Explaining NFL Free Agent Designations

Posted on February 3, 2015February 3, 2015 by Jason Fitzgerald

Here is our updated look at the type of NFL free agents and explaining some of the ways to look at free agency.

Unrestricted Free Agents– These are players who have at least four years of accrued service in the NFL, whose contracts expire or void following the 2014 season. An accrued year is defined as a season in which a player was on a NFL roster for at least 6 weeks, which includes injured reserve. These players are only eligible to sign a contract with their current team between now and 4PM on March 10, 2015. On March 7 unrestricted free agents can begin to negotiate with other teams, but they may not sign new deals until the 10th. UFA’s do count towards the compensatory pick equations that are used to compensate teams who lose more valuable or total UFA’s than they sign.

Every UFA is eligible for the franchise or transition tag, unless it is explictily stated otherwise in his contract. Teams have between February 16 and March 2, 2015 to apply the tag to a player. A team may only use the tag on one player each season. The application of the tag means the team extends a one year, fully guaranteed contract to player worth a running average of the top 5 or 10 salaries at his position as a percentage of the salary cap over the prior five seasons. Because the salary is so high it is usually only reserved for top free agents.

Once the tag is applied the team receives the right of first refusal on any contract offer a player signs with another team. In addition, if the franchise tag is used the team will receive two first round draft picks as “trade” compensation if the player signs with another team. Because of that provision the franchise tag essentially bars unrestrictred free agents from free agency and locks them into negotiating only with their current team.

There are usually tiers/waves to unrestricted free agency. The Tier 1 players are the big name players who break the bank within the first few days of free agency. These players are the biggest name talent such as Ndamukong Suh and Dez Bryant. Such players receive large guarantees that likely run into the third year of a contract and genuinely excite the fanbase as a signal of change. These names appeal to even the most casual of football plans.

The Tier 2 free agent won’t command as much money but often proves to be more of a value. Some teams will only target this tier of player from day 1 while others may wait the Tier 1’s out and then jump to the second tier which is a backup plan of sorts. Often these Tier 2s are the ones that people like me may say “that’s a pretty good value compared to…” and more diehard fans see strong benefits in the player. Both the free agent and the team sometimes will wait to see if the free agent trends shown by the tier ones changes the salary dynamic, though there is a risk to that strategy.

Tier 3 free agents are those who may have something to prove. These are players that may wait out the free agency process or need to wait until others are signed to try and locate ideal situations. They might be a veteran coming off an injury or two, such as Brian Orakpo, or a young player who fell out of favor with a new coaching staff or had something else impact his play. Such players can be very cheap and sign for bargain basement prices with an eye on the future. In many cases they want to find the best situation (long term opportunity, stable staff/front office, etc…) that can provide them with a true audition rather than taking a few extra dollars with a less desireable situation.

Tier 4 free agents are those who may have difficulty finding a home in the spring and may be working through the early summer or training camp months to find a position. They likely need to wait out the draft and then find teams that did not fill holes with drafted players. These are the players that will be competing with the low draft picks and undrafted players for those last few spots on a roster in camp.

Restricted Free Agents– These are players that have at least three years of accrued service in the NFL. Due to changes in the draft process, which now mandates four year contracts, these players are almost exclusively Undrafted Free Agents. In this case the team with which they finished the 2014 season holds the right through March 10 at 4PM to extend a tender offer to the player. A tender allows the former team to exhibit a level of control over the player in free agency, similar to the franchise tag. At a minimum every tender allows them to match the offer sheet made by another team. RFAs are allowed to negotiate with other teams, even if a tender is applied, starting at 4PM on March 10. Tenders count on the salary cap as soon as applied, provided they factor into the Top 51, which most do.

The team can place one of three tenders on the player. The highest tender is the 1^st round compensation tender, meaning if another team signs the player and the original team decides to not match it the new team will have to give the team a 1^st round draft pick in 2014. If the team does not own their first round pick (such as the Bills) they are unable to sign the restricted free agent. The other tenders are a 2^nd round tender, original draft round, and finally right of first refusal tender. The ROFR means you get no compensation if you decide to not match the offer sheet. Teams have five days to match the new offer sheet. During that time period the player will count on both teams’ salary cap.

