Can the Ravens and Ray Rice agree on market value by Monday?

foster_rice

By now, everyone knows that the Ravens need to reach a long-term deal with their Franchise Player, RB Ray Rice, by 4:00 EST on Monday.  If they fail to do so, the league’s CBA prohibits them from signing him to a long-term before the end of the league year (which is next March).  That would mean that they would either have to again use their Franchise Tag on him next year or allow him to become an Unrestricted Free Agent (UFA) before possibly re-signing him.

There have been a lot of reports that Rice is seeking a sizeable contract in the range of the deals signed by Vikings’ RB Adrian Peterson and Titans’ RB Chris Johnson.  Reports also say that the Ravens would be willing to sign Rice to a deal close to those signed by Texans’ RB Arian Foster and Eagles’ RB LeSean McCoy. 

So, to better gauge those positions, let’s take a look at the breakdown of the deals signed by Johnson, Foster and McCoy (Peterson’s deal, though, is so far outside the realm of reality that it isn’t even worth discussing). 

Chris Johnson

•6 years/$56M – $9.33M yearly average

•$30M guaranteed

•$10M Signing Bonus (guaranteed)

    • 2011 – $3M base (fully guaranteed) – Salary Cap number – $5M
    • 2012 – $8M base (guaranteed for injury only) – Salary Cap number – $10M
    • 2013 – $10M base ($9M guaranteed for injury only)
    • 2014 – $8M base
    • 2015 – $8M base
    • 2016 – $7M base + $2M Roster Bonus

1st year payout – $13M

2-year payout – $21M

3-year payout – $31M

 
Arian Foster
 

•5 years/ $43.5M – $8.7M yearly average

•$20.75M guaranteed

•$12.5M Signing Bonus (guaranteed)

    • 2012 – $5M base (guaranteed) + up to $500K in games played Roster Bonuses ($31,250/game) – Salary Cap number – $8M
    • 2013 – $5.25M base ($3.25M guaranteed) + up to $500K in games played Roster Bonuses – Salary Cap number – $8.25M
    • 2014 – $5.75M base + up to $500K in games played Roster Bonuses
    • 2015 – $6M base + up to $500K in games played Roster Bonuses
    • 2016 – $6.5M base + up to $500K in games played Roster Bonuses

1st year payout – $17.5M

2-year payout – $23.75M

3-year payout – $30M

 
LeSean McCoy
 

•6 years/ $45.615M – $7.6M yearly average

•$20.765M guaranteed

•$8.5M Signing Bonus (guaranteed)

    • 2012 – $615K base (fully guaranteed) – Salary Cap number – $2.657M
    • 2013 – $3M base (fully guaranteed) + $100K workout bonus + up to $150K in games played Roster Bonuses ($9,375/game) – Salary Cap number – $4.95M
    • 2014 – $7.65M (fully guaranteed) base + $100K workout bonus + up to $250K in games played Roster Bonuses ($15,625/game)
    • 2015 – $9.75M base ($1M fully guaranteed) + $250K workout bonus + up to $250K in games played Roster Bonuses
    • 2016 – $6.9M base + $250K workout bonus
    • 2017 – $7.6M + $250K workout bonus

1st year payout – $9.115M

2-year payout – $12.365M

3-year payout – $20.365M + $1M future guaranteed payment

 
When put side-by-side-by-side, two things are readily apparent – (1) the overall picture of Johnson and Foster deals aren’t really that dissimilar and (2) the Eagles, once again, got a great deal – they will use up McCoy for the next 3 years and then be able to jettison him before having to pay him big money in 2015.

Needless to say the Ravens would probably like to see Rice agree to a deal similar to McCoy, but it’s pretty apparent why Rice would be aiming higher. 

While the total value and the yearly average for Johnson’s deal are greater – and sounds better for his agent – the key issues for the player and the team are the guaranteed money and the 3-year payouts. 

For both Johnson and Foster, those figures taken together greatly outweigh those in McCoy’s deal, further seemingly distancing that deal from the former ones. 

So, that would seem to leaves us with the Johnson and Foster deals.

