A little while ago, ProFootballTalk.com posted their “Free Agent Hot 100” list, which, as you might guess, is their list of the top 100 NFL free agents this offseason. As I scrolled through the list, something stuck out to me: only 5 of the players on the list are restricted free agents (“RFA’s”). Although RFA’s historically generate little interest on the free agent market, it seems this year there are only a few quality ones to pursue anyway. For now, I wanted to focus on wide receiver Victor Cruz of the New York Giants, who is the only RFA in the top 50 (PFT has him ranked at #3). Obviously, the most ideal scenario for both Cruz and the Giants is to reach an agreement on a long-term deal or, at least a contract that’s more than one year. However, if they are unable to reach an agreement, Cruz will undoubtedly return to the team on a one-year contract in 2013.
Let’s take a look at RFA basics first. Article 9 (“Veteran Free Agency”), Section 2(a) of the CBA states that any veteran player with three accrued seasons, but less than four accrued seasons, at the expiration of his last contract is a RFA. At this point, the player can negotiate and sign a contract with any team. However, there are some protections built in for the player’s former club if the player signs elsewhere. In order to receive these protections, the prior club must offer the player a Qualifying Offer on or before the first date of the RFA signing period. This year, the deadline for an RFA’s prior club to submit a Qualifying Offer to the player is March 12th. It should be noted here that if the prior club does not submit a Qualifying Offer to their RFA, or if they withdraw the Qualifying Offer prior to the conclusion of the RFA signing period, the RFA becomes an Unrestricted Free Agent and whatever team signs him will not be subject to any compensation to the RFA’s prior club.
At this point, the question is, what exactly are the protections the prior club can gain by making their RFA a Qualifying Offer? The answer to that question is as follows:
1) If the prior club simply wants the right of first refusal to any offer sheet the RFA may sign with another club, the prior club must simply make the RFA a Qualifying Offer for one-year with a Paragraph 5 Salary (the player’s base salary) of $1.323 million.
2) If the prior club wants both the right of first refusal AND draft pick compensation in the round the RFA was originally drafted in, the prior club must make the RFA a Qualifying offer for one-year with a Paragraph 5 salary of $1.323 million OR 110% of the player’s prior year Paragraph 5 Salary, whichever is greater. Basically, if last year the player’s base salary was even a penny more than $623,00, then the prior club is forced to opt for the second option and pay the RFA 110% of his previous season’s base salary.
3) If the prior club wants both the right of first refusal AND draft pick compensation in the 2nd round of the upcoming draft, the prior club must make the RFA a Qualifying offer for one-year with a Paragraph 5 salary of $2.023 million OR 110% of the player’s prior year Paragraph 5 Salary, whichever is greater. For this option, the team will have to pay 110% of the RFA’s prior season base salary if that player’s previous season base salary was more than about $963,333.
4) Finally, If the prior club wants both the right of first refusal AND draft pick compensation in the 1st round of the upcoming draft, the prior club must make the RFA a Qualifying offer for one-year with a Paragraph 5 salary of $2.879 million OR 110% of the player’s prior year Paragraph 5 Salary, whichever is greater. For this option, the team will have to pay 110% of the RFA’s prior season base salary if that player’s previous season base salary was more than about $1,370,952.
So what does this mean for Cruz and the Giants? Let’s see what their Qualifying Offer to Victor Cruz will have to be for each of the four options listed above. Keep in mind that Cruz’ base salary in 2012 was $490,000.
1) Right of first refusal: One-year, $1,323.000.
2) Right of first refusal and draft pick compensation in the round the player was drafted in (Cruz wasn’t drafted, but let’s pretend he was for this option): $1,323,000. 110% of Cruz base salary last year would be $539,000, so the Giants would have to go with the greater number.
3) Right of first refusal and second-round draft pick compensation: $2,023,000.
4) Right of first refusal and first-round draft pick compensation: $2,879,000.
As you can see, all of the Giants’ Qualifying Offers would simply be the set amount designated by the NFL and not 110% of Cruz’ 2012 base salary because 110% of his base salary would be the smaller figure. There are still six days for the Giants to make a Qualifying Offer; they are expected to tender Cruz at a first round level (meaning a Qualifying Offer of $2.879 million). As I mentioned above, the most ideal situation for both sides is to come to an agreement on a longer contract. Signing Cruz long-term gives Cruz security and the Giants a high-level WR for years to come while a one-year deal means there’s a higher chance Cruz signs elsewhere after next season. Of course, even if parties are forced to settle on a one-year deal via a Qualifying Offer, that doesn’t mean they can’t agree on a longer contract immediately after. The one-year deal will likely just serve as a barrier to Cruz becoming an Unrestricted Free Agent (which would happen if the Giants didn’t make a Qualifying Offer) while the parties work out a longer contract.
To check out the Giants current salary cap situation, click here.