The tender offer is a non-guaranteed one year contract amount based on the compensation level. In 2014 the tenders were $3.113 million for the 1^st round tender, $2.187 million for the 2^nd round tender, and $1.431 million for the original round and ROFR tenders. Those numbers will rise by a minimum of 5% and a maximum of 10% this season, with the number being based on the official salary cap limit. The RFA free agency period is shorter than that of the regular unrestricted free agent, ending this year on April 24. Once the April 24 deadline passes the player can only negotiate with the team that tendered them.

Often once the RFA free agency period is complete teams will use the leverage to reduce the costs of these contracts, specifically for the low tendered players, since they know the players’ options are limited. What they will do is offer the player a minimum salary and a guaranteed bonus somewhere between $100,000 and $300,000. The total compensation is lower but at least there is some job security.

Just because a player is extended a tender does not mean he can’t find a new home. Teams will sometimes work out trades for these players at lower compensation levels. For example the Saints tendered RB Chris Ivory in 2013 at the 2^nd round level with the hopes of trading him as he was going to be unaffordable on their salary cap once the roster expanded to 53 players. Before the draft he was traded to the Jets where he signed a three year contract.

If a player is not tendered or the tender is rescinded before a player is signed he immediately becomes an unrestricted free agent that is free to sign with any team in the NFL. These players should not factor in the compensatory draft equations. It is rare that RFAs switch teams but it does occasionally happen- last season Andrew Hawkins signed an offer sheet with the Browns which the Bengals failed to match.

Exclusive Rights Free Agents– Players with less than two accrued seasons are the exclusive property of their former team provided the team makes a one year tender offer for the minimum salary. So for a player that was in his first year in 2014 on a $420,000 contract, the team will place a $510,000 tender on the player and own his rights, assuming he earned a credited season (if no credited season was earned the player woud receive a $435,000 tender). Unlike RFA’s the ERFA is not allowed to negotiate a contract with another team once the tender is applied. Essentially they are locked in for another season with their original team. If no tender is made or the tender is rescinded then the player becomes and unrestricted free agent. If that occurs they do not factor into the compensatory equation. Tenders count on the salary cap as soon as applied, provided they count in the Top 51, which they usually do not.

Street/Other Free Agents– These are players who had contracts that extended into at least 2014 with a NFL team but were released from the contract. Players who were released or not on an active roster prior to the playoffs were free to sign futures contracts for the 2015 League Year in January. Now that the Super Bowl is complete, teams can begin to release players under contract for 2015. Unlike unrestricted free agents who are not allowed to sign until March 10, these players are free to sign with any team in the NFL once released from their contract.

Usually players released from their contract during this period are those who don’t factor at all into the future plans of a team and the team sees fit to let them have an early chance at free agency, which is what occured last season with D’Qwell Jackson of the Browns. These players do not factor into any compensatory equations and would be the type of free agent that draft conscious teams like the Ravens and Packers would target once available.

We maintain a very accurate database of free agents at OTC that is often used (and copied) by other sites. I dont think you will find a better resource than the one here though. We list every UFA, RFA, and ERFA that we know of (some mistakes in status are bound to happen so please let me know if you see an error) and once loaded you can use the menu above the table to quickly change the view without having to reload pages or anything like that. So you have the option to select all unrestricted free agents in the NFL and then drill that down into position or by team by simply slicking a menu button. Or just to look at every position there is.

We are the only site that I know of that breaks the offensive line down into all 5 positions and defensive tackles down into what defense they play. we’ll also be updting for some other positions in the future. Players are listed in order of their prior contract annual value, but you can click on a table header to change that. I firmly believe that this is the best free agent resource you can find.

If you want to learn more about the draft process and compensatory picks check out Nick’s draft page he developed that includes his process for identifying all the compensatory selections in the draft. This compensatory forecast is unique to OTC so when you see it showing up elsewhere just know it came from here. We have estimates for each teams salary cap pool there as well.

