Ravens front office fumbles an opportunity with McGahee

Salary Cap Ravens front office fumbles an opportunity with McGahee

Posted in Salary Cap
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Last week’s news that the Ravens would release RB Willis McGahee was really of no great surprise.  For quite awhile, it had been a foregone conclusion that the Ravens were not going to pay McGahee’s 2011 base salary of $6M.

This $6M base salary was part of the (over)generous 7-year, $40.12M contract that the Ravens gifted McGahee upon acquiring him from the Buffalo Bills in March of 2007.  At the time, the contract raised eyebrows amongst many because McGahee had not proven worthy of such a top of the market kind of deal.

Unfortunately for the Ravens, McGahee never proved worthy of their faith and the deal quickly became a Salary Cap albatross.

Now, with McGahee’s release, that contract has again come back to haunt the team, but, even more troublesome, the actions – or, in this case, inactions – by the Ravens’ Front Office has made the situation even worse.

McGahee’s release last week caused the team to have to account for $2.5M in dead money against the 2011 Salary Cap and $3.75M against the 2012 Cap. However, the team could have totally avoided all of those cap charges if it had been more proactive back in March.

As first explained in this column in March of 2010 and again this past February the Ravens had an opportunity to take advantage of a loophole in the “uncapped year” rules that governed the 2010 league year and had they released McGahee this past February/March, they would have been able to clear McGahee off the books totally without any future Salary Cap implications.

From our March of 2009 column:

  • However, there is a technicality that the Ravens may be able to use to avoid those future Cap charges, assuming that the new CBA that brings back the Salary Cap for 2011 does not have some sort of retroactive application.
  • The NFL’s league year is not based on the calendar year, but runs from the first Friday in March to the first Thursday of March in the following year.  Therefore, the 2010 league year runs from March 5, 2010 to March 3, 2011.  If you may recall, last month the Miami Dolphins tried to release LB Joey Porter, but had to rescind the move because they were still technically in the 2009 league year (which didn’t end until 11:59:59 on Thursday, March 4th) and they didn’t have enough 2009 cap space to take on the cap hit caused by Porter’s release.
  • So, the loophole that appears to exist is that the “league year” does not expire until after the season is over.  That would mean, at least as the rules are currently written, that the Ravens could – and this is perhaps what they are planning on doing – keep McGahee this year and then release him before the 2010 league year ends next March 3rd.  As such, a February/March 2011 release would still "count" against the 2010 league year, which is uncapped.  It would essentially have the same effect as releasing him now – but they’d have his services for the 2010 season.

It now appears that we may have given the Ravens’ too much credit.  They did retain McGahee for the 2010 “uncapped year”, but they did not release him prior to the expiration of the 2010 league year on March 3, 2011.

Had they done so, as we had suggested, they could have accelerated the remaining unaccounted-for bonus prorations ($6.25M) into the 2010 league year.  With the team presently being so close to the new $120.375M Salary Cap, that extra $2.5M would be very useful.  It would also have allowed them to avoid having to carry $3.75M against the 2012 Cap.

The only question we had at the time was whether the new CBA would somehow retroactively address and close the loophole.

It didn’t.

The 2011 Transition Rules, which govern how the 2011 league year will be conducted, states in Section 5(b):

Proration from Preexisting Contracts.  For Preexisting Contracts, any proration under the Salary Cap rules under the Prior Agreement (including amounts treated as signing bonus) to any League Year covered by this Agreement shall continue to be charged to Team Salary for those League Years, provided that (i) no signing bonus prorations to the League Years of this Agreement shall apply for any Preexisting Contract that was terminated, traded or assigned via waivers prior to March 11, 2011……..

So, the Ravens – as we had urged – could have released McGahee prior to March 11, 2011 and avoided taking any Cap hit from his release.

Now, to be fair, as the rash of releases over the last 2 weeks has shown, a lot of teams failed to take advantage of this loophole.  Further, it can be argued that the team, perhaps, felt that there would be some retroactive closing of the loophole.  However, given that there was no way the team was going to pay McGahee $6M this year – even if it had been another uncapped year – there was no reason for them to not release McGahee and hope to take advantage of the possible loophole.

They didn’t…………and they should have known better.

Again, wouldn’t that extra $2.5M make life a little easier for the team right now? 

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Brian McFarland

About Brian McFarland

Known on Ravens Message Boards as "B-more Ravor", Brian is a life-long Baltimorean and an avid fan of the Ravens and all Baltimore sports.  A PSL holder since 1998, Brian has garnered a reputation as a cap-guru because of his strange (actually warped) desire to wade through the intricacies of the NFL's salary cap and actually make sense of it for those of us who view it as inviting as IRS Tax Code.      Brian, who hails from Catonsville, MD and still resides there, is married and has two children. More from Brian McFarland

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