Russell Street Report Salary Cap Ravens Cap Issues Set up Busy Offseason

Ravens 2015 Offseason Preview

After a year of great turmoil, the Ravens saw their season come to an end during an exciting 35-31 loss to the top seeded New England Patriots. Given what they had to overcome – from the Ray Rice controversy, the Haloti Ngata suspension and having 19 players on Injured Reserve – the Ravens fought hard all season, won their first ever playoff game against Pittsburgh (in Pittsburgh, no less) and took what was probably a better Patriots team to the brink.

Now comes another offseason of change. While the team doesn’t have a huge number of pending free agents, they do have some holes to address. Unfortunately they won’t have a lot of Cap room to do so.

So, with that in mind, here’s a look at the Ravens’ 2015 Free Agency and Salary Cap status:

PLAYERS UNDER CONTRACT

The Ravens presently have the following 41 players under contract for 2015 (with Cap Numbers indicated):

QBs (1): Joe Flacco ($14.55M)

RBs (3): Bernard Pierce ($799K); Kyle Juszczyk ($660K); Lorenzo Taliaferro ($585K)

WRs (5): Steve Smith, Sr. ($4.167M); Jacoby Jones ($3.375M); Marlon Brown ($587K); Michael Campanaro ($527K); Jeremy Butler ($511K)

TE (2): Dennis Pitta ($6.2M); Crockett Gillmore ($637K)

OL (8): Eugene Monroe ($7.7M); Marshall Yanda ($8.45M); Jeremy Zuttah ($3.7M); Kelechi Osemele ($1.045M); Gino Gradkowski ($781K); Ricky Wagner ($621K); John Urschel ($546K); James Hurst ($513K)

DL (7): Haloti Ngata ($16M); Chris Canty ($3.327M); Brandon Williams ($714K); DeAngelo Tyson ($672K); Kapron Lewis-Moore ($607K); Timmy Jernigan ($996K); Brent Urban ($585K)

LBs (8): Terrell Suggs ($6.2M); Elvis Dumervil ($7.375M); Daryl Smith ($3.375M); Courtney Upshaw ($1.685M); Arthur Brown ($969K); Albert McClellan ($1.2M); CJ Mosley ($1.997M); Zach Orr ($511K)

CBs (4): Lardarius Webb ($12M); Jimmy Smith ($6.898M); Asa Jackson ($696K), Chris Greenwood ($585K)

S (2): Matt Elam ($1.846M); Terrence Brooks ($677K)

ST (1): Sam Koch ($3.1M)

The above 41 players are under contract for a total Salary Cap commitment (which includes dead money from players no longer on the team) of just under $138M. (LINK to 2015 Salary Cap Spreadsheet).

Initial projections estimated that the 2015 Salary Cap would see an increase of $10M, moving the Cap up to around $143M. However recent reports indicate that the NFL has informed teams to expect the Cap to end up somewhere in the $138.6-$141.8M range. That range does seem a bit low and last year the NFL made a similarly conservative estimate, only to see the Cap increase from $123M to $133M. The Ravens will be hoping for a Cap more in the $143M range.

Using the figure of $141.8M for the estimated Salary Cap, the Ravens will initially have just $3,941,483 in Cap space.

This is the number that the initial estimates of the Ravens’ Salary Cap will be based on, but, again, it’s important to remember this number is based on only the present 41 players under contract and nowhere near representative of the team’s Cap with a full roster.

So, between now and March 10th at 4:00 p.m., when the new league year and free agency begin, 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. This year may be a bit different though, as due to the changes to the Practice Squad eligibility rules, several players with more experience – and hence higher 2015 minimum salaries – are currently holding several of the Practice Squad spots.

The announcement of those signed will likely come in the next couple of days.

