A restricted free agent is a professional athlete who plays in the KHL, NFL, NHL, or NBA. Such players have special restrictions on the terms under which they can retain or change employment status with their athletic club teams.
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In the National Football League, a restricted free agent (RFA) is one with three accrued seasons of service, who has received a "qualifying" offer (a salary level predetermined by the Collective Bargaining Agreement between the league and its players) from his current club. He can negotiate with any club through a certain date. If the restricted free agent accepts an offer sheet from a new club, his old club has "right of first refusal," a seven-day period in which it may match the offer and retain him, or choose not to match the offer, in which case it may receive one or more draft picks for the upcoming draft from the player's new club. If an offer sheet is not executed, the player's rights revert to his old club the day after negotiations must end.
In 2007, a second-round tender offer was added. The four tender amounts for 2008 are as follows:[1]
| Tender amount | Compensation required |
|---|---|
| $2.562 million | First- and third-round |
| $2.017 million | First-round |
| $1.417 million | Second-round |
| $927,000 | Determined by RFA's original draft status (see below) |
Each player that signs a tender receives the one-year salary that corresponds to the tender level. Teams which choose not to match an offer on a player with a low tender receive a draft pick corresponding to the round in which the player was originally drafted (except that the highest pick that can be surrendered for such a tender is a second-round pick). For example, a player who was originally drafted in the sixth round of the NFL Draft would force the team signing him to give his former team a sixth-round pick in the upcoming draft as compensation for his service. No compensation is required for an undrafted player on the lowest tender amount, so teams with valued undrafted RFAs are taking a notable risk by offering such tenders.
In addition to the following outcomes, if a player does not receive an offer sheet from his original team, he becomes an unrestricted free agent. If a player signs the offer sheet from his original team, he remains with that team.
A player who is no longer considered to be entry-level, but does not qualify as an unrestricted free agent, becomes a restricted free agent when their contract expires. A player may only declare themselves to be an unrestricted free agent if they are over the age of 27 or have played in the league for a minimum of 7 years.
The current team must extend a "qualifying offer" to a restricted free agent to retain negotiating rights to that player.
Players who earned less than $660,000 in the previous season must be offered 110 percent of last season's salary. Players making up to $1 million must be offered 105 percent. Players making over $1 million must be offered 100 percent.
If a player accepts a qualifying offer he remains with his current team for a one- or two-year term. The length of the contract is determined by the player. At the end of this contract the player becomes an Unrestricted Free Agent. While the player is in negotiation with his current team, other teams are allowed to extend Offer Sheets to him. Should the player sign a proposed Offer Sheet, his current team is notified as such, can no longer negotiate a new contract or trade the rights to negotiate and is left with 2 options, Accept or Decline. The current team has 7 days to make its decision.
For example:
At any point during the negotiation process, if the player has been in the NHL for longer than 4 years (less if the player signed his first contract after the age of 20), either the player or his current team may file for Salary Arbitration as a means of settling a contract dispute. At this point the player may no longer sign an Offer Sheet. The deadline to file for Salary Abitration is July 5th with cases being heard between late July and early August.
A team can take a player to arbitration once in his career. Players may request salary arbitration as often as they please.
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. 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. Accepting a qualifying offer makes the player play for one season with the team that made the qualifying offer, in which case the player becomes a free agent again at the end of that season.
The amount of the qualifying offers are, for players on rookie "scale" contracts, based on the player's draft position. For all other players, it is the greater of the following:
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.
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.
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.
Kontinental Hockey League players under 28 years of age as of July 1 of a given calendar year whose contracts are expired are considered restricted free agents. Just like the NHL and the NBA, the original team of a player who signed an offer sheet tendered by another team has seven days to match the offer sheet. However, unlike its North American counterpart, teams that decide not to match offer sheets collect transfer fees instead.