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Free Agency Terminology

Posted Feb 17, 2010

On Wednesday vikings.com went over some basic terms that are relative to what will commonly be referred to as the Uncapped Year. While the piece was sufficient in explaining a few key principles that apply to this new NFL environment, there is more detail to discover.

With the help of Vikings VP of Football Administration Rob Brzezinski, vikings.com goes more in depth to define and explain several terms and realities of the what is officially known as the Final League Year.

Remember, free agency begins on March 5 and the 15-day designation period for teams to place the franchise or transition tag on players began on February 11.

Our thanks to Rob for helping us with these terms…

Collective Bargaining Agreement (CBA) – A fully binding agreement that governs all the business that takes place between the League, its owners and the players. When NFL owners and the NFLPA sit down to discuss and eventually agree upon terms regarding wages, hours and working conditions, the finished product is the Collective Bargaining Agreement, or CBA.

The current CBA was ratified in 2006 and was originally a 7-year agreement through 2012. In 2008, however, the owners exercised an opt-out provision which eliminated the last 2 years of the CBA. As a result, 2009 was the last year of the CBA where a salary cap was in effect, making 2010 the Final League Year.

Final League Year - Because of the opt-out clause, 2010 is currently the final year of the CBA and there will be no salary cap. The rules governing the “uncapped year” are intended to motivate both sides (management and players) to extend the agreement. The advantage for the players is that there is no limit to what clubs can pay players. The advantage for clubs is that players must accrue 6 years of service to be eligible for unrestricted free agency, instead of the 4 years formerly required.

There are other nuances in the uncapped year. For example, clubs have the ability to use a Transition Tag (defined below) in addition to a Franchise Tag (also defined below) and clubs that participated in the 2009 Divisional Playoffs have limitations placed on them in free agency.

Free agent – A player who is not currently under contract with any team.

Unrestricted Free Agent (UFA) – Any player with an expired contract who has completed 6 or more accrued seasons. An accrued season is equal to 6 (or more) regular season games on a team’s active/inactive, reserved-injured or "physically unable to perform" (PUP) lists.

Restricted Free Agent (RFA) – Any player with an expired contract who has completed 3, 4 or 5 accrued seasons. If the RFA is extended a qualifying offer (defined below) and doesn’t sign a contract by the appropriate deadline, his rights revert exclusively to his old club. If the RFA accepts an offer sheet (defined below) from a new club, his old club can match the offer and retain him because it has the “right of first refusal.” If the old club does not match the offer, it can possibly receive draft choice compensation depending on the level of its qualifying offer.

Offer Sheet – Any RFA who signs with another club must present his former club with a certificate of the terms of the new contract, which is called the offer sheet. The prior team has 7 days from the time it receives the offer sheet to exercise or not exercise its right of refusal.

Qualifying Offer – A 1-year contract offer given to a RFA by his team that indicates the amount of compensation due if his team declines to use the right of refusal during free agency. There are 4 levels of tenders for RFAs and the amount (in millions) varies depending on whether a player has 3, 4 or 5 accrued seasons…

3

4

5

Original draft round tender

$1.101

$1.176

$1.226

2nd-round tender

$1.684

$1.759

$1.809

1st-round tender

$2.396

$2.521

$2.621

1st- and 3rd-round tender

$3.043

$3.168

3.268

Franchise Tag - The designation given to a player by his team which keeps him from leaving via free agency. Generally, a team has 1 franchise tag per year at its disposal. There are 2 types of “franchise tags” a team can place on a player. The “exclusive franchise” tag prohibits the player from negotiating terms of a contract with any other team. In order to designate the player as an exclusive franchise player, the team must pay him a minimum of the average of the 5 largest 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. The catch here is that the amount of compensation owed to the exclusive franchised player is not based on the 2009 salaries of the top 5 highest paid players, rather, it is based on the 2010 salaries as of April 17 (which is when restricted free agency ends). For example, in 2007 the Indianapolis Colts placed the exclusive franchise tag on DE Dwight Freeney. In effect, Freeney was taken completely off the open market and was able to negotiate only with Indianapolis. To compensate for this, Freeney’s salary was the average of the 5 largest 2007 salaries (as opposed to 2006) for players at his position as of April 20, 2007 or 120% of his 2006 salary, whichever was greater.

The “non-exclusive” franchise tag allows the player to negotiate a contract with other teams. However, draft choice compensation of 2 first-round draft choices will be awarded to the player’s former team should he sign with the new team. For non-exclusive franchise players, the team must tender the player a 1-year contract that is the minimum of the average of the 5 largest salaries (for the prior year) for players at the position at which he played the most games in the prior year, or 120% of his prior year salary, whichever is greater.

A team may tag a given player a maximum of 3 times. The 3rd time the tag is applied the player will receive 144% of the prior year’s salary or the highest franchise tag number for that year, regardless of position. For example, if a team tags their kicker 3 times, the 3rd tag will likely cost the same as the QB position tag number (because the QB tag number is usually the highest).

Transition Tag – The designation given to a player by his team to restrict movement via free agency. Generally, a team has one transition tag per year at its disposal. The team must pay the transition player a minimum of the average of the top 10 salaries of last season at the player’s position or 120 percent of the player’s salary the previous year, whichever is greater. A transition tag designation gives the club a first refusal right to match within 7 days of an offer sheet given to the player by another club. If the club matches, it retains the player. If it does not match, it receives no compensation.

There is one other important note regarding the franchise and transition tags. If either tag is accepted by a given player, those contracts are guaranteed to the player. NFL contracts are generally not guaranteed, but if a player is designated a franchise or transition player, his 1-year contract is guaranteed.

Below is a table defining the 2010 values assigned to each position under the Franchise and Transition Tags.

Franchise Player

Salary/year (millions)

Transition Player

Salary/year (millions)

Quarterback

16.405

Quarterback

14.546

Running back

8.156

Running back

7.151

Wide Receiver

9.521

Wide Receiver

8.651

Tight End

5.908

Tight End

5.248

Offensive Line

10.731

Offensive Line

9.142

Defensive End

12.398

Defensive End

10.193

Defensive Tackle

7.003

Defensive Tackle

6.353

Linebacker

9.680

Linebacker

8.373

Cornerback

9.566

Cornerback

8.056

Safety

6.455

Safety

6.011

Kicker/Punter

2.814

Kicker/Punter

2.629

Important Dates

  • February 24-March 2: NFL Scouting Combine
  • February 25: Deadline for clubs to designate franchise and transition players.
  • March 5: UFA signing period and trade period begins.
  • March 21-24: NFL Owners’ Meetings
  • April 22-24 NFL Draft, New York City.