In a somewhat risky move, the Baltimore Ravens have decided to use the lower cost non-exclusive franchise tag on free agent QB Lamar Jackson, saving at least $13 million in the process but allowing Jackson to test the free agent market. There are pros and cons to this move and it will certainly be interesting to see how it plays out.
The Ravens main concern with the exclusive vs non-exclusive tag likely comes down to cap space and leverage. On the exclusive tag the Ravens, absent an extension, would need to clear out at least $45 million in cap room by April to keep Jackson on the team. That number could have gone a bit lower but some quirky language in the CBA lead me to believe that it actually could be higher.
In any case, a salary the mid $40s would give Jackson a lot of long term leverage because of how the tag process works. Next years tag would be a 120% raise off of the 2023 tag and then the 2025 tag a 144% raise over the 2024 number. So in essence you would be looking at a three year payout of about $177 million over three years, an average of $59 million a year, all with no salary cap flexibility involved.
By dropping his salary this year down to $32.4 million, his salary leverage is no different than Daniel Jones’ was with the Giants. In this case the three year payout drops way down from $177 million to around $127 million at the moment. That number could increase based on how high the cap jump next year but it would never be close to $177 million. This gives Baltimore far more leverage in negotiating a long term extension because now Jackson would have his earnings delayed by many years and the risk of injury and possible decline eroding his ultimate earning potential.
However the exclusive tag would have blocked Jackson from negotiating with other teams. Now he is free and clear to do so. The cost of two first round draft picks as compensation for a QB should be considered low. The Browns last year gave up three first round picks and some mid round picks for Deshaun Watson. Russell Wilson cost the Broncos two first round picks, two second round picks, and some players. Some non-QBs have also fetched two first round picks- Jamal Adams, Khalil Mack, Laremy Tunsil and Jalen Ramsey. Some of those players came with some salary savings up front due to “old money” in their prior contracts, but all did sign record setting deals at their position.
My understanding of the CBA, and it could be wrong since the CBA seems to always intentionally be vague, is that the Ravens are now locked into compensation of no more than two first round picks because of the tender they applied.
With respect to a trade involving any non-exclusive rights player subject to a Tender or Qualifying Offer who is a Nonexclusive Franchise Player or a Restricted Free Agent who is subject to a Qualifying Offer with Draft Choice Compensation, the following restrictions shall apply: (i) the Clubs may not agree to draft choice consideration that is greater than the draft choice compensation specified for the Tender or Qualifying Offer; (ii) the trade may not include the acquisition of another player’s Player Contract; and (iii) the player and the NFLPA must approve in advance any such trade that takes place during the Signing Period
The exclusive tag does not have this same disclaimer associated with it.
If my interpretation is correct then the Ravens should not be able to negotiate a massive Watson/Wilson like haul, which would lead me to believe that the Ravens intend to match any offer that will come their way for Jackson since they would look awful for losing Jackson for pennies on the dollar compared to other players.
At the heart of the Jackson/Ravens contract disagreement has been the concept of a fully guaranteed contract. While many players receive fully guaranteed long term contracts almost all of those players are rookies and the finances of those deals are much smaller. The only two players to sign fully guaranteed longer term veteran contracts have been Watson and Vikings QB Kirk Cousins. In both cases the QBs were essentially free agents with Cousins being a true free agent and Watson being given permission to sell himself to the highest bidder. No player has been extended on a full guarantee.
My feeling is that the Ravens are ok with doing a fully guaranteed contract provided that another team makes the offer. This would allow the Ravens to effectively cling to the concept that a “free agent” can get a fully guaranteed contract and not put them in a position with any future player looking for an extension to demand a fully guaranteed deal.
It is also possible that part of the Ravens thought process is that history. Cousins contract, while fully guaranteed, was only for three seasons. In todays dollars that would probably be three years, $150 million. While higher than the three non-exclusive tags, it would be lower than three exclusive tags, give the team salary cap wiggle room and possibly give them the ability to tag him after that contract expires. For all of the attention the Watson deal gets it is also important to note that only one team was willing to do that contract and they are clearly out of the QB market now. Other notable free agent QBs through the years, including Peyton Manning and Tom Brady, never signed a long term fully guaranteed contract. They may look at a Cousins style contract as the worst case scenario to match.
They may also never even get to that spot. If the rest of the teams in the NFL feel that they are just negotiating a contract for the Ravens they would not want to bother. Not only do you waste the time negotiating, but you clog up your cap for a week and get your fanbase all excited only to wind up with Sam Darnold as the lone remaining free agent option in the market.
The Ravens primary risk would probably come down to a team making an offer they can not match. The Ravens are currently over the salary cap with Jackson at the $32.4 million cap figure. Right now the most I can get the Ravens up to is about $84 million in effective cap space (meaning Jackson does not count). To do that I am maxing out the savings with restructures for Stanley, Humphrey, Andrews, Smith and cutting Zeitler, Campbell, Clark, Bowser, Mekari, Pierce, Edwards, Moses, Duvernay, and Ricard. The reason for so many cuts is that this should be the max savings possible. You could keep a few but it brings the cap down a little. This would not take into account money for a draft class, a regular season roster and so on.
I believe that this would give a team an ability to really frontload a contract with a massive cap charge of $80-$90 million in year one that the Ravens could not match. The payout on that would be huge since the 2nd year has to be 50% of the first season, so the ballpark would be $120-$135M over the first two seasons. The current high water mark is $110 million so this would be a massive jump. The only teams with the cap room flexibility to execute that kind of deal would be the Bears, Falcons, Colts, Raiders and possibly the Texans. The Bears would not be in the market and the price seems far too expensive for the Colts and Texans.
There are probably few other creative options. The NFL does not allow a team to try to use a no tag provision to prevent a team from matching a one year contract. Maybe the NFL would allow a creative void structure to skirt that where if Jackson was on the teams roster on the 2nd day of the 2024 league year some massive future salary guarantee kicks in which in turn would force a team to release him. Basically what you would be trying to do would be to find a way to sign a one year deal where the Ravens cant tag him again. At that point they would be faced with a decision of taking two first rounders or possibly only getting a comp pick. If this is allowed I would tend to think it would be disputed but then it is up to the arbitration process to decide.
If no team makes an offer then the Ravens are in a very strong position for the future when it comes to negotiating a contract. The NFLPA likely would file a collusion claim if that happened especially with so many teams seemingly leaking that they “are not interested in Jackson” just minutes after the tag was applied. There are logical reasons to do that if you want to temper expectations from your fans but it would be odd for a player to be out there of this caliber and not receive any offers. But it sure seems like the Ravens are gambling that nobody will make any kind of concrete offer that really changes their overall position with Jackson in 2023 and beyond.