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Utilizing Free Agency to Build a Team

Posted on August 15, 2013 by Jason Fitzgerald

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As Ryan continues his excellent State of the Rebuild series, in which he looks at new General Managers and their situations, I thought it might be worthwhile to just give a general overview of the manner in which teams are utilizing free agency to build their starting rosters for the 2013 NFL season. For this I will look at the AFC (I’ll be happy to run the numbers for the NFC if requested) and use the current starting players listed on Ourlads depth charts. Traded players do not count when looking at free agency unless they signed a new contract with the team. For example Chris Ivory of the Jets would count (though he is not listed as a starter) but Alex Smith of the Chiefs would not.

Free agency is often a short sighted approach to building a football team. The NFL is a young man’s game and often the most productive years for a player come during the first six or seven seasons of a career. For some teams this leads to a philosophy of extending draft picks early in their careers. The manner in which this works is that a team, after a players third season in the league (it used to be his second season), extends the player for a period of anywhere from three to five seasons on top of his existing contract.

The benefit to this is that the player is locked up for what are considered his “prime” football years with minimal down the road impact if the player needs to be released for dropoff in performance. The reason the impact is minimized is because bonus money can only be prorated over a 5 year period, leaving the final extension years often clean from a salary cap standpoint. Teams also have a great deal of leverage in these early extension negotiations and can lock up players at below market values. In general you are sacrificing the salary cap benefit of the rookie contract for long term salary cap flexibility. The 49’ers, Packers, and Eagles have all been major proponents of this strategy.

Of course there is risk involved in this strategy. First of all you have a very small sample size of real game action to evaluate the player. For many players you can throw a rookie season out simply due to the immense learning curve of the NFL, leaving a team with just one or two years to evaluate the talent. If the talent busts you are stuck with cap charges you never would have had if you allowed him to play the rookie contract out. This is how the Patriots got into cap problems with Aaron Hernandez. While that is an extreme example it shows the negative side of the early extension.

It can also be a difficult strategy to stick with because GM’s jobs are directly tied to wins and losses and this strategy is a better long term rather than short term strategy. You are sacrificing the opportunity to get better immediately to stay better over a longer period of time, which could lead to some losing seasons early in the philosophical transition. That often leads to a team going in the other direction and looking to build via free agency.

There are various types of building through free agency. There is the more short term enhancement designed to put a “win now” team over the top. The Broncos would be an example of this. They will have nearly $20 million(as measured by annual value) in new talent take the field for them this year, but three of those four players are signed for 2 or fewer seasons. This, in essence, gives the team a great escape if the “win now” team doesn’t win. There is no long term commitment whatsoever.

There is the barren roster situation which would be exemplified by the Raiders. The Raiders are essentially an expansion team and need bodies on the field. They have eight new starters signed as free agents, tied for most in the AFC. They are not signing them to turn the franchise around; it’s simply better than the alternative of the completely unknown undrafted free agent. Of those eight, six will be free agents after this season. It is a stop gap solution with no long term damage.

There are other teams that see free agency as an opportunity to add one or two big pieces to the long term plan of the team. The Browns and Titans would both fit in that category. They added some significant big money players but not to the point where it completely overhauls their roster. These players are not short term solutions either but more admissions of either draft failures or a desire to not spend future draft allocations on these positions.

Finally you have the complete rebuilding approach. I find this to be the most fascinating to watch unfold because the expectations are not so much to build on what is in place but to turn a franchise completely around in a very quick manner. Failure at the early stages of this process often lead to significant salary cap damage down the line. This strategy is completely opposite to the “extend early to avoid the cap pain late” approach. Teams that build this way often do not have a happy ending when the 28 year old free agent makes the turn past 30 and they have all kinds of guarantees or bonus prorations in their contracts. What makes this even more difficult is that you are not putting one or two parts into an existing system but multiple pieces. With limited practice time in the preseason it can leave units of 11 that need to function as 1 right out of the gate struggling for answers on the field. By the time they figure things out the season could be lost and GM’s jobs will be in jeopardy.