The 11 players currently on the Practice Squad (or the Practice Squad IR) are:

OT – Marcel Jones

WR – Alec Lemon

OL – Nate Menkin

CB – Quinton Pointer

RB – Tauren Poole

TE – Allen Reisner

WR – Aldrick Robinson

TE – Konrad Rouland

FB – Keiro Small

OT – Joe Unga

QB – Keith Wenning

Most of these players will be re-signed to one-year contracts of $435K. Based on already having an accrued season in the NFL, Quinton Pointer and Joe Unga would receive one-year contracts of $510K. Allen Reisner and Aldrick Robinson would both be eligible for $660K contracts.

2014 SALARY CAP CARRYOVER:

Under the CBA, teams are now allowed to carry over excess Salary Cap space from one year to the next. The Ravens finished the 2014 season with $5,791,927 in excess Cap space and have carried that over into 2015.

OTHER SALARY CAP ADJUSTMENTS:

WORKOUT BONUS ADJUSTMENT: All teams will have an adjustment of $561,600 added to their Cap for team workout bonuses. This number is essentially the total amount of CBA mandated workout bonuses that could be earned by the players in the offseason. This amount is a debit from the Cap. Once training camp begins, this debit will be removed and the actual amount of workout bonuses earned by the players will be added onto the Cap.

GRIEVANCES: The Ravens do have 3 pending grievances – Ray Rice for his release and TE Matt Furstenberg and WR Mike Willie for injury grievances. Under the terms of the CBA, 40% of the amount grieved counts against the Cap until the grievance is decided or settled. If resolved after the season, the team will receive a credit or debit adjustment on the following year’s Cap. Those 3 grievances counted a total of $1,654,165 against the 2014 Cap (Rice for $1,411,765; Furstenberg and Willie $121,200 each). So, once all of the grievances are resolved, the Ravens could receive anywhere from a $1,654,165 credit against the Cap (creating that much additional Cap space) or a debit against the Cap of up to $2,481,247 (meaning that much less in Cap space).

Rice’s grievance is obviously the big ticket item of the three and Aaron Wilson of the Baltimore Sun has reported that the hearing on that grievance is set for January 15th, so that matter should be resolved well before the beginning of the 2015 league year on March 11th.

INCENTIVE ADJUSTMENTS: The Ravens’ 2015 Cap will also see adjustments for incentives earned that didn’t count against the 2014 Cap (“Not Likely To Be Earned” incentives) that were actually earned and incentives that did count against the 2014 Cap (“Likely To Be Earned” incentives) but weren’t earned.

The total of these incentive adjustments are usually not disclosed until the beginning of the 2015 league year in March.

One incentive that is known is Elvis Dumervil’s one-time 12+ sack incentive that earned him an additional $1M bonus when he reached that statistical milestone (which also raised his remaining base salaries by $1M).

2011/2012 CAP ADJUSTMENT REPAYMENT: When the new CBA was agreed upon in 2011, the Salary Cap saw a reduction and, for a few years, stagnation. Foreseeing this, the terms of the CBA allowed for teams to borrow ($3M in 2011; $1.5M in 2012) against future Caps, but forced teams to repay that amount during the 2014 through 2017 league years. The CBA leaves it up to the team to decide when to repay those amounts. In 2014, the Ravens repaid $1.125M of that amount. This amount, 1/4th of the $4.5M due to be repaid, would seem to indicate that the team intends to repay that amount each year from 2014 to 2017. So, if they follow that pattern, the team will have a negative adjustment to the 2015 Cap of $1.125M.

On the other hand, given how tight against the Cap it appears that the Ravens will be, the team could opt to not take that hit for this year. So, this is a “to be determined” adjustment.

PROVEN PERFORMANCE ESCALATOR: As explained HERE last week, it appears that Guard Gino Gradkowski reached the CBA-mandated Proven Performance escalator and will see his base salary increase by $886K. Given that Gradkowski is now 3rd string, this escalator may well price Gradkowski off of the Ravens roster in 2015.

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 ($585K, $510K or $435K). Once tendered, these players are fully under the team’s control and are not free to negotiate with other teams.

