Ravens’ Salary Cap Update

1.  FINAL 8
PLAN LIMITATIONS:  Many still seem to be confused about whether the Ravens can or cannot sign a big-money Unrestricted Free Agent (UFA).  A recent spin around the radio dial showed that many in the media are apparently confused as well.

There is a “you must lose a UFA before you can sign a UFA” provision that applies to the Ravens, however, the Ravens – by virtue of losing in the Divisional Round of the playoffs  – are also allowed to sign one big-money UFA.  The Ravens ability to sign one big-money

UFA is in no way limited by the “you must lose one before you sign one” limitation.  It is only after they’ve signed one such

UFA that the “lose one before you can sign one” limitation kicks in for adding another big-money

UFA.  There is a middle range of UFAs that they are not able to sign until they lose one.

But, again, if the Ravens wanted to go out and sign a player like Julius Peppers, they can.

2.  TRADES:  The trade provision of the Final 8 Plan is not one of the more clearly written provisions of the
CBA.  It is a bit ambiguous as to what types of trades it limits and to which class of players that it applies to.  The NFL has now clarified the provision, which only is in place to limit a “sign and trade” scenario, by which a UFA signs with one team and then is traded to a Final 8 team – a team which would have otherwise been unable to sign the UFA because of the Final 8 prohibitions.

This is very good news because it does not limit the Ravens’ ability to trade for a player that is under contract (Boldin, Bowe) or to trade for a Restricted Free Agent (RFA) for less than the RFA Tender received by the player, like Brandon Marshall (assuming his present team would be willing to trade him for less). 

3.  WILLIS McGAHEE:  There has been a lot of discussion about the fate of Willis McGahee.  In a perfect world the Ravens would likely love to have him return to the team in the role that he thrived in this past season.  However, McGahee has always expressed his belief that he is a starter and there are some questions as to whether he would continue to embrace a back-up role.  There is also his salary of $3.6M to consider, which is certainly high for a back-up.  He is also due a salary of $6M in 2011, so one way or the other, this is very likely to be his last year in Baltimore.

The Ravens would probably be willing to trade McGahee if they got a solid offer, but if they can’t find a suitable suitor, and they’ve decided – either because of salary or attitude – that he’s no longer a good fit here, then they will release him.

While losing a talented player is not a good thing, a trade or release does have one advantage for the team – if a salary cap returns in 2011 (and assuming rules similar to the ones presently in place), there will be no adverse salary cap implications that will have to be dealt with at that time.  Simply put, if McGahee is not on the team in 2010, then there will be no dead money ($6.25M) attributable to McGahee that would have to be accounted for in the future.  It would all come off of the books this year.

4.  NO SALARY
CAP, BUT A BUDGET:  While there will likely be no Salary Cap in 2010, every team is still going to have a budget.  No team can simply spend and spend and spend.  For the Ravens, there is one sizeable limiting factor with regard to their budget – Terrell Suggs is due a $23M option bonus.  For some perspective on what that means, the Ravens’ total payroll for 2009 was $109M (i.e. the total cash that they actually spent on players).  They also have option bonuses due other players as well.  All of those taken together total close to 25% of the total that was spent by the Ravens last year.

So, while the Ravens may be very willing to spend, they already have some sizeable obligations that will limit what they will be able to spend on adding players at key positions.

5.  UNCAPPED YEAR IMPLICATIONS:  With fewer UFAs available in an uncapped year, teams will likely have to look in other directions to try and improve their teams.  That could mean more trades and a more active RFA market.

In the past, trades – especially player-for-player trades (as opposed to draft pick-for-player trades) – were uncommon because the trading of a player often had adverse Salary Cap implications that made it too costly from a Salary Cap perspective to trade the player.  Sometimes it was just better to keep the player instead.  However, in 2010, with no Salary Cap, there are no negative cap ramifications to trading players.  As such, look for teams to be more willing to trade players in an effort to improve their teams by trading a player from a position with adequate depth for a player at a position of need.

In addition, look for a more active RFA market, since the quality of the RFAs is much higher than the quality of the UFAs and since there are less options available to try and improve the roster.  Since signing an RFA to an offer sheet will cost draft picks as compensation, it hasn’t been a very common occurrence, but this year, with less options available, many teams may decide it’s worth it to part with a draft pick(s) to get a proven, young, veteran player.

6.  THE RETURN OF THE POISON
PILL?:  In 2006, the Minnesota Vikings signing Seattle Seahawks OG Steve Hutchinson to an offer sheet that contained a “poison pill” that essentially made it impossible for the Seahawks to match the Vikings’ offer.  Later that offseason, the Seahawks returned the favor and signed WR Nate Burleson to an offer sheet that contained a similar poison pill provision.  Since then, teams have shied away from using poison pills. 

While the NFLPA would argue that lack of any poison pills since then is evidence of collusion on the part of the owners (i.e., teams agreed to stop doing it to control player costs and player movement), it’s more likely that teams simply realized that using a poison pill only opens themselves up to having it used against them, just as the Minnesota/Seattle exchange showed.

That said, with fewer options available in an uncapped year, it will be interesting to see if some teams start using poison pills again in 2010, as a way to try and steal an RFA away from another team.

7.  TEAMS MUST BE MINDFUL OF A RETURN OF THE SALARY
CAP:  Regardless of some of the rhetoric coming from both sides of the NFL’s labor negotiations, neither party is interested in getting rid of the Salary Cap.  As such, teams in an uncapped year need to be mindful of the fact that, in the future, they may need to account for the expenditures and excesses make during the uncapped year.   

At least, that is what teams should do.

If they don’t, they may have a hard time fitting under a new Salary Cap in 2011.