The cost to re-sign Ray Lewis

Salary Cap The cost to re-sign Ray Lewis

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If you listen to local sports radio programming or visit a Ravens internet message board, it won’t take long to realize that there’s a wide range of opinions about how the Ravens should handle Ray Lewis’ contract negotiations.  Certainly, most want him to remain a Raven, but what he deserves as far as a contract brings vastly divergent opinions.


Some say he’s the heart and soul of the Ravens and must be re-signed at any cost.   Others say that a post-Ray Ravens has to occur at some point and if that’s now, so be it, he’s simply too old to just give him whatever he is asking for.


Still others say Owner Stephen Bisciotti and General Manager Ozzie Newsome should stick to Ozzie’s oft-stated credo of “right player, right price”.


So, while most seemingly agree that Lewis is the “right player”, the question remains – what is the “right price” for the face of the team’s franchise?


To try and put some perspective on that question, let’s try and take a look at the rumored demands of Lewis and the reported offer made by the Ravens to, perhaps, help and clarify the issue.


The buzz in quarters close to the team suggest that Ray is seeking at least $20M in guaranteed money on a 3-year, $30M deal.  Mike Preston of the Baltimore Sun has even said that Lewis wants $25M guaranteed.  Now, the word “guaranteed” can often be misleading because it may mean just upfront signing bonus money or it can also include signing bonus money and guaranteed base salaries at some point in the contract.  This distinction is important because it is only the signing bonus money that is prorated over the life of the contract.  But, on a 3-year/$30M deal, the guaranteed money is likely all part of an initial signing bonus.


To put it bluntly, this would be a MONSTER deal.


The base salaries on such a deal would have to be approximately $2.5M (2009), $3.25M (2010) and $4M (2011) because 2009 is now the “last capped year” thanks to the owners opting out of the CBA last Spring.  The owners’ opt out triggered a new set of salary cap rules, one of which basically prohibits a player’s salary from increasing on an annual basis by more than 30% of his first year salary.    


If the $20M in “guaranteed” money means upfront money in the form of a signing bonus (which on such a short deal is likely), then Lewis’ 2009 cap number would be no less than $9.167M.  Based on Pro Football 24×7’s Salary Cap estimate (24×7 Salary Cap Projection), the Ravens should have approximately $16.5M in Salary Cap space after tendering all of their RFAs and EFAs.


So, if the Ravens were to meet Ray’s demands, his Cap number alone would eat up over one-half of the team’s 2009 Cap space and would seemingly make it impossible for the Ravens to achieve their other major offseason goals of re-signing Terrell Suggs and Jason Brown.  The Ravens also must, at some point, address whether they want to re-sign Jim Leonhard, Matt Stover and/or Lorenzo Neal or if their replacements will come via the draft.   


Again, the rumored deal is a MONSTER!


Such a deal would absolutely dwarf any deal ever signed by a 34-year old Linebacker.  In fact, very few contracts exist today – at any position, for a player of any age – that average more than $10M a year. 


To further illustrate the magnitude of the deal, the next highest 2009 Salary Cap number on the team would be Ed Reed’s $6.4M.  No Linebacker in the league had that large of a Salary Cap number last year.  None will this year, either.  Very few players – at any position – will have that large of a 2009 Cap number – and most of those that do are Quarterbacks – and none are 34-years old.


To put this monster deal in a different perspective, last August, the Pittsburgh Steelers signed ILB James Farrior to a contract extension that included only a $5M signing bonus and averaged only around $3.7M per year.  Farrior and Lewis are the same age and both went to the Pro-Bowl last year.  Now, I’m sure most consider Lewis to be a better player – no doubt – but comparatively speaking is he 3 to 4 times better?


Obviously, that is a point that can be debated, but the complicating factor in such a discussion is that Ray’s value to the Ravens – as the face of the franchise – is likely higher than most any other player in the league.  And, as has been stated by Owner Stephen Bisciotti, the Ravens are likely to pay more to Ray than any other team because of that. 


So, then the question becomes – what kind of premium does that create?


That question brings us around to the reported Ravens’ offer.  Rumors over the last couple of months had the team offering a $12M bonus over 4 or so years.  Recently, Drew Forrester of WNST reported that the Ravens were not inclined to improve upon that offer of a 4-year, $22-24M deal, with a $12M bonus.  Whether they have truly drawn such a hard line in the sand remains to be seen, but it would seemingly be a good place for them to say “this is our offer, we think it’s the best you’ll see, but if you want to test the market, feel free and we’ll talk again after that.”


Assuming a straight $12M signing bonus, then this deal would have base salaries of approximately $2M (2009), $2.6M (2010), $3.2M (2011) and $3.8M (2012).  That would total $11.6M in base salary (to go along with the $12M bonus) and a much more reasonable 2009 Cap number of $5M. 


From this viewpoint, that is a much more reasonable deal for a 34-year old LB, even one as great as Ray Lewis.  While it still dwarfs Farrior’s deal and that of any other linebacker of Lewis’ vintage, it acknowledges Ray’s status with the team, while not crippling the team’s effort to improve around Lewis.  The difference between the 2 deals is over $4M against the 2009 Salary Cap (and would have similar savings in each year of the deal) and that amount would go a long way toward allowing the team to improve itself sufficiently to compete at a level necessary to bring Ray his coveted second Super Bowl Championship. 


In summary – and understanding that both of these rumored deals are likely posturing – the Ravens have a tough decision to make in determining the “right price” for Ray Lewis.  While the team is likely to come up some from the numbers being reported at this point, any deal that comes close to Ray’s rumored asking price would appear to hinder the Ravens’ ability to assemble a complete team around Ray.


And if that happens, Ozzie’s credo of “right player, right price” will be tested like never before and perhaps never again.

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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. More from Brian McFarland


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