The Salary Cap Impact of Ray Lewis’ Retirement

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While the emotional impact of today’s news that Ray Lewis is going to retire after this season has yet to truly sink in, the 2013 Salary Cap ramifications are much easier to discern.

For Salary Cap purposes, the retirement of a player is treated exactly the same way as the release of a player – his Salary Cap number is reduced by any remaining unaccounted for yearly bonus prorations.

In 2013, Lewis, in the 5th year of the 7-year contract he signed in March of 2009, was scheduled to have a Salary Cap number of $7.3M.  That $7.3M included his base salary of $5.4M and the 2013 portion of his bonus prorations of $1.9M.

By virtue of Lewis’ retirement, the team is relieved of having to pay his base salary of $5.4M, but will still have to account for the $1.9M in 2013 bonus prorations and will have the 2014 and 2015 shares ($650K and $400K respectively) of his bonus prorations accelerate against the Cap and count against the 2013 Cap.  That will leave the team with $2.95M in dead money that will count against the 2013 Cap.

So, the Ravens will have a 2013 Cap savings of $4.35M ($7.3M – $1.9M – $650K – $400K) from Lewis’ retirement.

The Ravens could process Lewis’ retirement as a post-June 1st transaction, which would create $5.4M in 2013 Cap space, but that would push $1.05M in dead money into 2014 and, more importantly, the 2013 savings of $5.4M wouldn’t be available to the team until after June 1.  That approach seems unlikely because the team will need that Cap space in March, not June, and the team his been hesitant in recent years to push much dead money forward into future years.

Ray Lewis’ void – from both an emotional and physically standpoint – will be hard to fill, but from a Salary Cap perspective, will create much needed Cap space for a team that expects to be very tight against the 2013 Salary Cap.

6 Raves on “The Salary Cap Impact of Ray Lewis’ Retirement

  1. Joe on said:

    Part of me still thinks a piece of this decision was Steve B or Ozzie talking to Ray and letting him know that if he came back, he’d either be cut or asked to reduce his salary due to the cap. Ray isn’t going to stick around for another team, and if he knows he’s starting to push the edge of his abilities, it gives the Ravens one final gift of Ray Lewis that he saves them some money and some face by not having to cut your franchise guy.

  2. Ebuhuel on said:

    I can’t believe Ozzy and Steve pushed him, Ray is getting old as linebacker as most players as ilb won’t even play that long. His sons carreer is getting seriouser as well and Ray wants to be there for his family. And he must see aswel that he doesn’t have the speed and power anymore to compete at top level. And last the injuries are becoming worse and longer and all the while the team picks up the slack pretty well (4 weeks last season and 10 weeks this season.) I think it is pure Ray’s decision.

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