Ngata got a big deal

Haloti Ngata certainly picked the right time to have a great game. Days before a signing deadline and playing the team’s archrival, Ngata’s timing was impeccable in earning one of the top contracts ever awarded in the NFL.

Timing is everything

Tuesday was the deadline for NFL teams to sign Franchise players to extensions. In a “normal” year that date is much earlier in the offseason, but this year’s timing was different due to the lockout. Absent an extension by Tuesday, Franchise tag players must play 2011 under their one-year deals, unable to negotiate a long-term deal until after the season.

With most of the previously-tagged Franchise tag players already signed to extensions – Peyton Manning, Michael Vick, Logan Mankins, David Harris, Lamarr Woodley, Ryan Kalil, Chad Greenway, Tamba Hali and Marcedes Lewis — the players still unsigned were Ngata, Vincent Jackson, Phil Dawson and Paul Soliai. These three will play out their one-year deals unable to come to agreement as Ngata did.

Steeler leverage

The Ravens now have their franchise tag available for Rice if they need it.

There were three factors that accelerated the Ravens’ pace in negotiations this week and secure Ngata to a deal: (1) the aforementioned deadline; (2) eliminating Ngata as a potential Franchise tag in 2012 (they would have likely used it again were a deal not completed) to allow its use on Ray Rice; and (3) the dominant play by Ngata in Week One against the team’s top adversary, the Steelers.

On the Friday before the Steelers game, the Ravens were offering Ngata in the neighborhood of $20 million in signing bonus and $30 million over the first two years. After that game, the Ravens had moved to a new, more upscale neighborhood and offered close to the numbers finally agreed to. Sold.

The Deal

2011: $27.1 million

Ngata will receive a $25 million signing bonus payable as follows:

$9 million upon signing;
$9 million over the remaining 15 weeks of the season; and
$7 million in March.

As signing bonuses go, this is very good cash flow.

Ngata's salary is $2.1 million.

Thus, instead of one-year Franchise tag earnings of $12.5 million, Ngata will earn $27.1 million, all paid by March of 2012.

2012: $12.9 million

There is an option bonus of $10 million exercisable at the start of the 2012 League Year in March. Until that option is exercised, $10 million of salaries are guaranteed for injury only. Those guarantees dissolve upon exercise of the option.

As with any option bonus – including that of Peyton Manning – the team can release the player prior to the option date. Thus, there is a chance – however remote – that the Ravens do not pick up the option on Ngata. In that case, they would have paid Ngata $27.1 million for one year – instead of the $12.5 million he was scheduled to make – and made him a free agent.

Ngata's 2012 salary is a nonguaranteed $2.9 million, the only amount of the first two years without a guarantee.

Rest of the deal (nonguaranteed):

2013: $4 million
2014: $8.5 million
2015: $8.5 million

Thus, here are the numbers:

Total value: $61 million
Guarantee: $37.1 million
Average per year: $12.2 million

Analysis

Positives for Ngata

The Ngata two-year threshold of $40 million is exceeded only by Peyton Manning ($61.8 million), Tom Brady ($42 million), Ben Roethlisberger ($41 million) and Philip Rivers ($40.05 million). It is matched by two defensive players: DeMarcus Ware and teammate Terrell Suggs. It exceeds everyone’s favorite punching bag contract, that of Albert Haynesworth with the Redskins ($35.6 million over two years) and will likely set the market for a while. And the cash flow is strong: Ngata will receive all $40 million in the next 15 months.

Also, the percentage of the contract that is guaranteed – 61% -- is the third highest in the NFL for contracts averaging over $10 million over five years, exceeded only by Elvis Dumervil and Tamba Hali (68% each).

Were Ngata franchised again next year, his earnings would be $27.5 million over two years: $12.5 million this year and 120% of that -- $15 million – in 2012. The $12.5 million difference between that and the $40 million he is now receiving is a strong ratio for the player.

Finally, the contract is for five, not six, years (many of these top of market deals are for six years or longer). It is certainly possible that he will have another bite at an oversized contract, as he will be only 31 years old at the end of this deal! Kudos to agents Mike McCartney and Deryk Gilmore for their work here.

Positives for Ravens

The Ravens have their dominant defensive lineman under contract and can – if for leverage purposes only -- have the use their Franchise tag for Ray Rice in 2012 and potentially Joe Flacco in 2013.

The injury-only guarantee for the option bonus – as opposed to a bonus that converts to a skill guarantee like so many others being done recently – is an advantage for the Ravens, albeit something that is a remote possibility of being an issue. For Ngata to hit a true home run on this deal, the entire $40 million would have been backed up by a full guarantee. The full guarantee here is the $27.1 million in the first year with a $10 million injury-only guarantee past that.

Thanks to the Franchise tag deadline, the future status of Ray Rice’s contract, and a cha-ching performance against the Steelers in Week One, the Ravens made an aggressive play in signing one of their core players through 2015.

Ngata bad deal whatsover.... (sorry).

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