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CBA BlackBook 2: Tenders & draft compensation

I am trying to provide CBA topics that relate to current team rosters and things like how Troy’s Franchise Tender will be handled if it becomes necessary. This is a lot of information, so please keep that in mind when your vision gets blurry:) But, you don’t have to read all this info now you can come back and find the answer when you need it, hence the name CBA BlackBook. With rosters down to 53 and Practice Squads being signed sometimes people ask "do we get a draft pick in return for Crezdon Butler who just signed with Pittsburgh West?" The answer is no but I think it is better to start at the top with Unrestricted Free Agents and Franchise Players and work our way down. Let's start with a few basic definitions:

Accrued Season ("AS") – A player is deemed to have earned an "AS" if he was on, or should have been on, full pay status for six or more regular season games (see CBA BlackBook 1 post for more detail)

Draft Choice Compensation ("DCC") - The right of any Club to receive draft pick(s) from any other Club.

Exclusive Franchise Tender ("EFT") -  A one year contract offer of either (1) the average of the five largest Salaries for his position as of the end of the "RFA" Signing Period for that League Year or (2) the corresponding  "NFT" whichever is greater. [note: "RFA" Signing period is at least 35 days and ends no later than 5 days prior to the Draft]. 

Exclusive Rights Player ("ERP") - A player with less than three Accrued Seasons whose contract has expired but received the Required Tender ("RT").

Franchise Player ("FP") – Each club is eligible to designate one of its players who would otherwise be an "UFA" or with certain conditions a "RFA". The window to designate a "FP" is begins on the 22nd day and ends on the 8th day preceding the Start of the new League Year.

 

 

Qualifying Offer ("QO") - The Required Tender ("RT") for a Restricted Free Agent ("RFA").

Right of First Refusal ("RFR") – The right of a Club to retain the services of certain Veteran(s) by matching offers made by other Clubs.

Required Tender ("RT") -  This is an offer or Tender a Club is required to make a player either as a matter of right with respect to the player or to receive Rights of First Refusal ("RFR"), Draft Choice Compensation ("DCC") and/or other rights with respect to the player.

Restricted Free Agent ("RFA") - A Veteran who has three but less than four Accrued Seasons and who completes performance of his Player Contract, but who is still subject to Rights of First Refusal ("RFR") and Draft Choice Compensation ("DCC") in favor of his Prior Club.

Unrestricted Free Agent ("UFA") – A Veteran with four or more "AS" who has completed performance of his Player Contract and is no longer subject to exclusive negotiating rights, "RFR", "DCC" or other limitation to his Prior Club.

Veteran – Any player who has signed one or more NFL Player Contract(s) [Note: Practice Squad contracts do not count]

Ok, now we have established a few definitions let’s dig into the details. Everyone has heard about franchise tags so let’s start with a Franchise Player Designation. It looks like Troy Polamalu’s Contract will not be renegotiated until after the 2011 regular season. Plus, if we go to the Super Bowl February 6th there will be too many distractions to redo Troy’s contract.  League Year usually starts March 1st so if there is no new contract by the SB, look for Troy to be franchised between February 7th and 21st (see "FP" above).  So what does that mean? Well, once we have "tagged" Troy as franchise we will choose to make one of two offers or Required Tenders ("RTs").  The front office can either designate him a Nonexclusive Franchise Tender ("NEFT") or an Exclusive Franchise Tender ("EFT").  Now obviously we don’t want Troy talking to other teams so we will designate him an "EFT".

With such "EFT" designation we will have made a one year contract tender of either (1) the average of the five largest Salaries for his position as of the end of the "RFA" Signing Period for that League Year or (2) the corresponding "NEFT"whichever is greater. The "NEFT" will be addressed later. Now that the Tender amount has been established, it is immediately added to the Team Salary Cap. Should said player not wish to sign a long-term deal and wishes to test "FA" in a year he can accept the "EFT." Supposing the player officially accepts the one year Tender it is understood to guarantee the total Salary for comparative skill, injury and salary cap room, a.k.a. "full guarantee." 

Now, we know Troy doesn’t want to be a "FA" so here is how it should play out. A Club designating a "FP" will have until July 15th (or next business day) to sign said player to a multi-year contract or extension. After that date, player may only sign a one year contract with his Prior Club and such contract may not be extended until after Club’s last regular season game of that League Year. So if Troy is designated "EFT" and has not re-signed by July 15th 2012 he could only sign for at least the one year Tender and not extend until the end of 2012 regular season.

 Draft Choice Compensation ("DCC") as this has implications on future College Drafts. Let’s start with "UFAs," there is no compensation of any kind including "DCC" to the Prior Club from the New Club, an "UFA" is completely free to negotiate with any team knowing there are no strings attached. However, "RFAs" are a different story, they are completely free to negotiate and sign with Clubs albeit with restrictions. First, in order for the Prior Club to receive specified "RFR" and/or "DCC" with respect to a "RFA" his Prior Club must tender a "QO" on or before the first date of the "RFA" Signing Period (noted above). These are the guidelines for "QOs":

  • "RFR" Only – Prior club need only offer a one year Player Contract with salary of at least $1.2mm.
  • "RFR" & "DCC" at Player’s Original Draft – One year contract with salary of (a) at least $1.2mm, or (b) 110% of Player’s prior year salary, whichever is greater. If (b) applies then all other terms of Player’s prior year contract are carried forward unchanged.
  • "RFR" & One Second Round "DCC" – One year Player Contract with Salary of (a) at least $1.835mm, or (b) 110% of Player’s prior year salary, whichever is greater. If (b) applies then all other terms of Player’s prior year contract are carried forward unchanged.
  • "RFR" & One First Round "DCC" – One year Player Contract with Salary of (a) at least $2.611mm, or (b) 110% of Player’s prior year salary, whichever is greater. If (b) applies then all other terms of Player’s prior year contract are carried forward unchanged.
  • Notwithstanding the above Tenders there is an Upgraded Tender ("UT") rule that works like this, if a Prior Club makes a "QO" to get "RFR" & 1st Round "DCC" but said Player was originally selected in lower than the 1st round, Prior Club shall only be eligible for one 2nd Round selection for any of its "RFAs" originally selected in the 1st round unless all said "RFAs" have each received a "QO" for no less than the "UT."
  • Same rule applies to a "RFR" & 2nd Round "DCC", except Prior Club will only get a 3rd round "DCC" for an original 2nd round pick unless all 2nd round picks receive a "QO" for no less than the "UT." 
    By adding at least $500k to the "RFR" & 1st Round "DCC" "QO" of $2.611mm that automatically limits your player from getting future limitations on "FA" thru franchise or transition designations via a new Club's Offer Sheet. This could become very important for a highly valued player after the one year Tender is completed.

Now, should Prior Club happen to withdraw "QO" for any reason, the "RFA" immediately becomes a "UFA" and is completely free to negotiate with any Club without being subject to "RFR", "DCC", Signing Period or any other limitation of any kind. There is no need for "DCC" with a Franchise Player because no other team can sign him away from you. There are so many variables I believe it is important to not just provide details but attempt to tie them together to let you see the big picture.

This is a good end point to this post, I will tackle "NEFT" math and other related topics in CBA BlackBook 3. Hope this information is useful and you are not more confused than before. If so, sorry about that, it was not my intention(:

 

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