TIE!

In Ivan Hoffman’s “Leverage in Contract and Other Negotiations,” Hoffman defines “leverage” in the first line of the article:

The term “leverage” refers to the principle of using a small advantage (or in negotiating terms, even merely a perceived advantage) to gain a much larger benefit.

In Joe Flacco’s upcoming contract negotiations with the Baltimore Ravens, he has more than a “small” advantage. An impressive playoff run and a high-caliber Super Bowl performance has given Flacco more leverage than arguably any other player in the NFL this offseason. So what should the Ravens do with Joe Flacco? Well, here are their options:

1. Sign him to a long-term contract
2. Franchise tag him with an “exclusive” tag
3. Franchise tag him with a “non-exclusive” tag
4. Trade him
5. Cut him

Okay— neither number 4 or 5 is an option so go ahead and throw them out. Realistically, the Ravens will either sign him to a long-term deal or tag him. But which option is the wisest for the Ravens?

The popular answer seems to be the long-term contract with a reluctant, “he deserves it.”

…does he?

The proponents of the Ravens giving Flacco a long-term deal consistently cite Flacco’s win-loss record, Super Bowl victory, and his impressive playoff run.

It astonishes me how often commentators, analysts, and writers refer to win-loss records as a quarterback’s record. During his contract negotiations with the Lions, I guarantee you never heard the Lions say, “Barry Sanders was 5-11 as a starter with the Lions last year, so we don’t think he’s worth that much.” I understand the quarterback position is the most valuable position on an NFL team, especially in today’s pass-happy league. But to attribute 100% of the credit to the quarterback is absurd. If you asked anyone citing Flacco’s win-loss record as a reason why he should receive a long-term deal if they believed he was 100% responsible for winning or losing every game, they’d all tell you no. Yet they’ll still cite it in a matter-of-fact tone as strong evidence as to why the Ravens should give him the contract?

Watch all of the Ravens’ playoff games again (I have with the NFL’s Game Rewind, which is a great deal by the way) and you’ll see how much happened out of Joe’s control that contributed his performance. Obviously this applies to every quarterback, but I’d say it happens for Joe Flacco more so than most quarterbacks. Flacco is the beneficiary of a lot of “high-point” grabs by the big receivers he has in Torrey Smith and Anquan Boldin. He also benefits from great playmakers in the open field, such as Jacoby Jones and Ray Rice.

For instance, in week 12 the Ravens were down 10 to 13 to the Chargers, and on 4th and 29 with 1:50 left in the 4th quarter, Joe Flacco dumped the ball off to Ray Rice, and Ray did the rest. Hey diddle diddle, Ray Rice up the middle…

One isolated instance is nowhere near enough proof to make the statement that “Flacco gets more help than most,” but I can’t prove that statement without forcing you to watch all of Flacco’s game film.

What I can provide you with is applicable stats. Here’s Joe Flacco’s career stats:

And here’s his Total QBR and where his QBR ranked in the league for each year:

Flacco’s agent says Flacco deserves “to be the highest-paid quarterback in the game[.]” And why wouldn’t he? His guy just won the Super Bowl.

But the “highest-paid quarterback” in the game is a fleeting title. As the quarterback position has increasingly gained value, there has been a revolving door of blockbuster deals. Currently, Drew Brees holds the title with a 5 year, $100 million contract.

So let’s say the Ravens make Flacco the highest-paid quarterback in the league with a 5 year, $101 million contract. What does that mean? Well, if it’s structured like Drew Brees’ contract, it’d look something like this:

Brees was 33 when he signed his deal, while Flacco is only 28, so Flacco’s agent may argue that he deserves more guaranteed because he’s younger.

Either way, in this scenario Flacco would have the Ravens on the hook for a lot of money. If they backload the deal, the contract could contain clauses relieving them of contractual obligations if they released him prior to a certain date.

The Ravens’ alternative to committing themselves to a long-term deal such as this one is the franchise tag. The non-exclusive tag would cost the Ravens $14.6M, while the exclusive tag would cost the Ravens between $20M and $21M.

The non-exclusive tag would give other teams the ability to negotiate a contract with Flacco. If another team made an offer, the Ravens would have to match the offer to keep him. Additionally, if the Ravens choose not to match the offer, the team that signed Flacco would have to give Baltimore two 1st round picks as compensation. Yet the Ravens would need to match because there will be no one better than Flacco in free agency or the draft.

If they choose to tag Flacco with the exclusive tag, they will take a $20M+ salary cap hit in 2013. A hit they may not be able to afford.

So here we stand—a long term deal, an exclusive franchise tag, or a non-exclusive franchise tag—a true predicament.

If I was the General Manager of the Baltimore Ravens, here’s the choice I’d make:

The $14.6M non-exclusive franchise tag. 

Here’s why:

I’d gamble on the fact that I don’t believe any team would be willing to pay more than a $21M a year and give up two 1st round picks for a quarterback that hasn’t ranked in the top 10 in total QBR in his career. I say $21M and not $14.6M because if a team offers more than $14.6M, I can still match their offer and keep Joe. The only way it becomes a bad decision is if they offer more than the exclusive tag would have cost me ($20M-$21M). In my mind, here’s the two realistic scenarios:

Worst Case Scenario: A team makes an offer surpassing the $14.6M tag. In response, we would match the offer and negotiate the long-term deal. (The NFL CBA allows a team to negotiate and come to terms with their non-exclusive tagged player until the Tuesday following the 10th week of the NFL season.)

Best Case Scenario: No team is willing to match the $14.6M tag and give up two 1st round picks, so we have Joe Flacco under a 1 year contract for $14.6M. While the cap hit would be $4M more than the cap hit taken in the hypothetical long-term contract, it’s a good trade off for two reasons: (1) it delays the team from having to make a giant financial commitment to Flacco, and (2) it gives Flacco a season where he could possibly, and most likely would, lose a lot of the leverage he had going into the 2013 season.

Joe Flacco will likely play the 2013 NFL season without the likes of Ed Reed, Anquan Boldin, and others (including future Hall of Famer Ray Lewis). If he has a phenomenal year individually, something he has never done, then he deserves the giant long-term deal. But, more than likely, he will lose some of the leverage he currently has over the next year, which would make the negotiation table much more palatable to the Ravens.

… unless they win another Super Bowl. In which case, you just pay up.

A few notes:

1. In no way am I saying Joe Flacco is a bad quarterback. Joe Flacco is a very good quarterback, but he’s not a top 5 quarterback. Football is a business, and I’m trying to look at it from a business perspective. The less money you have to tie up in your quarterback, the more money you have to spend on other positions.
2. I had a really tough time deciding between tags here. My eventual decision to choose the non-exclusive tag came down to the limited cap space the Ravens already have for this year. If they commit $20M+ to Joe Flacco, they’ll have to make some major moves, whether that’s restructuring contracts or cutting players.
3. Salary information was provided by spotrac.com.

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By: Tyler Raborn