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From Yahoo!/Scout.com:


Free-Agent Terms


Staff - Scout.com

February 4, 2005 at 1:07pm ET

Defining the terms that are sure to be thrown around often during the upcoming free-agent period.




Q: What are the categories of free agency?

A: Players are either "restricted," "unrestricted" or "exclusive rights" free agents. Within the categories are also "transition" and "franchise" players.



Q: What is the time period for free agency signings this year?

A: Please see Offseason Schedule page.


Q: What is the difference between a restricted free agent and an unrestricted free agent?

A: Players become restricted free agents when they complete three accrued seasons and their contract expires. Unrestricted free agents have completed four or more accrued seasons with an expired contract.


Q: What constitutes an "accrued season?"

A: Six or more regular-season games on a club’s active/inactive, reserved-injured or "physically unable to perform" lists.


Q: Other than accrued seasons, what determines a restricted free agent?

A: He has received a "qualifying" offer (a salary level predetermined by the Collective Bargaining Agreement between the league and its players) from his old club. He can negotiate with any club through April 15. Then, because of the qualifying offer, his rights revert exclusively to his old club on April 15. Prior to April 16, if the restricted free agent accepts an offer sheet from a new club, his old club can match the offer and retain him because it has the "right of first refusal." If the old club does not match the offer, it can possibly receive draft-choice compensation depending on the amount of its qualifying offer.


Q: What determines an unrestricted free agent?

A: A player with four or more accrued seasons whose contract has expired. He is free to sign with any club, with no compensation owed to his old club, through June 15. On June 16, his rights revert to his old club if it made a "tender" offer (110 percent of last year’s salary) to him by June 1. His old club then has until the 10th week of the season (November 10) to sign him. If he does not sign by the 10th week, he must sit out the season. If no tender is offered by June 1, the player can be signed by any club at any time throughout the season.


Q: What determines a transition player?

A: His club must offer a minimum of the average of the top 10 salaries of last season at the player’s position or 120 percent of the player’s previous year’s salary, whichever is greater. A transition player designation gives the club a first-refusal right to match within seven days an offer sheet given to the player by another club after his contract expires. If the club matches, it retains the player. If it does not match, it receives no compensation.


Q: What determines a franchise player?

A: A club can designate one franchise player in any given year. The salary level offer by a player’s old club determines what type of franchise player he is. An "exclusive" franchise player -- not free to sign with another club -- is offered a minimum of the average of the top five salaries at the player’s position, or 120 percent of the player’s previous year’s salary, whichever is greater. If the player is not offered a minimum of the average of the top five salaries of last season at his position, he becomes a "non-exclusive" franchise player and can negotiate with other clubs. His old club can match a new club’s offer, or receive two first-round draft choices if it decides not to match.


Q: Can a club decide to withdraw its franchise or transition designations on a player? If so, can it then use them on other players?

A: A club can withdraw its franchise or transition designations and the player then automatically becomes an unrestricted free agent either immediately or when his contract expires. The club cannot name a new transition player (two allowed in 1993, one in 1994 and one in the final year of the CBA). It can name a new franchise player the next year. A club can, though, designate a transition player in lieu of a franchise player at any time. Only one franchise and transition player can be on a club’s roster.


Q: What determines each team’s salary cap? Is it always in effect?

A: The salary cap is the absolute maximum each club may spend on player salaries in a capped year. For 2005, that amounts to 65.5 percent of league-wide "Defined Gross Revenues" (divided by 32 teams from 2004) made up of preseason, regular-season and postseason gate receipts and radio and television rights. The cap is in effect 365 days a year. From February 24 to the day before the season begins, a club’s top 51 salaried players count towards the cap, plus pro-rated signing bonuses, incentives, etc., but not base salaries of other players on the roster up to 80. Thereafter, not all salaries on a club’s roster count toward the cap. The maximum salary cap for 2005 is expected to be near $85 million per club.


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