Q. Some teams have been successful extending deals of key players prior to the last year of current contracts. It nets the players a little more money sooner but in the long-term it’s a strategy that enables teams to keep players and lock them up for extended periods before they hit free agency.
The Ravens have lost players like Pernell McPhee in the past when such a strategy may have paid off. Kelechi Osemele is another who comes to mind and looking ahead Brandon Williams could be lost as well.
Why do you think the Ravens don’t employ this strategy more often?
ANSWER: In their earlier years, the Ravens did employ this tactic with many of their star players. From 1999-2006, the Ravens extended Jon Ogden (x3), Ray Lewis (x2), Michael McCrary, Peter Boulware, Ed Reed and Todd Heap early, usually in the summer before the final year of the player’s contract. The Ravens also did so with Lardarius Webb in 2012 and Jimmy Smith just last spring.
Why they have done it less more recently is unknown.
They certainly have reportedly tried with guys like Suggs, Rice, Ngata and Flacco, but for whatever reasons, they were unable to reach an early extension.
Whether they should or not is somewhat of a “beauty is in the eye of the beholder” issue. On one hand, players will never be cheaper than under the terms of their rookie deals, so why not take full advantage of that? On the other hand, locking them up sooner can save you money in the future because the cost is usually less when you lock them up earlier.
The Philadelphia Eagles have been the one team to do this the most, and in some cases it worked, but in others it didn’t, and regardless of the early commitment by the team to the player, if the player later feels underpaid, that early commitment isn’t going to stop the player from wanting to redo the deal again.
The Eagles, though, were more the exception than the rule, and most teams seem to operate more like the Ravens, get a deal done when you can, but otherwise, take full advantage of the player’s cheaper years.
Some of this issue is a bit academic now, as drafted rookies cannot be signed to an extension until after their 3rd year in the league, so it really only gives a one-year window to do so. This would include Brandon Williams and RT Rick Wagner, who are now eligible for extensions.
Q. You often hear about Tom Brady taking a pay cut to allow his team to allow the Patriots to afford to sign other players. Is he taking a genuine pay cut like Lardarius Webb did this past offseason or is he just exchanging salary for an upfront bonus that could be amortized over the length of his contract?
ANSWER: Brady most certainly is making less than what the top QBs are making today. Brady definitely took less when he did his last real contract extension in 2013. That extension, though, contained fully guaranteed salaries that made the lower base salaries more palatable to him because even if released, he was still going to be paid. This past January, though, Brady agreed to remove those guarantees to help the team. This change didn’t take any money away from Brady (he actually got a couple million extra), but allowed to team to free up cash to be used elsewhere.
For what it’s worth, when you hear about players restructuring that rarely means that the player is taking less (as Webb did). The vast majority of the time, it just means that the team converted most of the player’s salary for that year into a bonus and gave it to the player sooner. It’s most always the same amount of money for the player, just paid at a different time, but it allows the team to account for it differently on the Salary Cap.
Q. Looking ahead are there any restructure candidates on the Ravens roster that would help to create cap space in 2016? Any players that the Ravens might force a pay cut upon like they did with Webb?
ANSWER: I don’t envision any paycuts this time around. As I said above, those are rare and while I do think there’s probably a few players they feel haven’t earned their salaries, there isn’t a lot of leverage available to the team to force paycuts.
I guess there is one player who could be subject to a paycut, but it is a unique circumstance – Dennis Pitta. Even if Pitta does prove to be able to make a healthy return (which seems very doubtful), I can’t see the team paying him his $5M base salary to find out. After paying him $4M this past season to sit on PUP, I just can seem them risking that $5M on him staying healthy. The $4M in 2015 was guaranteed, so the Ravens really had no choice, but there are no such guarantees in 2016.
So, if he and the team were agreeable and wanted to give him one more shot at proving he can get healthy, they could work out a deal to drop his base salary to the veteran minimum and then replace some of what he gave up with incentives and/or gameday active roster bonuses, meaning he would only get paid if he was healthy, playing and producing.
That said, I have a feeling that that ship as sailed, and with Crockett Gillmore, Maxx Williams and Nick Boyle showing promise, the need for Pitta has probably waned.
As far as restructures go, I really don’t expect any. In the past, the team has expressed a desire to avoid restructures because while they do create Cap space immediately, it comes at the cost of future Cap space as the restructure raises the player’s Cap numbers over the remain years of the contract. Because of the tight Cap this year, the Ravens did restructures with Terrell Suggs and Jeremy Zuttah, after having only done 2 other restructures (that I can recall) since 2003. The restructure with Suggs could became a sore spot with him coming off of an injury at age 32 and shows the danger of restructuring older players. I would think the Ravens would want to avoid that again.
Q. Outside of the obvious players who fail to perform to the level of their contracts, what cap blunders would you like to have back if you were Ozzie Newsome?
ANSWER: I think the good news is that they are now mostly rid of some of those contracts that Ozzie would like to have back. Not that they were bad deals at the time they were given, but the contracts for Ngata, Rice and Pitta have really come back to haunt the team. Obviously, there were also extenuating circumstances in the cases of Rice and Pitta, but both of those deals were probably a bit too lucrative to start with.
If there is one remaining, it’s Eugene Monroe’s contract. Again, it looked like a solid deal at the time, but certainly it seems that they invested in a player who isn’t as invested in them. Between (1) having missed a majority of his games over the last 2 years, (2) seeing only average play from him when he did play and (3) having him decline a simple restructure of his contract (again, with no money lost to him) in order to help the team with Cap space, I’ve got to think the team is having more than a bit of buyer’s remorse on that one. It will be interesting to see what they decide to do with Monroe this offseason.
Q. The Ravens will draft in a much higher position than they have had since selecting Peter Boulware with the 4th overall pick in 1997. (They picked Jamal Lewis with the 5th overall pick via a trade with the Atlanta Falcons in 1999). That will increase the size of the rookie cap. Explain why that is and talk about the implications on the Ravens overall cap.
ANSWER: With the higher draft position comes a larger Rookie Allocation (Rookie Cap), so the signing of draft picks will have a much larger impact on the team’s overall Cap than it has in recent years. Over the last few years, picking later in the draft meant that the team would have a Rookie Cap in the $5-6M range and the impact of the Rookie Cap on the team’s overall Cap was only around $1-2M. With the much higher draft spot this year, the team’s Rookie Cap is more likely to be in the $7-10M range, depending on how many picks they end up using and where those picks end up being. The higher draft position means more bonus money paid to the players and that means a more sizeable impact on the team’s overall Cap ($3-5M).
For a more thorough explanation on the interplay between the Rookie Cap and the team’s overall Cap, CLICK HERE.
