NFL Free Agency FAQ | Steel City Underground

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NFL Free Agency News

This is the time of year where NFL fans and analysts begin talking about free agents, franchise tags and salary caps. If you just asked "what is that?" to any of those terms, then you are in the right place!

Below is a compilation of commonly referenced words pertaining to the NFL and free agency, along with an explanation of what they mean.

Terminology

Free Agency Period

A period of time when the NFL permits teams to begin negotiations with other team's free agents.

Exclusive Rights Free Agent (ERFA)

A player whose contract has expired and has three or fewer tenured years in the league. The player's original team must make a contract offer by the league imposed deadline or the player becomes an unrestricted free agent. No compensation is awarded for losing EFAs.

Restricted Free Agent (RFA)

A player who has accrued three seasons (six or more regular season games with a  team) of service, who has a "tender" which is set by the league's Collective Bargaining Agreement (typically 110% of last year's salary.) RFAs can negotiate with any team through a certain period of time. Those teams can give the RFA an offer sheet, which his old team then has five days to match the offer, or choose not to match the offer. If a team choose the latter, and does not match the offer sheet, they may receive compensation for "losing" the player via one or more draft picks from the player's new team, corresponding to the round in which they were drafted.

No compensation is required if the player was undrafted.

The tender amounts set for the 2017 season are as follows:

Tender amount Compensation required
$3.91 million First-round
$2.746 million Second-round
$1.797 million Determined by player's original draft status

Each player that signs their tender, receives a one-year salary corresponding to their level.

Unrestricted Free Agent (UFA or FA)

A player no longer under contract to a team, due to being released, having their contract expire or having not been selected in the NFL draft. (Players who are not picked in the NFL draft are also known as "undrafted free agents."

A UFA is free to negotiate with and sign with any team. The high profile signings you hear about the first few days of the free agency period are UFAs.

Franchise Tag

A designation that a team can apply to a player who may enter free agency as an unrestricted free agent (UFA.) When a team exercises their designates a player with the franchise tag, it is often referred to as "franchising" that player.

NFL teams are only permitted to use one tag option (franchise exclusive rights, franchise non-exclusive rights or transition tag.)

In the case of franchising a player with "exclusive rights," the tag applies a one-year contract on the designated player, with a salary determined by the average of the top five salaries at that player's position, or 120% of the player's previous contract, whichever is greater. Exclusive rights players cannot negotiate with other teams, as they are "exclusively" signed now with the club who designated them with this tag.

Non-exclusive rights franchise players are similar to restricted free agents, in that they are free to negotiate with other teams, and sign offer sheets. The player's old team still has the option to match the offer sheet and retain the player. Should the player's existing team pass on matching the offer, they are compensated, like RFAs. The price for signing a non-exclusive rights player is steep: the old team is given two first round draft picks from the new team.

Therefore only highly valuable players are usually "franchised" to allow their existing club to retain the player before they become a UFA, and additionally giving the team an extended period of time to negotiate a new contract.

Transition Tag

A different designation, the transition tag can only be used if a team does not franchise tag a player. A player designated as a transition player is offered a one-year salary based on an average of the top ten salaries at their position, or 120% their previous year's salary, whichever is greater.

A transition tag is similar to a non-exclusive rights franchise tag, in that a player can entertain offers from other teams, and their current team has the option to match. However, if a transitioned player's offer sheet is not match, the old team does not receive draft picks/compensation.

Salary Cap

Salary cap refers to a rule which limits the total amount of money an NFL team can spend on players, and is calculated by the yearly salaries of the entire team's roster. NFL teams must stay under the cap at all times. They must also stay above a cap floor, meaning there's also a minimum amount of money a team must spend, or they risk fines, cancellations of contracts and/or loss of draft picks.

The salary cap and floor are adjusted each league year based on revenues. Usually, the cap increases each year.

Guaranteed Money

Singing bonuses are usually prorated evenly over the term of a player's contract. The money is guaranteed, in that is a player is injured, retires, traded or cut with before June 1st, all of the remaining bonus money is applied to the current year's salary cap.

Players cut before the beginning of the season have their salary for the remainder of their contract voided: the player is not paid, nor is the salary counted against the cap. This is why high profile free agents seek financial security via guaranteed bonus money.

June 1st Designation

You may hear this term often. Rather than cut the player prior to June 1st and apply all of the remaining guarantee to the team's current salary cap, the team can cut a player with a June 1st designation, which allows the remaining bonus to be unchanged, but next year's cap must absorb the remainder of the guaranteed money.

Incentives

An incentive is a bonus a team is required to pay when a player reaches a particular milestone set forth in their contract. For example, a QB might have an incentive to be paid X dollars if they pass for over 4,000 yards.

Incentive bonuses are considered "likely" or "unlikely" to be earned. Those "likely" bonuses are counted against the salary cap, whereas those "unlikely" are not.

Other FAQ's

What is the salary cap set at for 2017?

Salary Cap set at $167 Million for the 2017 season.

When does the 2017 free agency signing period begin?

