The Process For Restricted Free Agents

With the start of free agency and the new league year, March 9th, approaching we are going to look at the process for a restricted free agent.  We will explain how the type of free agent is determined, the timeline of tender requirements, and what options the team has over the player.  There are two types of free agents that fall under this category:  Restricted & Exclusive Rights Free Agents.  At any point up until March 9th the team and the player can agree to a new contract  which would eliminate the restricted free agent process.  For this article we will assume the team will submit a tender offer on their restricted free agents.

Which Free Agent Type?

The type of free agency is determined for a player based on the number of accrued seasons the player has.  To gain an accrued season the player must have been on the active roster or injured reserve for a minimum of 6 weeks.  Players on NFI reserve, practice squad, or commissioner’s exempt list do not gain accrued seasons.  If the player has two accrued seasons or less, then the player will be set as an Exclusive Rights free agent after the completion of their contract.  If the player has three accrued seasons then the player will be set as a Restricted free agent.  Players with 4 or more accrued seasons become Unrestricted free agents after the completion of their player contract.

Exclusive Rights Free Agent

An exclusive rights free agent does not have any options if a team submits a tender to the player.  The team will submit a minimum salary tender to the player, and this must be completed by March 9th.  The player has two options on the tender offer:  1.  Sign the tender  2.  Not sign the tender.  If the player elects to not sign the tender, then the player is not eligible to sign with another player for the league year.  The player has until April 22nd to sign the tender.  The tender (contract) will likely be a 1 year deal at the minimum salary level with no guaranteed money.  The Texans have two free agents that fall into this category:  OL Jeff Adams & DB Charles James.   The Texans will likely submit tender offers to both players.  If the team does not submit a tender by March 9th, then the player will become an unrestricted free agent immediately.

Restricted Free Agent

The process for a restricted free agent is a bit more involved versus the Exclusive Rights free agent.  The team will need to submit a qualifying offer tender by March 9th.  There are three types of tender offers the team can submit:

  • 1st Round Tender  ($3,635,000)
  • 2nd Round Tender  ($2,553,000)
  • Original Round Tender ($1,671,000)
  • First Right of Refusal ($1,671,000)

Each tender amount has an associated contract value (amount in parenthesis).  We will assume the player signs the tender to continue the process.  From the time the tender is submitted by the original team the player can seek out contract offers from other teams.  The draft round in the offer equals the compensation the team would receive if the player signs a contract with another team.  The original team would then have the option to match the contract offered by another team.  If the original team declines to match the contract then the original team would receive draft compensation matching the tender.  If the player does not receive a contract offer he will then need to sign the tender from the original team.  The salary cap charge would match the tender amount listed above.  Once the player signs the tender, it does not become fully guaranteed.  The deadline for a player to sign their proposed tender is April 22nd, 2016.

Example:  The Texans submit a 2nd Round Tender to LB John Simon.  Simon is then offered a 3 year offer sheet (contract) worth $15 million by the Atlanta Falcons.  Simon would sign the offer sheet submitted by the Falcons.  The Texans would have 5 days to either match the contract (principle terms) to retain Simon or allow Simon to take the contract with the Falcons.  If the Texans were to let Simon go they would receive the Falcon’s 2nd round draft selection in the upcoming draft.  If the Texans were the match the contract, this is known as right of refusal, and then Simon would only have the option to sign with the Texans; and the Texans would not receive any draft compensation from the Falcons.

The Texans have 6 restricted free agents this offseason:  DB A.J. Bouye, RB Jonathan Grimes, DB Darryl Morris, DB Eddie Pleasant, LB John Simon, LB Justin Tuggle.

 

Troy

 

 

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