This is the time of year when we start to hear the word tenders thrown around a lot when talking about NFL contracts. Every year it seems to lead to some confusion as to what each tender means so let’s take a look at the various tender levels and break each one down.
Exclusive Rights Free Agent (ERFA) Tender
This is usually the tender that is most active in late February or early March. The ERFA tender applies to any player whose contract is expiring and he has no more than two accrued seasons in the NFL (an accrued season is a season with at least six games on the 90 man roster or one game this year if they were on the teams opening week roster). The tender carries no guarantees and is for the minimum salary that the CBA allows a player to play for. Because the salaries are so cheap, for most teams it makes no impact on a team’s salary cap position if they already had 51 players under contract. Basically this is no different than a futures deal impact.
The ERFA tender does block free agency so once a player is tendered there is really no reason for them not to sign the tender. In many cases players will sign a new contract rather than be tendered though too often those contracts contain splits and waivers which would not exist if tendered.
Restricted Free Agent (RFA) Tender
The RFA tender only applies to players who have three, and only three, accrued seasons in the NFL. The tender level for a RFA is much higher than the ERFA tender and shows an intention to make a higher commitment to a player, though again nothing is guaranteed on the RFA tender. Unlike the ERFA tender the RFA tender does not prevent a player from exploring free agency, but it is not exactly free. The level of the tender determines what compensation, if any, a team will receive if the player signs a free agent contract with another team. The higher the cost of the tender the more value a team can get back if the player signs with another team. That draft compensation usually scares teams away.
There are four tender levels and their cost is somewhat dependent on the salary cap. The most common one is for the right of first refusal. That should cost $2.133 million this season. This tender levels gives the players former team the right (but not the obligation) to match an offer made by another team. If they fail to match the offer they receive no compensation.
The second tender is compensation at the players original draft round plus the right to match the offer instead of the draft compensation. This tender only applies to players who were draft picks and because all draft picks sign four year contracts it rarely comes into play. The cost of this tender is $2.183 million.
The third tender level is compensation at the 2nd round level plus the right to match the offer. This is the offer that is typically used for the top UDFA’s whose contracts have expired. The cost of this tender should be $3.384 million this season.
The final tender level is compensation at the 1st round level plus the right to match the offer. This tender is almost never used with the exception of the occasional QB such as Taysom Hill last season. The cost of this tender should be $4.766 million.
There is also a quirky rule about paying an extra $500,000 to prevent a no tag designation in an offer sheet but I’ve never seen that utilized.
The RFA tenders start to come in closer to the start of free agency as many teams don’t do it too early. It is important to note that there is nothing guaranteed in these offers and many times the players are released prior to the start of the season or asked to take a pay cut. A very common action will see a team negotiate a contract that guarantees the player a salary between $1.3 and $1.8 million in lieu of the non guaranteed $2.1 million tender. Another common technique is to try to “buy out” the players free agency year in the year after the free agent tender. An example would be to try to negotiate a two year contract with a RFA for a number between $4.5 and $6 million with a guarantee slightly above the original tender and a cash payment slightly above it. The benefit of this is essentially a no-risk potentially cheap second year of a contract.
These are the massive offers that are extended to star players in the NFL. Unlike the other tenders these are guaranteed once the player signs the offer sheet. The amount of the tender depends on the position the player plays and the number varies with the salary cap, but it can never be less than 120% of the players salary from the year before. Typically you must have four accrued seasons to be eligible (teams can use a franchise tag on a RFA as well but I don’t think Ive ever seen it).
The transition tag is lower in cost than the franchise tag but carries no draft compensation if the player signs with another team. The only thing the old team can do is match the offer as the Bears did for Kyle Fuller a few years ago.
The non-exclusive franchise tender carries with it draft compensation of two first round draft picks if the team opts to not match the offer from another team. The exclusive franchise tag is the average of the top five salaries at the position or the franchise tag number, whichever is higher. This tag does block a player from exploring free agency.
In recent years more and more teams are using these tags to try to trade the player. There are some new limitations on that in the CBA though that will apply more in player for player trades which is pretty rare.
Teams usually wait some time to apply the tenders usually only doing so after they have tried to reach an agreement on a long term deal and have been unable to reach that agreement.