The term “free agency” refers to the state where a professional sports player can freely seek out employment and contracts with other professional teams. Free agency occurs when a player’s contract expires, or the player opts out. A player who can participate in free agency is called a “free agent.” The rules for free agency are specific to each sports league and are determined by the collective bargaining agreement (CBA).

Different Types of NFL Free Agents

In the NFL, there are two types of free agents: the unrestricted free agent and the restricted free agent.

What’s the Difference Between an Unrestricted Free Agent and a Restricted Free Agent?

  • Unrestricted Free Agent: An unrestricted free agent can sign with any team. Once a player with four or more seasons of NFL experience reaches the end of his player contract, he becomes an unrestricted free agent.
  • NFL Restricted Free Agents: An NFL restricted free agent can sign with any team with restrictions. Players who have completed three seasons of service and whose contracts have expired are restricted free agents. Old teams make them offers, and they are free to negotiate with other teams. When a player accepts an offer from a new team, the old team can match the offer or not. Depending on the level of compensation, the old team may receive draft-choice compensation if it does not match the offer.

Restrictions on Restricted Free Agents

Teams have two options when it comes to securing their own free agents in the NFL. These are the franchise tag and transition tag:

  • Franchise Player: When a team tags a player as a “franchise player,” that player is restricted in his free agency negotiations. Depending on how much a team pays a franchise player, he will either be an “exclusive” franchise player or a “non-exclusive” franchise player.
    • Exclusive franchise players can only negotiate with their former teams. A non-exclusive franchise player can negotiate like a restricted free agent. If the old team does not match the new offer and the non-exclusive franchise player signs with a new team, compensation must be two first-round picks.
  • Transition Player: When a team tags a player as a “transition player,” that team has the right to match any offer for 7 days. The old team loses the player if they do not match. In order to qualify as a transition player, a team must offer a minimum of the average of the top 10 salaries of last season at that player’s position or 120 percent of the previous year’s salary.

What Are the Free Agency Rules for Restricted Free Agents?

A player with three accrued seasons who has received a “qualifying offer” (a salary tender predetermined by the Collective Bargaining Agreement between the league and its players) from his old club can negotiate with any club until April 22. Because the qualifying offer grants the old club a “right of first refusal” on any offer sheet signed by the restricted free agent, the old club can match the offer and retain him.

Depending on the amount of its qualifying offer, the old club may receive draft-choice compensation if it does not match the offer. A player’s exclusive negotiating rights revert to his old club if an offer sheet is not executed by April 22. Prior to the start of free agency, an old club may designate a restricted free agent as a franchise player or transition player.

What Makes a Player an Unrestricted Free Agent?

An unrestricted free agent is a player whose contract has expired after four or more seasons. No draft-choice compensation is owed to his old team until July 22 (or the start of the first training camp in the NFL, whichever comes first). When that happens, his exclusive negotiating rights revert to his old club if the old club offers him a one-year contract for 110 percent of his prior year’s salary by May 2.

After that, his old club has until the Tuesday following Week 10 of the regular season (November 15) to sign him. He must sit out the season if he does not sign by that date. A player can be signed by any club at any time during the season if no tender is offered by May 2.

How Often Can a Player’s Contract be Renegotiated?

A veteran’s contract can be renegotiated at any time, but additional salary increases during the original term of the contract can only happen twelve months after the most recent renegotiation. A team can’t renegotiate terms from any prior year of a contract. Terms for the current season cannot be renegotiated after the final regular-season game.

How Much Will the Salary Cap be in 2022?

Each club has a salary cap of $208,2 million.

What Is the Deadline for Teams to Comply With the Salary Cap?

The deadline is by the start of the 2022 league year, which begins at 4:00 p.m. Eastern Time on Wednesday, March 16.

Could a Team “Carry Over” Unused Salary Cap Space from One Season to the Next?

It is possible for teams to carry over room from one league year to the next by notifying the NFL by 4:00 p.m. ET on the day following the team’s last regular-season game, indicating how much room the club wishes to carry over.

Signing Bonuses

A player earns money for signing his contract. This is usually paid out within the first 12-18 months based on a prorated salary cap for the life of the contract (five seasons at most). The Lions were able to give Matthew Stafford a $50 million signing bonus in 2017 because of this. Stafford’s signing bonus counted for $10 million against the Lions’ salary cap for each of his first five seasons.

Roster Bonuses

Staying on a team’s roster until a certain date earns you compensation. In the season in which they are earned, roster bonuses count in full against the salary cap unless they are fully guaranteed at signing. This avoids signing-bonus proration, which pushes dead money into the future.

Per-Game Roster Bonuses

Roster bonuses are awarded to players who are on the team’s gameday roster (47 or 48 players) or active roster (53 players), as determined by their contract. In a 17-game season, a player who receives a $1.6 million roster bonus for being on the gameday roster would earn $94,117 for each game he plays. Contract clauses that previously provided for 46- and 53-man roster bonuses will be amended to reflect the new roster sizes.

Option Bonuses

A team (or player, at times) has the option to pay a bonus to exercise the remaining terms and conditions of the contract. The bonus will be prorated over the life of the contract (like a signing bonus, up to five seasons).

Salary escalators

Salary escalators are similar to incentives in that they are triggered by attaining certain performance thresholds. But the extra money isn’t always guaranteed.

Earned escalators translate to a raise in a future year(s). The escalator does not apply if a player is released prior to the start of a non-guaranteed season. Also included are de-escalators that lower a player’s salary for failing to meet performance targets.

Do I Need a Lawyer?

Experienced entertainment lawyers or agents are skilled in the art of negotiation. Since professional athletes only have a limited amount of time to maximize their salaries, hiring a sports lawyer to handle salary negotiations could help you maximize your profits.