015 Cap (thus a Cap savings of $4M) and dead money of $6.6M in 2016.

Needless to say, none of this is ideal, but the team will have to make the best of a bad situation or, at least, try and find the least painful solution.