THE COST OF RE-SIGNING TERRELL SUGGS

Salary Cap THE COST OF RE-SIGNING TERRELL SUGGS

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Recent media reports have indicated that the Ravens have kicked off negotiations with Pro-Bowl DE/LB Terrell Suggs.  That is good news for Ravens fans who were saddened (some angered) by the departure of Adalius Thomas.  The prevailing feeling has been that the Salary Cap was basically forcing the Ravens to choose between Suggs and Thomas and that the team had opted to go with the younger player.  Still, without a new contract for Suggs, the possibility of losing him to free agency next offseason – especially after already having “sacrificed” Thomas this offsesason – is a scenario that few Ravens fans could stand.
 
Fortunately for the fans, history is on their side given the Ravens Front Office’s track record of re-signing their core players to lucrative (sometime too lucrative) extensions during the summer prior to their free agent year.  When Ozzie and Co. make it a priority to re-sign a player, they have yet to fail to get their man.  Still, given the skyrocketing prices in the Free Agent market this past offseason, re-signing a young, talented star like Suggs is not going to be an easy process.  It’s probably fair to simply say that it’s going to take awhile.  And, there is no doubt that the team is going to have to pony up in a way it has yet to do in its history.  Suggs’ new deal is likely to eclipse every contract the team has ever recorded on its payroll ledger. 
 
So, just how big is Suggs’ new deal going to be? 
 
Well similar to court cases, precedent is often an indicator of how these negotiations might unfold.  Precedent in the case of Terrell Suggs could be in the form of Saints’ DE Charles Grant.
 
When the Saints re-signed Grant a few weeks ago, they provided the first glimpse of what Suggs’ new deal could look like, except for two very important distinctions – Suggs (age 24) is 4 years younger than Grant (age 28) and Suggs is arguably the better player.  In 4 seasons in the league, Suggs has registered 40 sacks, while Grant only has 36 in his 5 seasons.  Suggs has been remarkably consistent, having sack totals of 12, 10.5, 8 and 9.5, while Grant has only had 8.5 sacks over the past 2 seasons.   Their other numbers – tackles, forced fumbles, etc. – are pretty similar. 
 
The reported terms of Grant’s contract are a 7-year, “up to” $63M deal with $20M in guaranteed money, payable in a signing bonus and a 2008 option bonus.  The exact amount of each has not been reported.  Judging from his base salary information reported on the NFLPA website, it would appear that the deal is heavy with incentive bonuses and escalators since the base salaries, plus the $20M in reported bonuses only adds up to a little less than $45M.  This would explain the reports that the deal is “up to” $63M – meaning he is going to have to earn that additional money. 
 
Reportedly these bonuses and incentives are tied to sack totals and Pro-Bowl appearances, but the exact criteria has not been reported. 
 
I think it’s fair to say that Suggs’ deal will be bigger.  He’s younger, better and still appears to have room to improve.  His ceiling is clearly higher than Grant’s (which makes you wonder how many teams are kicking themselves for letting Suggs’ “slow” 40 time influence them to pass on him?). 
 
As such, his bonus money is likely to be more in the $24-25M range on a 7-year deal (and perhaps bigger).  That’s a lot of bonus money, but seasoned pass rushers are paid handsomely, and with the new economics of the NFL, it’s the price you have to pay.
 
The actual structure of the deal isn’t as important, since the base salaries are likely to increase over the terms of the deal.  The Ravens have always favored split bonuses, so the bonus money would likely be paid in 2 or 3 installments in 2007, 2008 and perhaps 2009.  Suggs is already counting $6.463M against this year’s cap, so any new contract will reduce that cap number since $5M of that is base salary (the other $1.463M is pro-rated bonus money that will count against the cap no matter what). 
 
So, for instance, if they gave him a $24M bonus with $14M this year and $10M next year, then his new cap number for 2007 would be $4.341M ($14M/6 years + $545K base salary + $1.463M pro-rata shares of previous bonuses).  That would create an additional $2.122M in cap space for this year (whether they really need it or not remains to be seen). 
 
However, one potential complicating factor in all of this is that Suggs is presently due that $5M in salary which he essentially earned based an escalator in his rookie contract for registering 40 sacks in his first 4 years.  An argument can be made that he is already due that money since he earned it, in addition to a signing bonus in the range of $24M or so.  As such, some of that cap savings in the scenario above could be used as a roster bonus or base salary which would get him more money now, but not have much an effect on the Ravens cap since it would basically be a wash with his present cap number (assuming that the team has enough remaining cap space for whatever else needs to be done at this point of the offseason). 
 
Also, Grant’s deal appears to contain a lot of fluff via incentives and escalators – $18M worth to be exact.  As such, it’s a bit difficult to ascertain the true value of Grant’s deal.  Similarly, Grant will likely not be receiving his $8M base salary in 2013 when he is 35 years old.  On the other hand, Suggs will only be 31 in the last year of a new 7-year deal, so he’s more likely to fulfill the term of his new contract.  Therefore, Suggs’ new deal is less likely to contain as much fluff as Grant’s deal probably has.  Further, over the years, the Ravens have seemingly moved away from incentives and escalators when re-signing their veteran players.  Usually, such deals are straight bonus plus base salary, without a lot of variables. 
 
All that said, in the end, Suggs’ deal is going to get done.  The Ravens track record suggests as much.  Even with Chris McAlister, despite the maturity and attitude issues which forced the team to wait, they ultimately got him done as well.  Suggs will be no different.
 
However, if the bargaining does somehow go in another direction, they will, in my opinion, franchise him.  The Ravens cap situation is going to be tight again next year, but in the end I highly doubt that they are going to let Suggs escape without compensation.
 
This will not be AD Part II.

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Brian McFarland

About 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 NFL’s salary cap and actually make sense of it for those of us who view it as inviting as IRS Tax Code. 
   
Brian, who hails from Catonsville, MD and still resides there, is married and has two children.

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