NFL Free Agency 101
The NFL Free Agency Primer Starts Now
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Tuesday, the NFL opened the franchise/transition tag window for NFL teams. This officially marks the opening of the offseason in my books. Sure, there are players that have been cut or had contracts restructured, but this is truly the first set of dominoes to fall.
I am going to get you all set up for success with giving you some Free Agency classes over the next three days. Here is what the lesson plan will look like:
Free Agency 101
Dates to Know
Free Agency Glossary
Salary Cap Basics
Franchise/Transition Tags
Free Agency 201
Dead Money
AAV vs Cap Hit
Signing Bonuses
Incentives
Cash Flow
Free Agency 301
The Anatomy of a Contract
June 1st Designations
Restructuring vs Extending
Compensatory Picks
To totally brag, this is the stuff I am super well-versed in. I’d say that I know about 90% of the offseason questions you would ask, and if I don’t know I will research until I find out the answer. Doesn’t mean I am perfect and don’t mess up, but these articles won’t have any misinformation.
I am the foremost capologist and offseason expert in the Titans Market. I would bet the house on my knowledge versus anyone else’s that covers the team. This is the article series I am most known for, and probably why you have paid the $4 a month.
Dates to Know
What’s Started Already: Waiver wire system. Players that are cut with 4+ seasons are not subject to waivers. Teams have also already been able to negotiate new contracts or extensions/restructures with any player on their team.
February 21st - March 7th: During this time, teams can tag their players with either a Franchise Tag (exclusive or non-exclusive) or Transition Tag. They have until March 7 at 4 p.m. EST to do so.
March 13-15:Â This is the legal negotiating window before NFL Free Agency begins. Teams are allowed to negotiate with pending unrestricted free agents starting at 12:00p EST on March 13th- 3:59p EST March 15th
March 15th:Â 4 p.m. EST is when the new league year begins, and NFL Free Agents can be officially signed to new teams. This is also an important deadline for bonuses and guaranteed money in contracts. Teams must also be under the salary cap prior to that time. Teams can also officially have their trades go through for 2023.
April 3rd:Â Any team with a new head coach can begin offseason workout programs.
April 17th:Â Teams with returning head coaches become eligible to begin offseason workout programs.
April 27th - April 29th: 2023 NFL Draft
Free Agency Glossary
Top-51 Salary Cap: This is the active salary cap space a team has. When cap space is calculated you take the total of the players with the top-51 cap hits subtract it from the team’s cap space.
Unrestricted Free Agent (UFA): Any player with four or more accrued seasons and an expired contract; free to negotiate and sign with any team.
Restricted Free Agent (RFA): A player with three accrued seasons and an expired contract. RFAs are free to negotiate and sign with any team, but their original team can offer them one of various qualifying offers ("tenders") that come with the right of first refusal and/or draft-pick compensation.
Exclusive Rights Free Agent (ERFA): Any player with fewer than three accrued seasons and an expired contract. If his original team offers him a one-year contract at the league minimum (based on his credited seasons), the player cannot negotiate with other teams.
Accrued Seasons: Used to determine a player's free agency status. In order to accrue a season, a player must have been on (or should have been on*) full-play status for at least six regular-season games in a given season. *The player needs to be on the team's active/inactive list, injured reserve or reserve PUP for at least six regular-season games in a given season.
Credited Seasons: Used as a measure for many benefits, it's most notably utilized to determine a player's minimum salary. To earn a credited season, a player must be on (or should have been on) full-pay status for a total of three or more regular season games.
Guaranteed Money: The amount of guaranteed money a player can possibly earn over the course of a contract. This isn’t fully guaranteed money.
Fully Guaranteed Money: The amount of money in a contract that the team is responsible paying the player no matter what. This money is guaranteed at signing.
Roster Bonus: Compensation earned by remaining on a team's roster on a certain date.
Per-game Roster Bonus: A roster bonus awarded on a per-game basis for being on the team's game day roster or its active 53-man roster. Varies by contract.
Prorated Bonus: Typically, a signing bonus or Option bonus. This amount of money gets prorated evenly over the current and remaining years of a contract equally. When this bonus becomes active, it is paid upfront.
Incentives: Incentives fall into two categories: "likely to be earned" (LTBE) or "not likely to be earned" (NLTBE) based on the player or team's prior-year performance. Typically, LTBE incentives count against the team's salary cap in the current season, and NLTBE incentives do not count against a team's current year's cap. In rare cases, unearned LTBE incentives are credited to the following season's salary cap, while earned NLTBE incentives are charged against the following season's salary cap.
Dead Money: Refers to salary a team has already paid or has committed to paying (signing bonus, fully guaranteed base salaries, earned bonuses, etc.) but has not been charged against the salary cap. In business terms, it is essentially a "sunk cost."
Restructure: When a team converts part of a player's base salary into a signing bonus to create immediate cap relief. This does, however, increase the player's yearly cap hits thereafter by pushing more dead money into future years. Unless stated in the original contract, a team does not need a player’s permission to restructure.
