New CBA Allows Ravens to Control J. Smith for 5th Season

Jimmy Smith catch

Team Should Extend T. Smith Before 2014 Season

 

When the NFL owners took a hard line during the 2011 NFL collective bargaining sessions, one of their stated goals was to reduce the compensation paid to rookies and create a more reasonable rookie compensation system. The owners were ultimately successful in attaining that goal and the resulting Collective Bargaining Agreement (“CBA”) has greatly reduced “rookie compensation”.

The owners were also able to negotiate a new provision that prohibits the renegotiation of a draft pick’s rookie contract until after the completion of the player’s third (3rd) season. This provision most certainly has also helped to further control the cost of a team’s draft picks.

The 2011 draft class was the first to be drafted under the new system and that draft class is now completing its third season. As such, the provision prohibiting renegotiations has now ended and players like the Ravens’ Jimmy Smith and Torrey Smith are able to have their rookie contracts renegotiated and extended.

This is especially important for WR Torrey Smith because he is entering the final year of his 4-year rookie contract and would seem like the kind of player – and team leader – the team would like to sign long-term. Given their recent track record of being forced to use the Franchise Tag when contract negotiations have failed to produce long-term deals, the Ravens would probably be wise to complete a contract extension with Torrey prior to be start of the 2014 season.

Furthermore, if they were forced to use the Franchise Tag, the Tag for Wide Receivers is quite expensive and perhaps too steep ($11.5M in 2014) to pay for a very good, but not great, wide receiver like Torrey.

When the Ravens have extended players prior to reaching free agency, they usually have done so during the early summer months prior to training camp. Assuming the Ravens are inclined to extend Torrey, look for them to attempt to sign him in July, at which point most of their offseason roster building has been completed.

CB Jimmy Smith is also entering the 4th year of his rookie contract, but under the terms of the 2011 CBA, all first round draft picks have an automatic “5th Year Option” included in their contracts. Pursuant to Article 7, Section 7(f) of the CBA, that option, if exercised, allows the team to retain the player for a 5th year at a salary that is based on the methodology used to calculate the Transition Tag for veteran free agents.

For players chosen in the first 10 picks of the first round, the salary is the Transition Tag number (average of top 10 salaries at that player’s position) as calculated for the player’s 4th year. For picks 11-32 of the first round, the salary is the average of the 3rd through 25th highest salaries at that position for the player’s 4th year. So, while the salary is paid in the player’s 5th year, the calculation is based on the average in the player’s 4th year.

As such, this new 5th Year Option for 1st round draft picks sort of operates like a mini-Transition Tag that allows the team to retain a player for another year, but also allows the player to receive a fairly sizeable salary in return.

At this point, the amount of that 5th Year Option salary for a cornerback like Jimmy Smith is still to be determined because the trigger date for valuing the option is the close of the Restricted Free Agent signing period, which for 2014 is on May 7th. According to Albert Breer of the NFL Network, the 5th Year Option for CBs is expected to be $6.55M.

For the Ravens to retain Smith via the 5th Year Option, though, they must exercise the option by May 3, 2014. So, they must do so before seeing him play in 2014 and before they are sure he is worth it.

However, it is important to note that the 5th Year Option is guaranteed for “injury only” up until the beginning of the league year for which the option applies. So, basically, in Smith’s case, the Ravens can exercise the option by May 7th, but could conceivably release him prior to be beginning of the 2015 league year for either Cap or performance reasons, so long as he is not injured. Once the player is on the team’s roster for the 1st day of the league year of the player’s 5th year, the option salary is fully guaranteed.

While there is some risk in exercising the option (i.e. if the player suffers a serious injury), it would appear likely that most teams will be exercising their 5th Year Options, so long as the player has been living up to expectations. And in the case of Jimmy Smith, a source close to RSR has indicated that the Ravens will exercise this 5th year option.

In practice, it’s likely that the 5th Year Option will act as a trigger for a lot of contract extensions because, using Smith as the example, the Ravens would probably rather have Smith on a long-term deal, at a much lower Cap number, instead of having him play on a one-year $6.55M deal. According to the aforementioned source, if Jimmy Smith’s play in 2014 is on par with that of his 2013 season, a contract extension after the 2014 season will be earnestly pursued.

From the NFLPA’s perspective, this entire 5th Year Option provision was likely somewhat of a payback provision that allowed them to agree to such a dramatically reduced rookie compensation system.  For most 1st round picks, the 5th Year Option will pay a higher salary for that 5th year then would have occurred under the 5th year of a rookie deal under the terms of the prior CBA.

One other note regarding the renegotiation of rookie contracts – the renegotiation prohibition is only two (2) years for undrafted free agents like Placekicker Justin Tucker.

It remains to be seen whether the team would be interested in entertaining a contract extension for Tucker after just 2 seasons – especially in light of getting burned by the 2011 contract extension for Billy Cundiff (not that I’m at all comparing them as kickers) – but the possibility does now exists if they wanted to try and lock Tucker up long term.

7 Raves on “New CBA Allows Ravens to Control J. Smith for 5th Season

  1. Dev on said:

    Brian, great stuff. By keeping Jimmy for another season, the team can give themselves more time to negotiate other deals. It gives them greater cap flexibility, maybe even letting Webb’s current deal run out until they give Smith a richer contract. This is great news all-around.

  2. Joshua on said:

    I thought Jimmy signed a three year deal with a fourth year option, seeing as how he was drafted near the bottom of round one? If I am wrong, I am glad that I am. He’s certainly an ascending player.

      • Joshua on said:

        For some reason, I thought with the newest CBA that teams could sign players drafted at the end of round one to three year deals with an option for a fourth. Thanks.

        • Tony LombardiTony Lombardi on said:

          I thought the same Josh…and that’s one of the reasons we have Brian…besides of course that fact that he’s a great guy!

  3. Dev on said:

    My mistake, for some reason I thought Webb’s deal was only for 4 years. Being able to control Smith for one more year let’s the team re-evaluate both players for the long term. I’m not sure if they can afford to pay big money to two CBs. Then again, Webb could still be a candidate to transition to FS, but that’s another discussion…

  4. Ravcolt on said:

    As long as the Ravens have the flexibility to release Smith prior to Year 5 and not have dead money applied against the cap it may be worth the gamble. Even if he continues ‘improvement’, which was not hard when reviewing this first-round selection’s prior years, Smith nor his position warrants an $8 million+ salary for one year. Isn’t the concern (aside from injury) that once signed to a fifth year Smith would have the leverage on a long-term deal (read Chris McAlister), and not the Ravens?

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