The Ravens have 12 players who are Exclusive Rights Free Agents (ERFAs):

S – Anthony Levine ($585K)

S – Brynden Trawick ($585K)

LS – Kevin McDermott ($585K)

CB – Rashaan Melvin ($585K)

WR – Kamar Aiken ($510K)

G – Ryan Jensen ($510K)

DT – Steven Means ($510K)

TE – Philip Supernaw ($510K)

CB – Tramain Jacobs ($435K)

LS – Patrick Scales ($435K)

RB – Fitz Toussaint ($435K)

DT – Casey Walker ($435K)

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 pick – $3.465M (est.)

2nd Round Tender: allows the team to receive compensation of 2nd round pick – $2.434M (est.)

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 – $1.526M (est.)

The above Tender amounts are just estimates at this point. 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%. An increase in the Salary Cap from $133M to $141.8M would represent a 6.6% increase in the Cap, so the above estimates for the RFA tenders are based on a 6.6% increase over the 2014 RFA tenders.

The Ravens have 4 players who are Restricted Free Agents (RFAs) – with original draft round indicated:

S – Will Hill (undrafted)

DT – Christo Bilukidi (6th round)

PK – Justin Tucker (undrafted)

DE – Lawrence Guy (7th round)

Over the years, the Ravens have usually tendered all of their RFAs, but in the more recent past, 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 $660K.

Given his undrafted status, it would be a huge surprise if PK Justin Tucker didn’t get the 2nd round RFA Tender. S Will Hill could also very well receive the 2nd round RFA Tender.

DT Christo Bilukidi and DE Lawrence Guy are candidates to be non-tendered and re-signed for the veteran minimum, although, it’s probably more likely that Guy gets the low RFA Tender.

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.

PROJECTED ADJUSTED TEAM CAP AND RULE OF 51 SALARY CAP COMMITMENT:

Based on all of the above, it is estimated that the Ravens will have an adjusted Team Salary Cap of $146.030M. The team’s adjusted Cap consists of the projected league Salary Cap of $141.8M, plus the carryover of the 2014 excess Cap space of just under $5.8M, less adjustments for workout bonuses and the other presently known adjustments (Dumervil’s NLTBE sack incentive).

So, if the team signs and tenders all of their PS players, ERFAs and RFAs, and prior to the team making any other roster moves (releases or retirements) or the restructure of any contracts, the team will have 68 players under contract.

During the offseason, though, when roster can balloon to up to 90 players, only the highest 51 Salary Cap numbers (and all 2015 bonus prorations and all dead money from released players) are counted for Salary Cap purposes.

The Ravens’ Rule of 51 number – again, if they re-sign all PS players and tender all RFAs and ERFAs – would be a Cap commitment of just over $150M. See the “projected Rule of 51 Cap”.

That would leave the Ravens projected cap number to be $4.3M OVER the Salary Cap. This is obviously, the worst case scenario and they will likely release/non-tender some players and restructure some contracts in order to get under the Cap.

Still, this underscores just how tight their Cap will be and just how much work they will need to do to just to get under the Cap (much less making room for acquisitions).

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 10th at 4:00 p.m.:

CB – Antoine Cason

DT – Terrence Cody

LS – Morgan Cox

TE – Owen Daniels

RB – Justin Forsett

CB – Danny Gorrer

LB – Pernell McPhee

S – Jeromy Miles

G – Will Rackley

OT – Jah Reed

CB – Aaron Ross

WR – Torrey Smith

S – Darian Stewart

QB – Tyrod Taylor

2015 DRAFT PICKS

The Ravens are expected to have 9 picks in the 2015 NFL Draft. They have their original 1st through 4th round picks. They also have Dallas’ 6th round pick, which was exchanged for the Ravens’ 7th round pick in the Rolando McClain trade, and Miami’s 7th round pick from the 2012 Bryant McKinnie trade. They traded their 5th round pick (TB for Jeremy Zuttah) and their 6th round pick (Cleveland for Michael Campanaro).