Extension: When a team and player negotiate an extension, they add on extra years beyond the current year’s contract.
Salary Cap Basics
Current Salary Cap:Â $224.8 million per team
Cap space is Based On:Â The Top 51 players' contracts
At its core, the salary cap is just simple math. It's a number set by the NFL, and an NFL team's Top 51 most expensive cap hits count against it. As well as the salary cap set by the NFL each year, a team's salary cap includes their rollover from the previous year.
So in simple terms: Total NFL Salary Cap - Top 51 Contracts = Team Cap Space
Rollover is a whole other thing, and it's a lot of details and stuff, but basically any unused cap from 2022 is rolled over into 2023.
The salary cap is based on the prior year's revenue generated by the NFL across the board. The NFL generates revenue in a lot of ways: media deals, individual stadium revenue, advertisement sales, etc. Salary caps are based on a percentage of that revenue.
The NFL has already set the cap at $224.8 million. Which is up roughly $16.6 million from 2022.
Most people are unaware of the Top-51, but it's easy to understand. We know teams can sign up to 90 players on the roster before making cuts to the final 53-man number. Whether you're at 90 or 53, only the most expensive 51 cap hits count towards cap space. When a player signs with another team at any cap hit higher than that team's current 51st-most expensive contract, it bumps that number down and possibly out of the Top 51.
Still not clear? Let me use an example to help illustrate the point. The Titans currently have 57 players under contract. So, right now only 51 of those count against the cap. Let's look at a hypothetical example and I will be using round numbers to show what this means:
Titans' Imaginary Cap Space:Â $50 million
Titans sign Jakobi Meyers
Jakobi Meyer’s 2023 Cap Hit: $5 million
Titans Fake Cap Space after Meyers: $45 million
Number 51 contract:Â Zach McCloud
Kevin Hogans's Cap Hit:Â $1 million
Net Top 51 Imaginary Titans Cap Space: $46 million
So, while Jakobi Meyers does carry a cap hit of $5 million for 2023, it’s not a full $5 million loss, because another contract falls off.
So, when a player is signed use this equation:Â
New Player Cap Hit - 51st ranked Current Player Cap Hit = Actual Cap Hit
As stated above, teams have until March 15th at 4 p.m. EST to get their salary cap space under the salary cap.
Franchise/Transition Tags
Dates to use tag:Â February 21st - March 7th
Types of Tags:Â Exclusive Franchise Tag, Non-exclusive Franchise Tag, Transition Tag
Who is eligible:Â Any pending unrestricted free agent can be tagged by his own team.
Can you be tagged two years in a row?:Â Yes
How many players can be tagged by a team every year?: One player for the franchise tag and one player for the transition tag
Now that we have some basics of the tags out of the way, we can discuss how the tags work.
Franchise tags are typically used to on players that a team is having trouble finalizing a deal with. Tagging a player lets the team, quite literally, buy more time to negotiate, or if negotiations fall through, lets the team get draft compensation if he signs with another team.
I don't want to get too int he weeds about how tags are calculated because I can just let OverTheCap.com do that for me. The franchise tags are essentially always going to be very pricey, one-year deals, but the different types of tags matter to the team.
Non-exclusive Franchise Tag:Â This is the most common one that teams use. This allows the player and his agent to shop around for a better deal. If the player finds a better deal than the tagged number, they bring that offer back to the original team. The original team gets first right of refusal. If the team chooses to not match it, the new team must give up two first-round draft picks.
Important to note: If the original team lets the player sign with the other team before the draft, or before the new team’s first-round pick has been used, then the original team’s future draft picks come from this year’s draft. If it’s after those dates, then it will be the following year drafts.
Exclusive Franchise Tags:Â This means exactly what it sounds. The team holds an exclusive contract on the player, and the player is stuck with that team unless he is traded. This is also more expensive than the non-exclusive tag, because it is based on the top-5 contracts of the current year, so players that sign new contracts (Derek Carr) can affect this number.
Transition Tag: The Transition Tag is a cheaper version of the non-exclusive franchise tag. The player is allowed to try and find a deal that’s better, and the original team has a chance to match that deal. However, unlike the non-exclusive franchise tag, if the original team chooses not to match the new deal, the original team gets no draft pick compensation.
Other Rules to Know
A team can rescind a tag at any time as long as the player hasn't signed it.
Both the team and the player have a deadline of July 14th (I think) to work out a multi-year deal that would replace the franchise tag.Â
Example: Harold Landry last year.If a player is tagged two years in a row, this will always result in a 20% raise of the previous tag.
Players don't have to sign their tags. That's right; a player can opt to just sit out and not get paid. They have 10 weeks into the regular season to sign it, or they can't ever join the team that season. They can still get tagged the following year.
Resources For You
Preferred Salary Cap/Contract web site:Â Spotrac.com
Franchise/Transition Tag Amounts (Projected)
Twitter Accounts: @spotrac, @Jason_OTC, @corryjoel
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