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With Ngata deal done what will the Ravens do with newfound cap space?

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With yesterday’s news that the Ravens have finally signed star DT Haloti Ngata to a long term extension, the next question becomes what will the team do with the approximately $5.4M in Salary Cap space created by the signing?

The good news is that the Ravens have several options, all of which are good for the team’s future. 

First, removing the Franchise designation from Ngata allows the Ravens to use the Tag on another player in 2012.  If the team were to use the Tag next year, the most likely target would be RB Ray Rice.  Ideally, the team will have Rice signed to a long-term deal prior to needing to use the Franchise Tag, but that hopeful strategy hasn’t played out so well recently.  However, now at least, it’s an option if needed.   

As for the additional Cap dollars, they could be used by Ozzie Newsome and Pat Moriarty to extend one of the team’s young core group players, like Joe Flacco, Ray Rice or Ben Grubbs.  It remains to be seen whether the team plans to approach any of these players about a contract extension, but they now have that option. 

A Flacco contract extension doesn’t appear to be a priority for now as the team seems to be content in waiting to see how this year plays.  While it’s apparent that the Ravens signal caller isn’t going to be going anywhere and will eventually receive a contract extension, another year of performance will likely help the team, and Flacco’s agent, establish a more accurate market value for the quarterback. 

Having just signed Guard Marshall Yanda to a contract extension this past offseason, the prevailing wisdom appears to be that the team will let Guard Ben Grubbs walk after the 2011 campaign has completed. That said, given the falloff by the offensive line during this past weekend’s game in Tennessee, that wisdom may need to be reconsidered.  Regardless, it seems unlikely that the team will be willing to pay a top of the market deal to both of its guards.

That leaves Ray Rice as the most likely candidate for an extension.  He’s young and just entering his prime, and if the Ravens were willing to pay top dollar for the enigmatic Willis McGahee (in 2007), you’d think they would be even more interested in signing Rice, a consummate team player, to a long term deal.

If the Ravens choose not to, or fail to, sign anyone to a contract extension by late November, they still have options with the surplus Cap space.  As they (and many other teams) have done in the past, they can renegotiate some contracts by inserting "phony” incentives into those deals allowing them to carry any excess 2011 Salary Cap space over into 2012, thereby increasing their 2012 Cap space. 

This loophole, which existed in the prior CBA, was not closed by the new CBA, so teams still have the ability to carry excess Salary Cap room from year to year.  This is accomplished by renegotiating a contract (or contracts) during the season and writing in Not Likely To Be Earned (NLTBE) incentives. 

Normally, NLTBE incentives do not count against the 2011 Cap, but – for some reason – the CBA says that they do if they are added during the season.  As such, the full amount of those incentives immediately counts against the 2011 Cap, essentially eating up the excess Cap space.  If unearned – and they would be written so that they would go unearned – the team receives a credit the following year for those unearned incentives.  As such, that amount would be carried over into 2012 and would increase the team’s Cap space.  

So, the team has option with its newfound Cap surplus, and while it doesn’t really provide much help this season, it will be helpful as the team plans for its future. 

CAP SPACE UPDATE:  Presently, with the newly added Cap space, the team is approximately $7-8M under the Salary Cap. 

LEE EVANS’ CONTRACT:  When the Ravens acquired WR Lee Evans from the Bills in August, there were reports that the team was trying to renegotiate Evans contract to lessen his 2011 Cap number.  Based on NFLPA records, they did indeed redo his deal.  In what appears to be a simple restructure, the Ravens reduced Evans base salary down to the veteran minimum and gave him the balance as a bonus.  By doing so, the team reduced Evans’ 2011 Cap number by a little over $1.2M (although it does add $1.2M unto the 2012 Cap).  This restructure went a long way toward creating the necessary Cap space for the team to sign OT Bryant McKinnie.

Just as importantly though, this restructure blocks Evans’ ability to opt out of his contract after this season.  The CBA provides that a vested veteran (players with 4+ seasons of service) traded during the course of a long term contract can opt out during the offseason following the trade.  So, while Evans didn’t receive any more money than he was already due, he was willing to agree to the restructure to help out the team, even though it meant limiting his options in the future.  

 

One Response

  1. Nice job as usual Brian. No one, until now, explained the ability to sign McKinnie from a cap perpective.

One Response

  1. Nice job as usual Brian. No one, until now, explained the ability to sign McKinnie from a cap perpective.

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