The two AFC teams utilizing this strategy this year are the Miami Dolphins and Indianapolis Colts, though there are differences to both internally in the way that they approached this. Miami is one of the most unique attempts at a quick rebuild that I can recall. They have more or less been waiting for the last two years for contracts to run out so that they had significant money to spend. Miami doled out over $42 million in annual salary to other teams’ free agents. That is nearly $8.5 million more than the next closest team. They will have 7 new starters this year, nearly 1/3 of their starting roster.

What makes their situation even more unique is that for all this money spent, $13.5 million of it is just for one year rentals. That $13.5 million represents the contracts given to TE Dustin Keller, CB Brent Grimes, and RT Tyson Clabo. Normally you would expect this more on a “win now” team where you go all in on a few short term pieces, but the Dolphins have shown no signs of being that type of team. They have been a steady as a rock 6 to 7 win team since their trip to the playoffs in 2008.

They also have five other starters in their walk year (Randy Starks, Paul Soliai, Chris Clemons, Koa Misi, and Richie Incognito) which could keep the Dolphins in line for another major overhaul in 2014. With a good deal of cap room to carry over into 2014 and some wiggle room to restructure existing contracts, Miami could conceivably go on a large spending spree again in 2014, potentially under a new GM if the team fails in 2013. So it’s not really a big window of opportunity for the team as presently constructed but more of a one year vision with an open window to improve internally and externally in the future.

The Colts are different. They have taken an approach that you can take a relatively young overachieving team, and I’m not sure any team has ever overachieved more than the Colts last season, and quickly take it from the learning stages right into the advanced playoff stages. Indianapolis will have 8 new starters in 2013, 5 of whom are signed for 4 or more seasons. They committed 26 seasons to these 8 players so this was a long term plan, not a short term fix.

But the Colts are also making a leap of faith on the talent they acquired. These players are not so much proven talents as they are key backups now expected to start. The 8 players only combined for 72 starts in 2012. S LaRon Landry and RT Gosder Cherilus are really your only true proven starters. Almost everyone else the team signed long term comes with a huge “buyer beware” sign and the decisions left a number of people around the league wondering why they paid so much for some of the players.

That said I would consider this a more traditional approach to building via free agency with long term deals as the centerpiece. Normally teams might wait one more season rather than right after the rookie year of a number of key pieces but the Colts are young and cheap enough to where this may just be the prelude to the main event which could take place in free agency in 2014. They will be tough to outbid next year if they want to add more pieces.

I do think that many teams will watch the success or failure of the Colts and Dolphins very closely. There are a number of teams that are going to have significant cap room next season and what could be impatient owners and/or fanbases that want to see results fast. These teams include the Raiders, Jaguars, Jets, Browns, and Bears. If the Dolphins can go from a 7 win to an 11 win team it is going to be hard to state that you want to avoid free agency and build via the draft on a 3 year plan. But if Miami goes 7-9 again and the Colts fail to make the playoffs it will likely be another reason to not go wild in free agency.

A lot may hinge on these types of teams besides free agency philosophies. Spending in general was down last season on most positions other than QB and WR. The flat salary cap has made some teams a bit more cautious than they were in the past with their spending and as a result free agency in 2013 was almost a non-event outside of a handful of contracts. Players need some of these big money contracts to actually result in improved won-loss records and playoff success to convince teams that spending is just as important as drafting.

I’d actually say it is far more important to the players to see players like Mike Wallace and Paul Kruger help turn the fortunes around of their franchise than it would be for a bargain chip like Wes Welker to push the Broncos to the Super Bowl. While a player like Welker would show that you can enhance your results by participating in free agency, his next to nothing contract would still signal that teams should put low caps on their offseason evaluations. If the big money items make a meaningful splash more bidding wars could ensue.

The following chart illustrates the annual amount spent per team on 2013 starters that came via free agency. The two lines show how many players were signed and how many total years were potentially invested in those players. If you would like to see an overview of the NFC feel free to send me an email.

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Unrestricted Free Agents: Gains and Losses

Posted on June 6, 2013 by Jason Fitzgerald

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