The Ravens can expect 3 Compensatory draft picks for free agent losses. The Ravens lost 4 qualifying UFAs (Arthur Jones, Corey Graham, Michael Oher and James Ihedigbo) and signed just one (Darian Stewart). Several UFAs lost (Ed Dickson) are likely to not qualify. Players released either by the Ravens (Jameel McClain) or their prior club (Steve Smith, Owen Daniels, Justin Forsett) do not qualify under the Comp pick formula.

The best guess at this point would be to expect the Ravens to receive Comp picks in the 4th, 5th and 6th rounds.

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/trade/retirement (all basically treated the same for Cap purposes) 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 enter 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 (Ray Rice was a post-June 1 release this past year, but, I think we can all agree that that was a unique circumstance).

NGATA: Perhaps, the biggest offseason decision the Ravens have will revolve around one of the team’s biggest players – DT Haloti Ngata. Simply put, Ngata is not going to be playing for the Ravens next season with a $16M Cap number. While Ngata did have a pretty decent bounce back year in 2014, it was a season marred by a PED suspension and questions about how much the PEDs could have contributed to his rejuvenation. Prior to the suspension, it appeared that Ngata was in line for a contract extension like LB Terrell Suggs received last offseason. Suggs and the Ravens were able to reach a deal that will keep Suggs a Raven for the rest of his career and allowed the team to greatly lessen his Cap number.

So, the decision for the Ravens is whether to release Ngata and gain $8.5M in much needed Cap relief or sign him to an extension, thereby keeping him a Raven, while also creating Cap relief in the $4-5.5M range.

CANTY: DE Chris Canty indicated on Sunday that he will take some time to consider retirement. If he retires, the Ravens would gain $2.66M in Cap space. Canty isn’t exactly a terribly expensive player, so if he decides to return, he won’t be terribly costly, but much of that decision from the Ravens standpoint will depend on how Ngata’s contract situation plays out and how comfortable the Ravens are with the injury prognoses for returning defensive lineman Brent Urban and Kapron Lewis-Moore.

PITTA: As explained more thoroughly here in December, it is highly unlikely that the Ravens will release TE Dennis Pitta because his 2015 base salary of $4M is fully guaranteed. Because of this, the Ravens are going to owe him that $4M whether he’s on the team or not (unless Pitta retires), so it’s very likely that the Ravens keep Pitta around – even if on IR or PUP – and make a more timely decision on Pitta in 2016.

WEBB: CB Lardarius Webb had a poor season and has put together a long injury history (although he did play through the entire season with a back injury). Those two things are often the signs of a player who is about to be released. However, Webb’s Cap hit in 2015 is so sizeable that it’s likely that he will be back next year. The Ravens could also ask Webb to take a pay cut and, if he declines, look to release him post-June 1st.

KOCH: Punter Sam Koch had a bit of a bounce back season, but will have a Cap number of $3.1M in 2015. That very well be too much for a Punter on a team that is tight against the Salary Cap. The Ravens could create $2.5M in Salary Cap space by releasing Koch. If, on the other hand, the Ravens do not want to part with Koch, a contract extension would seem to make a lot of sense. That would allow the team to keep a very good Punter around, while lessening that Cap number.

YANDA: Coming off of a Pro-Bowl season, Guard Marshall Yanda is also a great candidate for a contract extension. Much like Ngata and Koch, an extension would allow the team to keep a valuable player, while lessening his 2015 Cap hit.

JACOBY JONES: There is not a lot of Cap relief from releasing Jacoby Jones prior to June 1st, but given Jones’ drop down the WR depth chart and his somewhat inconsistent year returning kicks, it has to be asked whether there is a place for Jones on the 2015 Ravens. If the Ravens decide to part ways with Jones, it is likely a post-June 1 release would be in order.

OUTLOOK

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. Those reports will likely make it look like the Ravens are in decent shape Salary Cap-wise. Unfortunately, as the above information shows, the team has a lot of work to do.

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 pressing roster issues.

As always, the months of February, March and April will be an interesting time for the Ravens.

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