The Cap Doctor
Brian McFarland answers your cap-related questions and this week he hones in on the new Joe Flacco deal and the real cap impact of Daryl Smith’s release.
Q. With his new deal now in place and the full structure reported, what is there to like about the Joe Flacco deal and what is there to dislike about the deal?
ANSWER: What’s to like about the deal is that they got it done, it reduced his $28.55M (2016) and $31.15M (2017) Cap numbers and they crafted a deal that has a far better structure than Flacco’s 2013 deal. What’s not to like is that, because of that 2013 deal, the Ravens were forced into having to do a deal three years later (even with 3 years still remaining on the prior deal).
As far as the good news goes, getting the deal done means that the team was able to address those high Cap numbers and get a more “flat” structure to the contract that should mean they can avoid having to redo the deal at any point. Most certainly, they won’t be forced into restructuring it after 3 years and doing so while providing Flacco with all of the leverage.
The “flat” structure is the key. In Flacco’s old deal, the Cap numbers ranged from $6.8M to $31.15M. The new deal has a range of $22.55M to $28.25M. This flat structure will make it easier for the team to accommodate every year of the new deal – especially in the later years as the Cap continues to increase. After all, not one year of the deal – even later in the deal – has a Cap number as high what Flacco’s 2016 Cap number ($28.55M) was set to be under his old deal (much less the $31.15M that was scheduled for 2017).
This flat structure continues the team’s more recent trend of getting away from contract with hugely back-loaded Cap numbers, in favor of this more flat structure, which avoids problems later in the deal when the player has gotten older and, while still a solid contributor, isn’t the player that he once was.
As far as the dislike part, it has nothing to do with this contract and everything to do with the prior contract and how the structure of that deal forced the Ravens to give Flacco another one just 3 years later. Because of this, and because Flacco was still due close to $60M over the remaining 3 years of his old deal, this new deal was always going to be huge. So, complaining about the size of the deal is really ignoring the economics of this big/huge QB contracts.
In 2013, the Ravens ceded all of the leverage to Flacco and his agent, Joe Linta, and this contract – and the size of the deal – were inevitable.
The Ravens could have tried to survive this year without redoing the deal and wait until next year when the leverage would have been a bit more equal (mainly, due to less dead money and more Cap savings), but that would have essentially put the Ravens out of business for 2016.
At least, they got a more friendly Cap structure which will not cause any more problems in the future.
Q. Why didn’t they get more Cap relief from the deal? Why only $6M in Cap savings?
ANSWER: This sort of goes hand-in-hand with the above question, but the main reason for only $6M in savings is that the team didn’t want lower the first year Cap number down too low, thereby creating larger Cap numbers later in the contract. Those larger later year Cap numbers can cause another Haloti Ngata type situation where the player’s Cap number is just too high, but the cost in dead money makes it very painful to release or trade.
The lower Cap savings from Flacco’s new deal would also seem to indicate that the team is going to look elsewhere to create the needed Cap space. Yesterday, we saw that with the release of LB Daryl Smith. While declining DE Chris Canty’s option was expected, Smith’s release came as a surprise to many, but the team was (and is) going to have to find Cap space somewhere.
Smith, due to his age and declining speed and coverage skill, was a likely candidate.
Q. The one who we do know that the Ravens asked to take a pay cut is Ladarius Webb. Obviously we don’t know what that cut would be so we can’t judge how likely Webb will be to agree to that. However if Webb doesn’t agree will he be cut or traded? Has there ever been a player the Ravens asked to take a pay cut who refused and stayed on the team? In the past when the Ravens asked for a pay cut it has been more of an ultimatum than a request?
ANSWER: I haven’t yet seen anything definitive that the Ravens have definitely asked Webb to take a pay cut. Recently, GM Ozzie Newsome mentioned that Webb would be a starting Safety and that they had him at a number that they were comfortable with. It’s interesting, though, that Newsome didn’t say if that was the scheduled number or newly agreed to numbers, so I guess anything is possible.
Webb took a pay cut last year and players don’t often take a second one, even if it means that they will be released and receive less elsewhere.
If a pay cut was requested and Webb declined, I would assume that he would be released. I really don’t think Ozzie messes around with this type of stuff – ask Anquan Boldin and Haloti Ngata. If Ozzie feels you are overpaid and the Cap implications of your release aren’t too painful, then I think calling Ozzie’s “bluff” means a one-way ticket out of town.
After all, while requests for pay cuts are rarely reported in the media, you have to assume that such news does get circulated within the NFL agent community. So, if a team requests a pay cut and then doesn’t follow through, every agent knows that if it happens to their client in the future, it may just be a bluff.
Q. When Daryl Smith and Chris Canty were released, you mentioned something about offsets and the Rule of 51. Can you explain that a little more in depth?
ANSWER: With offseason rosters allowed to include up to 90 players, there’s pretty much no way teams could accommodate all of those players under the Salary Cap. As such, the Rule of 51 is in place from the beginning of the league year until a couple of days before the regular season begins. The Rule of 51 dictates that during the offseason, the top 51 Cap numbers, all bonus prorations from players not in the top 51 and all dead money count against the Cap.
So, when a veteran like Smith is released, he drops out of the top 51 and a new player (formerly the 52nd player) is elevated into the top 51. So, while the Cap savings for Smith is often reported as the number that represents the savings from his release only – $2.625M – the actual impact on the team’s Cap is less than that because of the Rule of 51 offset. In this case, the player replacing Smith is making $450K, so the net impact on the Cap, taking the offset into account, is $2.175M. That is the actual impact his release has on the team’s Salary Cap.
Follow Brian McFarland on Twitter @RavensSalaryCap