larry coon salary cap faq
37. What is restricted free agency?
There are two types of free agency: unrestricted and restricted. An unrestricted free agent is free to sign with any other team, and there's nothing the player's original team can do to prevent it. Restricted free agency gives the player's original team the right to keep the player by matching an offer sheet the player signs with another team. This is called the "right of first refusal."
Restricted free agency exists only on a limited basis. It is allowed following the fourth year of rookie "scale" contracts for first round draft picks (see question number 42). It is also allowed for all veteran free agents who have been in the league three or fewer seasons. However, a first round draft pick becomes an unrestricted free agent following his second or third season if his team does not exercise its option to extend the player's rookie scale contract for the next season. All other free agency is limited to unrestricted free agency.
In order to make their free agent a restricted free agent, a team must submit a qualifying offer to the player by June 30. This prevents the team from not offering a contract and waiting to swoop in when the player tries to sign elsewhere. The qualifying offer ensures that the team does not gain the right of first refusal without also offering a contract themselves. The amount of the qualifying offer for players on rookie "scale" contracts is based on the player's draft position (see question number 42). The qualifying offer for all other players must be for 125% of the player's previous salary, or the player's minimum salary (see question number 11) plus $175,000, whichever is greater. The qualifying offer must be for one season. A player can elect to accept his qualifying offer (the qualifying offer must be accepted by March 1) and play the following season under its terms. This is sometimes done in order to become an unrestricted free agent the following summer (see question number 39).
A qualifying offer cannot be accepted after March 1. Teams may place a shorter time limit on their qualifying offer, specifying any date between October 1 and March 1 by which it must be accepted. If the deadline passes and the qualifying offer is neither withdrawn nor accepted, then the player continues to be a restricted free agent. The team and player are also still free to negotiate a new contract after the qualifying offer ends -- the deadline only affects the player's ability to accept the qualifying offer.
Teams may also withdraw an outstanding qualifying offer in which case the player becomes unrestricted. This happened with Toronto and Keon Clark in 2002. The qualifying offer cannot be withdrawn after July 23 without the player's approval.
If the player is coming off the fourth year of his rookie scale contract, then in addition to a qualifying offer, his team can also submit a maximum qualifying offer. A maximum qualifying offer is for six seasons at the maximum salary with 10.5% annual raises. It can contain no options, ETOs or bonuses of any kind, and must be fully guaranteed. When a team submits a maximum qualifying offer (in essence "stepping up" with a maximum contract offer before the player even hits the market), it places a more stringent requirement on other teams' offer sheets (see below).
When another team wants to sign a restricted free agent, it signs the player to an offer sheet, the principal terms of which the original team is given seven days to match. The offer sheet must be for at least two seasons (not including option years). If the player's prior team also submitted a maximum qualifying offer, then the offer sheet must be for at least three seasons (not including option years). If the player's original team exercises its right of first refusal by matching the principal terms of the offer sheet, the player is then under contract to his original team. If the player's original team does not exercise its right of first refusal within seven days, the offer sheet becomes an official contract with the new team.
To summarize, a restricted free agent essentially has four options:
He can accept his prior team's qualifying offer, play for one season, and become a free agent again the following summer.
He can accept his prior team's maximum qualifying offer (if applicable, and if one has been submitted) and play under a long-term contract at the maximum salary.
He can sign an offer sheet with another team, which his prior team is given the opportunity to match.
He can negotiate a new contract with his prior team that is independent of the qualifying offer or maximum qualifying offer.
There are additional restrictions placed on offer sheets for players with one or two years in the league. These restrictions are described in question number 38.
There can be no compensation given to a team in return for their not matching an offer to a restricted free agent. For example, Houston could not sign Golden State's restricted free agent, then send Golden State a draft pick in exchange for their not matching the offer and retaining the player.
If the team matches an offer sheet, they cannot trade the player in a sign-and-trade arrangement (see question number 79).
A signed offer sheet can be rescinded within the seven day waiting period if all three parties (the player and the two teams) agree.
