Ravens Employ Rarely-Used UFA Tender
Last week news broke that the Ravens had applied the UFA Tender on free agent LB Justin Houston. This tender is rarely used and is pretty much unknown to most fans. In fact, it has only been used a few times over the past decade.
The UFA Tender, which must be applied by the first Monday of May, basically does three (3) things:
1. Houston would only be able to play for the Ravens if he remains unsigned by July 22nd. After that date, the Ravens would have exclusive negotiating rights with Houston and he would be barred from signing elsewhere.
2. If Houston were to sign with another team before July 22nd, he would count towards the Compensatory Pick formula (if his contract was large enough to qualify – approx. $2.7M/yr).
3. If Houston does not sign elsewhere, he would receive a one-year contract worth 110% of his 2021 salary. Since Houston earned $2.075M in 2021, the UFA Tender is worth $2.283M in 2022.
So, why would the Ravens use the UFA tender on Houston and why is it so rarely used?
The easy answer for why the Ravens chose to use it this time (and also why the Kansas City Chiefs also did the same with LB Melvin Ingram) is that Houston’s salary was so reasonable in 2021 that the 10% increase in his salary is a minimal bump and Houston, at $2.283M in 2022, is still a huge bargain. In essence, the “huge bargain” part also answers the second question because usually the last year of a coveted free agent’s contract is usually worth a lot more than $2.075M, so using the tender just isn’t really an attractive option for the team. But, with Houston’s salary being so low in 2021 (due to the impact of the COVID pandemic on the Salary Cap), using the tender to try and secure a player at a position of need comes at a very reasonable price in this case.
While this move does also extend the Comp pick window and perhaps sneak in an unexpected Comp pick for the team, it doesn’t really seem to be the primary motivation in this case. Given that Houston is still on the market at this point, and that there really haven’t been any reports of much interest in Houston from other teams, Houston may not even receive a contract from another team that qualifies for a Comp pick. So, while the Ravens do love their Comp picks, this move seems to be more about retaining a respected player, who would bring a veteran presence and leadership to the team and would, at worst, be a nice rotational piece on the edge. And, at a very reasonable rate.
So, what happens from here?
At this point, it’s really just a matter of waiting and seeing. Houston could sign the tender or the Ravens and Houston could, of course, negotiate a different deal (perhaps, with incentives to bump Houston’s pay if he performs well), but otherwise, the Ravens will wait to see if Houston finds a new home or decides to stay.
According to NFLPA records, the tender amount of $2.283M has been applied to the Ravens’ Salary Cap. This was unexpected because it runs contrary to the terms of the Section 5(b)(4) of Article 13 of the CBA, which states as follows:
So, according to the CBA, the tender amount is not supposed to count against the Cap until the later of July 15th or the first day of the first scheduled NFL training camp. However, the NFLPA has added the tender amount to the Cap for both the Ravens and Chiefs (Ingram). This could simply be an error on the part of the NFLPA (not an uncommon occurrence) or perhaps at some point the NFL and NFLPA agreed to amend this provision by a side letter. This may actually be the case since all other types of tenders (ERFA, RFA, Franchise/Transition Tag, draft pick tender) always count against the team’s Cap immediately upon being applied. So, the NFL and NFLPA may have realized the inconsistency in the tender provisions and fix it by having the UFA Tender immediately count against the Cap.
Regardless of which Salary Cap application is proper, the bottom line is that Houston has until July 22 to sign elsewhere or he is essentially going to be on the Ravens’ roster at either the tender amount or some other amount as agreed to by Houston and the team.