At 4:00 p.m. ET on Thursday, March 9.

What are the categories of free agency?

Players are either "restricted free agents" or "unrestricted free agents."  A restricted free agent may be subject to a "qualifying offer."  A restricted or unrestricted free agent may be designated by his prior club as its franchise player or transition player.

What is the time period for free agency signings this year?

For restricted free agents, from March 9 to April 21.  For unrestricted free agents who have received the May 9 tender from their prior club, from March 9 to July 22 (or the first scheduled day of the first NFL training camp, whichever is later).  For franchise players, from March 9 until the Tuesday following the 10th week of the regular season, November 14.  No players were designated as transition players this year.  If the above-listed players do not sign by November 14, they must sit out the season.

What is the difference between a restricted free agent and an unrestricted free agent?

In the 2017 league year, players with three accrued seasons who have received a qualifying offer become restricted free agents when their contracts expire at the conclusion of the 2016 league year.  Unrestricted free agents have completed four or more accrued seasons.  An unrestricted free agent is free to sign with any club with no draft choice compensation owed to his old club.

What constitutes an "accrued season"?

Six or more regular-season games on a club's active/inactive, reserved/injured or reserve/physically unable to perform lists.

What could restrict the ability of a restricted free agent to sign with a new club?

If he has received a "qualifying offer" (a salary tender predetermined by the Collective Bargaining Agreement between the league and its players) from his old club.  He can negotiate with any club through April 21.  If the restricted free agent signs an offer sheet with a new club, his old club can match the offer and retain him because the qualifying offer entitles it to a "right of first refusal" on any offer sheet the player signs.  If the old club does not match the offer, it may receive draft choice compensation depending on the amount of its qualifying offer.  If an offer sheet is not executed on or before April 21, the player's negotiating rights revert exclusively to his old club.  In addition, a player who would otherwise be a restricted free agent may be designated by his old club as its franchise player or transition player.

What determines an unrestricted free agent?

A player with four or more accrued seasons whose contract has expired.  He is free to sign with any club, with no draft choice compensation owed to his old club, through July 22 (or the first scheduled day of the first NFL training camp, whichever is later).  At that point, his negotiating rights revert exclusively to his old club if by May 9 the old club tendered the player a one-year contract for 110 percent of his prior year's salary.  His old club then has until the Tuesday following the 10th week of the regular season (November 14) to sign him.  If he does not sign by that date, he must sit out the season.  If no tender is offered by May 9, the player can be signed by any club at any time throughout the season.

What determines a franchise player?

The salary offer by a player's club determines what type of franchise player he is: exclusive or non-exclusive.

An "exclusive" franchise player – not free to sign with another club – is offered the greater of (i) the average of the top five salaries at the player's position for the current year as of the end of the restricted free agent signing period on April 21; or (ii) the amount of the required tender for a non-exclusive franchise player, as explained below.

Article 10, Section 2(a)(i) of the CBA sets forth the methodology, known as the "Cap Percentage Average," for calculating the required tender for a non-exclusive franchise player:

The Nonexclusive Franchise Tender shall be a one year NFL Player Contract for (A) the average of the five largest Prior Year Salaries for players at the position . . . at which the Franchise Player participated in the most plays during the prior League Year, which average shall be calculated by: (1) summing the amounts of the Franchise Tags for players at that position for the five preceding League Years; (2) dividing the resulting amount by the sum of the Salary Caps for the five preceding League Years . . . ; and (3) multiplying the resulting percentage by the Salary Cap for the upcoming League Year . . . (the "Cap Percentage Average") . . . ; or (B) 120% of his Prior Year Salary, whichever is greater . . . .

If a club extends a required tender to a "non-exclusive" franchise player pursuant to this section, the player shall be permitted to negotiate a player contract with any club, except that draft choice compensation of two first-round draft selections shall be made in the event he signs with a new club.

How many franchise players and transition players can a team designate each season?

A club can designate one franchise player or one transition player among its potential restricted or unrestricted free agents.

Can a club decide to withdraw its franchise or transition designation on a player?

Yes.  A club can withdraw its franchise or transition designation, and the player then automatically becomes an unrestricted free agent, either immediately if the tender is withdrawn after the start of the 2017 league year, or when his 2016 contract expires if the tender is withdrawn before the start of the 2017 league year.

What is the salary cap for 2017?

The salary cap is $167 million per club.

When must teams be in compliance with the salary cap?

At the start of the 2017 league year, which begins at 4:00 p.m. ET on Thursday, March 9.

If a team is under the salary cap at the end of a given season, can the team "carry over" room to the next season?

Yes.  A team may carry over room from one league year to the following league year by submitting notice to the NFL prior to 4:00 p.m. ET on the day following the team's final regular-season game, indicating the amount of room that the club wishes to carry over.

What is the maximum amount of room that a club can carry over?

A.  One hundred percent of its remaining room.


We hope we included all of the frequently asked questions about free agency. If you find a term we did not explain for free agency, feel free to contact us and we'll add it.

FAQ questions courtesy of the National Football League.