American Football

How does NFL free agency work? The most common type of player movement explained.

By Stuart Dick

Published: 13:52, 25 November 2021

The free agency period of an NFL offseason is one of the most hotly anticipated chapters of the year, with all 32 franchises having the opportunity to acquire vital pieces to mount a Super Bowl run.

It’s also a make-or-break time for hundreds of players across the NFL. Star players can ensure a healthy payday and the opportunity to compete for a championship ring. A middle tier of emerging and established veterans seeks the same, along with added level of job security. Meanwhile, players further down the pecking order are hoping for a spot on an NFL roster for at least one more season.

We discuss the various nuances that go into the NFL free agency period: the salary cap, franchise tags, transitional tags and when the 2022 period begins.

Who is available in Free Agency?

Unrestricted Free Agents (UFA)

A player becomes an unrestricted free agents (UFAs) once he has amassed four-years’ service in the NFL and his contract expires. Once that contract expires, a UFA is free to sign with another team – though the team losing said player may earn a ‘compensatory’ draft pick from the NFL.

Restricted Free Agents (RFA)

A player who has amassed three years’ service in the NFL and reached the end of his contract becomes a restricted free agent (RFA).

The player’s current team has the right to attach a tender to a RFA, in the form of either a first-round, a second-round, or right of first refusal tender.

Any other team may offer an RFA a contract – known as an ‘offer sheet’. If a player accepts this offer from a new team, his original team retains the right to match the offer on the table and retain the player. If the original team chooses not to match the offer, they will receive compensation in form of a draft pick at the level of the tender applied.

Predicted 2022 RFA Tender values
First Round Tender: $5,479,00 (£4.1 million)
Second Round Tender: $3,927,000 (£2.95 million)
Right of first refusal: $2,396,000 (£1.8 million)

Exclusive-rights free agent

A players who has amassed no more than two years’ service time in the NFL and reach the end of his contract becomes ‘exclusive-rights free agent’. If his current team tenders him an offer – usually a one-year deal on a league minimum salary – the player may not negotiate with other teams, and must either sign the tender or sit out for a year.

 

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How does the salary cap work?

The salary cap is the financial limit NFL franchises are allowed to spend when it comes to filling their 53-man rosters. Incidentally, there is also a salary floor that teams must stay above at all times. The cap adjusts each year depending on a number of factors – the National Football League Players’ Association (NFLPA) Collective Bargaining Agreement and the economic situation within the sport. It can can even be affected by the financial situation across the globe, as witnessed by the reduction in the cap during the COVID-19 pandemic.

The current cap is set at $182.5 million (£137 million) – a drop from $198.2 million (£148.7 million) a year ago, the first time the cap has dropped since its introduction.

However, media is already speculating that the 2022 salary cap will be in excess of $200 million (£150 million), thanks largely to an historic new TV rights deal. This means that many teams will have cash to splash in the coming offseason’s free agency period.

There are a number of penalties at the NFL’s disposals for breaches of the salary cap. The NFL can fine a team up to $5 million (£3.75 million), confiscate draft picks, or even cancel contracts.

The original salary cap was brought into the NFL in 1994 as means to prevent teams with the highest spending power from acquiring all of the best players in free agency. The initial cap was set at $34.6million (£26 million) – not even enough to afford Patrick Mahomes, Josh Allen or Dak Prescott in 2021, let alone fill out an entire team!

What is the franchise tag and how is it used?

The franchise tag is a mechanism an NFL team can use to retain a star player who is set to become a UFA, without allowing the  player to enter into free agency. The tag was introduced into the NFL in 1993. From a franchise’s perspective, the franchise tag is crucial to ensuring that one of its best players is not lost for nothing. However, ‘being franchise tagged’ often angers the player in question, who is required to play on a one-year contract with no long-term security. In some cases this leads to a player holding out while attempting to negotiate a longer-term contract extension with the team.

It must be said that the one-year deal does does pay the player a handsome salary, equal to the average of the top five salaries at his position. If the player in question already earns more than the average of the top five salaries; he receives 120% of his previous year’s salary.

A franchise tag can be exclusive or non-exclusive. Exclusive tags forbid other teams from negotiating with a player, while non-exclusive tags allow other teams to negotiate with the player – for the price of two-first round draft picks should the player opt to sign with a new team.

Teams may use the franchise tag on the same player for up to three consecutive years. A second successive franchise tag requires the team to pay 120% of the player’s previous year’s salary, while third successive tag calls for a 144% increase in salary from the previous year, or an average of the top five quarterback salaries, regardless of the position of the tagged player.

Current projected 2022 franchise tag salary by position (top 5 average salary)

Quarterback: $28,583,000 (£21.5 million)
Defensive End: $20,186,000 (£15.2 million)
Wide Receiver: $19,127,000 (£14.4 million)
Cornerback: $17,426,000 (£13.1 million)
Linebacker: $17,417,000 (£13.1 million)
Defensive Tackle: $16,888,000 (£12.7 million)
Offensive Line: $16,698,000 (£12.7 million)
Safety: $13,543,000 (£10.2 million)
Running Back: $12,523,000 (£9.4 million)
Tight End: $10,834,000 (£8.1 million)
Kicker and Punter: $5,469,000 (£4.1 million)

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What is the Transition Tag and how is it used?

The transition tag works in a similar way to the franchise tag. NFL teams have the opportunity once a season to place the transition tag on a UFA. The transition guarantees the player’s current team the ‘right to first refusal’ – essentially the opportunity to match any offer made by another franchise.

The salary for a ‘transition tagged’ player amounts to the average salary of the top 10 players at that position, or a 20% percent increase on the player’s salary, whichever is greater.

If a new team submits an ‘offer sheet’ which is accepted by a ‘transition tagged’ player, the original team has seven days to match the offer. If the original team matches the offer, the player is forced to re-sign with the team.

If the original club declines to match the offer they receive no compensation – unlike the franchise tag.

Current projected 2022 transition tag salary by position (top 10 average salary)

Quarterback: $25,641,000 (£19.3 million)
Defensive End: $16,622,000 (£12.5 million)
Wide Receiver: $16,740,000 (£12.6 million)
Cornerback: $14,989,000 (£11.3 million)
Linebacker: $14,882,000 (£11.2 million)
Defensive Tackle: $13,596,000 (£10.2 million)
Offensive Line: $14,997,000 (£11.3 million)
Safety: $11,264,000 (£8.5 million)
Running Back: $10,140,000 (£7.6 million)
Tight End: $9,331,000 (£7 million)
Kicker and Punter: $4,978,000 (£3.7 million)

When does 2022 Free Agency begin?

The free agency period traditionally starts on the first day of the new league year. The 2022 NFL year is set to begin on Wednesday, March 16. This will be the first day that teams can officially sign free agent players.

However, in years past, teams would illegally contact and arrange contracts with players prior to free agency beginning. As a result, in recent years, the NFL has introduced a 48-hour ‘legal tampering period’ prior to the new league year, allowing players and teams to negotiate prior to the official start of free agency. During this period, which will begin on Monday, March 14, 2022, deals are regularly announced prior to official confirmation.

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