Initially, it would appear that the biggest difference between those 2 deals is the amount of guaranteed money – $30M for Johnson, $20.75M for Foster.  However, the reported $30M is guaranteed money for Johnson is grossly overstated because only $13M of the $30M is actually “fully” guaranteed, while the other $17M is guaranteed against “injury only”, meaning that Johnson can be cut for any reason, other than when he is injured.

For Foster, it is unclear whether his reported $20.75M in guaranteed money is “fully” guaranteed or guaranteed for “injury only”, but the bottom line is that he will, between his Signing Bonus and base salary receive $17.5M in 2012, so that much of it is certainly functionally guaranteed.  The size of his signing bonus, though, also pretty much functionally “fully” guaranties his 2014 base salary because of the cost of releasing him so early into the deal.

This is why another metric – the 3-year payout – is so important.  Given the signing bonuses involved, it’s unlikely that any of these RBs are going to be released until at least the completion of the 3rd year of their contracts.  Because of this, the player’s main consideration, after guaranteed money, is – “how much – at a minimum – am I going to make before I can be released”.

This is where the deals for Johnson and Foster greatly outweigh McCoy’s deal (although all of McCoy’s 3-year payout is truly “fully” guaranteed) and reflects the reality that McCoy was still one year away from being able to negotiate as either a RFA (like Foster) or UFA (like Rice, prior to the Tag) and was without a great deal of leverage to force a better deal. 

As for the main difference between Johnson’s and Foster’s deal, the other main difference is the structure.  Foster’s deal is of a flat nature where the yearly Cap numbers will remain relatively the same, with only slight increases from year to year.  Johnson’s, on the other hand, increases over the first 3 years, before flattening out over the last 3 years of the deal.

So this brings us to Ray Rice. 

To date, Rice’s agent and the team have been unable to find common ground and don’t appear to be anywhere close.  Now, time is running out.  The last 2 times the Ravens had players under the Franchise Tag (Terrell Suggs in 2009 and Haloti Ngata last year), we heard much the same thing, but both ending up being signed to long-term deals just before the deadline.

So, there is hope.

However, the position of running back does have its own set of issues and qualifications when it comes to contract terms, so it is very possible that, this time, a deal won’t be struck.  In general, the NFL has become about passing offense and the role of the “lead” back has been diminished.  Add to that the addition of rookie 3rd round pick Bernard Pierce, a tight Salary Cap (the structure of Foster’s deal would not give the team any Cap relief) and the specter of a contract extension for QB Joe Flacco and the possibility for no deal becomes more real.

For what it’s worth, there is one other means of comparison added to the above contracts that has yet to be discussed – 2-year payout.  This number is relevant because it is a means of comparison between those contracts and what it would cost the Ravens to use the Franchise Tag on Rice for the next 2 season. 

This, of course, assumes a contract extension for Flacco at some point, otherwise, Flacco will be the one getting the Franchise Tag next year.  This, perhaps, is Rice’s biggest bargaining chip – the uncertainty over the Flacco negotiations and the possible need for additional Cap space to accommodate a new Contract for Flacco.  It also may be something that Rice (and his agent) are willing to gamble on – play this year under the Tag, have a great year and hope for unrestricted free agency next year, and if not, then look to sign a long-term deal.

If Ravens do franchise Rice again next year, he would be entitled to a 2013 salary of 20% more than the $7.742M he is presently set to make this year under the Franchise Tag.  That would bring a 2-year payout of just over $17M ($17.032M).  From a cash perspective, this number falls below that of Johnson ($21M) and Foster ($23.75M).  From a Cap perspective, it is greater than those of Johnson ($15M) and Foster ($16.25M), but not greatly so.

So, the question for the Ravens is whether it would be better to simply use the Franchise Tag on Rice for 2 years and, in theory, get the best from him over those 2 years, and then let him walk or then sign him to a contract for a RB, who is likely headed toward the later part of his “lead” RB days.

Based on the above contract numbers, if Rice is seeking “Johnson” money, which really isn’t that much different than “Foster” money, the concept of using the Franchise tag on him twice, really isn’t that far-fetched of any idea. 

Given Rice’s status in the community and with his teammates, is likely that the Ravens would rather not have to go in that direction, but it is viable option (both from a cash and cap standpoint) if a middle ground on a contract cannot be reached.

 

This entry was posted in Salary Cap Analysis by Brian McFarland. Bookmark the permalink.

About Brian McFarland

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...more

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