Are you confused beyond belief about the NFL Free Agency? You may have heard such terms as Unrestricted Free Agent, Restricted Free Agent, Franchise Tag, and Transition Tag, and if you are very confused by what these terms mean -- don't feel embarrassed. Half of the sports journalism world doesn't seem to fully understand what these terms mean either!
Fear not. The Commish is here to help. Our goal is to provide you with a quick course on Free Agency so that you can understand what is going on here. By the time we're through with you, you will have the knowledge and power to second guess your favorite team's General Manager!
The notion of Free Agency itself is a relatively simple one. As defined in the Collective Bargaining Agreement (CBA) Between the NFL Management Council And the NFL Players Association (NFLPA), a Free Agent is "a player who is not under contract and is free to negotiate and sign a Player Contract with any NFL Club, without Draft Choice Compensation or any Right of First Refusal."
Sounds easy, right? Oh... if it were only that simple. There are many, many scenarios that the team and player may be presented with as set down by the CBA. And some of these scenarios actually DO allow for the notions of "Draft Choice Compensation" and "Right of First Refusal".
Before going any further, let's take a closer look at what the CBA is really all about.
The CBA was an agreement between the NFL Players Association (NFLPA) and the NFL owners to reach an equitable agreement in terms of the sharing of the pie, if you will. Basically, through the CBA the parties have realized that the goal of the players and the management should be the same—increasing the revenue pie instead of fighting over the existing amount—and the NFL has tailored the CBA to achieve that goal.
The NFLPA was rewarded with the concept of Free Agency, whereby players have the freedom to market their skills after a specific period of service. As a system of checks and balances, the owners sought a means of cutting back on the escalation of the players' salaries. This is accomplished by -- you guessed it -- the NFL Salary Cap. (See Caponomics 101.)
Compromise is an abundant theme found throughout the CBA. The Free Agency system is slightly limited by the team’s ability to protect certain athletes (Franchise and Transition players) from leaving by paying a salary equal to an average of the top players at his position. On the other hand, the salary cap is flexible by allowing owners to pay signing bonuses up front that exceed the cap, but the amounts are amortized over the life of the contract.
Note also that the current CBA was ratified prior to the 2011 season. From a historical standpoint, it is worth noting that this latest CBA was not ratified until the previous one concluded -- despite a push by the owners for an extension. The owners wanted an extension because language in that CBA treated the last season covered by it (2010) as uncapped. The provision for the final year being uncapped was meant to create incentive to extend the CBA before ever getting to that point, but the NFLPA used it as a bargaining chip. Thus, the 2010 season was played with no salary cap in place.
Now that we know what the CBA is and how Free Agency and the NFL Salary Cap work to gauge one another, let's take a closer look at how the CBA specifically defines Free Agency.
The definition that we cited above by the CBA for a Free Agent is really the definition of an Unrestricted Free Agent (UFA). More specifically, an UFA is : "[a] player [that] shall be completely free to negotiate and sign a Player Contract with any Club, and any Club shall be completely free to negotiate and sign a Player Contract with such player, without penalty or restriction, including, but not limited to, Draft Choice Compensation between Clubs or First Refusal Rights of any kind." Basically, what that means is that an UFA is free to sign with the highest bidder (or the team of their choice) without that team having to give the original team any kind of compensation. When a player with five or more accrued seasons (or with four or more accrued seasons in any Capped Year) reaches the end of his player contract, he becomes an UFA.
Obviously, if the CBA is going to define a term for an Unrestricted Free Agent, you would expect that they must also have something called a Restricted Free Agent (RFA). And, of course, you would be right. Before defining a RFA, I should point out that with the 2011 CBA, these types of free agents became a bit more scarce.
That is because all rookie contracts are now at least four years, which means that restricted free agency becomes relevant only when an undrafted player finishes three years of service, or when a drafted player is cut before the completion of three years and has a contract that expires following his third accrued season.
A RFA is "any Veteran player with three or more accrued seasons, but less than five accrued seasons (or less than four accrued seasons in any capped year)... At the expiration of his last Player Contract during such period... [the player] shall be completely free to negotiate and sign a Player Contract with any club, and any club shall be completely free to negotiate and sign a Player Contract with any such player, subject to... certain restrictions."
Now, let's look at the "restrictions".
The player's original team maintains the Right of First Refusal and Draft Selection at the Player’s Original Draft Round (from the team with which he signs) if the team tenders an offer of one year at $1.797 million OR at least 110% of the player’s prior year’s salary -- whichever is greater. (Note that teams get no compensation other than the Right of First Refusal for players who were undrafted.)
The player's original team maintains the Right of First Refusal and Second Round Draft Selection (from the team with which he signs) if the team tenders an offer of one year at $2.476 million OR at least 110% of the player’s prior year’s salary -- whichever is greater.
The player's original team maintains the Right of First Refusal and First Round Draft Selection (from the team with which he signs) if the team tenders an offer of one year at $3.91 million OR at least 110% of the player’s prior year’s salary -- whichever is greater.
There used to be another option: the Right of First Refusal and First Round Draft Selection and Third Round Draft Selection, but that option was dropped with the ratification of the 2011 CBA.
