Correct. They would have franchised him but they didn't have the cap space.
They desparately wanted to keep him - and tried to talk him into taking a major hometown discount.
So yes, it is true that the Ravens did not have the cap space to keep AD
The Ravens are between a rock and a hard place when it comes to their defense, knowing if they did retain AT, they would have to deal with Lewis's b!tchin about his deal. He's been talking about wanting a new deal for close to 2yrs already. If they dared sign another LB for close to the same money, he'd be a problem.