How Does Free Agency Work?

Free agency rights depend on the number of "accrued seasons" the player has at the time his contract expires. An accrued season is a season in which the player has been on "full pay status" for six (6) or more regular season games. There are three categories of free agents:

  1. Unrestricted: In a capped year, a player with four or more accrued seasons has unrestricted free agency rights. Five or more accrued seasons are required for unrestricted free agency in an uncapped year (1993 or the last year of the CBA). An unrestricted free agent may sign with any team. If the unrestricted free agent is not signed by June 1, his old club may offer him a contract with a 10% raise over his prior year's salary, and thereby obtain the exclusive right to re-sign him after July 15 if he has not signed elsewhere by then.

  2. Restricted: A player with three but less than four accrued seasons (four but less than five in an uncapped year) can seek offers from other clubs after his contract expires, but he has only 60 days to do so (from around March 1 to mid-April). If he gets an offer, his old club must choose between matching it and retaining him, or letting him go to the new club in return for draft choice compensation. The draft choice compensation varies depending upon the offer the old club gives the player prior to becoming a restricted free agent.

  3. Exclusive Rights: A player with an expiring contract who has less than three accrued seasons can only sign with his old club, provided that he is offered a one-year contract at the minimum salary for the upcoming year. If the exclusive rights free agent gets no such offer, he is completely free.

A player who is in the unrestricted category will have his free agency rights restricted if he is designated as either a Transition Player or a Franchise Player. Each club was allowed a total of three transition player designations in the first two years of the Collective Bargaining Agreement. No additional designations will apply until the last year of the CBA, when each club is allowed one more transition designation.

A player subject to the transition designation must be offered the average of the top ten salaries (league-wide) at his position, and he is subject only to a right of first refusal by his old club. The franchise player category can be used throughout the term of the Collective Bargaining Agreement, but clubs can only have one franchise player at a given point in time. This designation requires an offer equal to the average of the top five salaries league-wide in the player's position. If the club does not want to make this tender, it can make a transition player tender, and retain only a right of first refusal. Once the named franchise player signs, the club loses the designation and cannot use it on another player until the franchise player's contract expires or he receives a career-ending injury.

The 1998 Extension Agreement provides for a salary guarantee for any franchise player who accepts the one-year tender. This is a significant improvement for the player, since he is assured of receiving the entire tender amount for the next season even if the club decides not to keep him and that also provides an incentive for the club to sign him to a longer-term contract with a big signing bonus.

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