In the event a Prior Club withdraws its Qualifying Offer, the RFA immediately becomes an UFA.
There is one other kind of free agent, which isn't really very "free" at all. That is the Exclusive Rights Free Agent (ERFA). Such a player has no more than two accrued seasons in the NFL and may only sign with his prior team, provided, of course, that the team extends a minimum qualifying offer to the player.
NFL teams have two other tools at their disposal that provide for greater leverage in securing Free Agents: the Franchise Tag and the Transition Tag.
Each Club can designate one of its players who would otherwise be an UFA or RFA as a Franchise Player each season. Something that even some of the most knowledgeable sports fans do not realize is that a team has the option of designating a Franchise player with one of two tags: Exclusive or Non-Exclusive.
Any Club that designates a Franchise Player as Exclusive shall be the only Club with which that Franchise Player may negotiate or sign a contract. In order to designate an UFA or RFA as an Exclusive Franchise Player, the team must tender the player a one year contract that is the minimum of the average of the five largest salaries (as calculated at the end of the free agency signing period) for players at the position at which he played the most games during the prior year, or 120% of his prior year salary, whichever is greater.
If the team elects to name the player "Non-Exclusive" then the player shall be permitted to negotiate a contract with any Club as if he were an UFA; however, Draft Choice Compensation of TWO first round draft selections shall be awarded to the prior club in the event that he signs with the new club.
Prior to 2011, for Non-Exlusive Franchise Players, the team had to tender the player a one year contract that was the minimum of the average of the five largest PRIOR-YEAR salaries for players at the position at which he played the most games in the prior year, or 120% of his prior year salary, whichever was greater.
Once the new CBA was ratified in 2011, the tender for Non-Exclusive Franchise Players was redefined. This gets a little messy, so please bear with me for a moment as I explain the calculation:
(Sum of the franchise tags at each position over the same five-year period.) / (Total sum of the salary cap for the previous five prior years.)
The above calculation gives us the relative cap percentage for the franchise tag by position. Then, for each position, the tender is the respective percentage for that position (as calculated above) multiplied by the salary cap for the given year.
Make sense? If it doesn't, do not feel bad.
If the player elects to play with the prior club (the team that designated him with the Franchise tag) and does not negotiate another contract with that team, then the one year salary is guaranteed. Also, if the prior club elects to withdraw the qualifying offer, the player becomes an UFA.
Each Club can also designate one UFA or RFA as a Transition Player. Additionally, (in the final year of the CBA) each club may, in lieu of designating a Franchise Player, designate an additional Transition Player during the same designation period as the Franchise Player designation period. Whew! What that means is that a team may elect to tag two players with the Transition tag or one Transition Player and one Franchise Player in the final capped year. Any Club that designates a Transition Player shall receive the Rights of First Refusal. In order to designate an UFA or RFA as a Transition Player, the team must tender the player a one year contract for the average of the ten largest prior year salaries for players at the position at which he played the most games during the prior year, or 120% of his prior year salary, whichever is greater.
Teams can officially designate Franchise and Transition Players between Feb 16 and March 1.
February 26 is the deadline for clubs to submit qualifying offers to their RFAs whose contracts have expired and to whom they desire to retain a Right of First Refusal/Draft Compensation.
Free Agency officially begins on March 9th. However, teams can now begin negotiating with players 2 days prior (meaning, March 7th). For RFAs, the period officially ends on April 22. The deadline for old clubs to exercise the Right of First Refusal to RFAs is April 29. For UFAs (including Franchise players and Transition players), who have been given a tender offer from their prior team, the period officially ends on July 22 or the first day of training camp -- whichever is later.
Under the old CBA, a team had until March 17 to work out a long term deal with its Franchise Player. If the team signed the Franchise Player between March 18 and July 14, the tag would have stayed with that player for the length of his contract, which meant that the team could not name another Franchise Payer until that player's contract was terminated. The updated CBA pushed that date back until July 22, the same as the free agency deadline. However, there remains a caveat: The club may NOT sign the tagged player to a long-term contract after July 14. That is, the team has until July 14 to sign the tagged player to a long-term contract; afterwards the player may sign only a one-year contract with his prior team, and the contract may not be extended until after the last regular season game.
A prior team has until June 1 to tender an UFA or a RFA a qualifying offer (worth at least 110% of the salary of the final year of the contract with the prior team). In the case of UFAs, if such an offer is made, the player has until July 22 to sign with a DIFFERENT club. If he doesn't, then the only team that the player can sign with after July 22, is the prior club. In the case of RFAs, if such a June 1 tender is made, the player can ONLY sign with the the prior club. If no June 1 tender is made for a RFA (or the tender is rescinded by the prior club before July 22), then the player becomes an UFA. In the case of both UFAs and RFAs, if the player does not sign with the Prior team by the first Tuesday following Week 10 of the regular NFL season, then the player shall be prohibited from playing in the NFL for the remainder of that season.
Deadline for old clubs to withdraw an original qualifying offer to a RFA and still retain exclusive negotiating rights by substituting tender of 110% of previous year’s salary is June 15.
Wow! That's a lot to digest! If all of this still seems confusing, relax. We have a series of FAQs that may better help you understand how Free Agency works in the NFL.