casmith07
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This should hopefully answer most of the questions about the uncapped year and hopefully educate those that don't fully understand what it means. If you have any more questions, feel free to ask me and I'll try to answer to the best of my ability, though if anyone else has any insights feel free to chime in.
I also posted the NFL's Q&A on it a couple of weeks ago, but as you can imagine it garnered very little interest.
Why an Uncapped Year?
In 2006, the NFL and the NFLPA agreed to a new Collective Bargaining Agreement (CBA) through the 2012 NFL season. Worked into that agreement was the ability for the NFL owners to opt out of the deal as of the end of 2010 NFL season; they did so in 2008 because of problems with revenue sharing and rookie salaries, among other things. In either case, the final season of the CBA becomes an “uncapped year.” This does not mean that no salary or contract restrictions are in place. All of the regulations provided in the CBA are still in effect for the uncapped year unless otherwise specified. Following the 2010 league year, the CBA will expire completely. Without another CBA, there will be a lockout for the 2011 NFL season.
The NFL and NFLPA have begun to negotiate a new CBA, but it is unlikely that one will be reached in time for the start of free agency on March 5, when some of the different uncapped year restrictions come into place. Further, it has been reported that the two sides could still reach a deal before March 5, but as a bargaining chip, the NFLPA may be willing to keep the free agent rules of an uncapped year in place for 2010 under the new CBA to prevent chaos at the beginning of the free agent signing period.
While there is no salary cap in an uncapped year, there is also no salary floor, which means small-market teams do not have to spend to a certain level, potentially affecting competitive balance.
What are the free agent restrictions?
The most important free agent restriction in an uncapped year is the amount of accrued seasons a player needs to earn unrestricted free agency. In a normal season, a player would need three to become a restricted free agent and four to become an unrestricted free agent. In an uncapped year, players still need three to become a restricted free agent, but they now need six to become an unrestricted free agent. (An accrued season is equal to six or more weeks on a 53-man roster, injured reserve, or PUP; …NFI and other lists do not count)
Beginning March 5, all unrestricted free agents will be free to sign with any team, besides the “final eight” teams with more restrictions, which are discussed below.
Beginning in mid-February and ending March 4, teams may begin to tender restricted free agents “qualifying offers,” which come at five different compensation levels of a one-year, base salary-only contract, the final four of which all carry a right of first refusal: only right of first refusal, original draft pick compensation, second round draft pick compensation, first round draft pick compensation, and first and third round draft pick compensation. However, if any of these tenders is less than 110% of the player’s prior year base salary, the team must tender that player at 110% of their prior year base salary, plus whatever terms of prior year’s contract were in place. A team may choose not to tender a restricted free agent at any time, or may withdraw a tender before it is signed, in which case the player becomes an unrestricted free agent. Unlike a franchise tender, a restricted free agent tender is not guaranteed salary.
Right of First Refusal Only: $1,100,000 (4th/5th year: $1,176,000)
Original Draft Pick Compensation: $1,100,000 (4th/5th year: $1,176,000)
Second Round Draft Pick Compensation: $1,684,000 (4th/5th year: $1,759,000)
First Round Draft Pick Compensation: $2,396,000 (4th/5th year: $2,521,000)
First and Third Round Draft Pick Compensation: $3,043,000 (4th/5th year: $3,168,000)
Once the restricted free agent has been tendered a qualifying offer, he is free to solicit free agent offers from all teams, including the “final eight” without restriction, beginning on March 5. Those teams can then submit an “offer sheet” to the prior team outlining the terms of the contract they are offering the player. The prior team then has seven days to choose whether or not to match that offer sheet (exercise their right of first refusal), in which case they would re-sign their player, or to allow the new team to sign that player to an offer sheet. Keep in mind that “poison pills” can come into play here; the new team can make an offer sheet that says the contract is voided if the player is on the roster of the old team at any time, or something like that, in which case the team couldn’t realistically match the offer. However, poison pill or not, if the team doesn’t choose to match the new team’s offer sheet, they receive the designated draft pick compensation in return. It is always for the current year’s draft. Other teams have until eight days before the draft to extend an offer sheet, and teams thus have until the day before the draft to match those last-minute offer sheets.
If the player doesn’t sign his qualifying tender by June 1, the team can either choose to continue to offer their tender, or withdraw it. If they continue to extend their tender, the player cannot sign with any other team past June 1.
In an uncapped year, teams have one franchise tag and one transition tag to use, or two transition tags to use.
What is this “Final Eight?” rule?
For the final four teams alive in the 2009-10 NFL playoffs, the following restrictions are in place for 2010 free agency:
-These teams may sign any player who was released by their former team
-These teams may re-sign any player who was under contract with that team at the end of the season
-These teams may ONLY sign one unrestricted free agent (from another team) for every one of their own unrestricted free agents who signs with another team. Further, that new player cannot have a first-year salary (excluding signing bonus proration) of any more than what the old player signed with his new team. Further, to prevent back-loading that new deal, the salary of the new player (including roster bonus, option bonus, LTBEs, and excluding signing bonus proration) cannot have an annual increase of more than 30%. Further, the newly signed player cannot renegotiate an increase until 12 months after he is signed. This is different from the normal rule, which allows a first renegotiation within 12 months, but not a second for another 12 months.
-These teams may not trade for any player who they would not otherwise be able to sign as an unrestricted free agent
For the four teams who lose in the divisional round of the 2009-10 NFL playoffs, ALL of the above restrictions are in place, except for the following:
-They may sign one unrestricted free agent with a first-year salary of at least $4,925,000 (that is a 2006 number, the 2010 number is adjusted by the % increase in total revenue, 2006-2010)
-They may sign as many unrestricted free agents with a first-year salary of $3,275,000 (again, not adjusted…does not include signing bonus proration) or lower, but also with an annual increase of less than 30% of that number. This is also not re-negotiable for a year.
Can’t a team just front-load a contract to take advantage of the uncapped year?
No, this would be difficult to do. That is because, according to the CBA, any salary decrease of greater than 50% from one year to the next becomes signing bonus and thus is spread out over the life of the deal. For example, if the Cowboys signed Miles Austin to a deal with a $20M salary in 2010 (uncapped) and a $4M salary in 2011 (capped), then that is a decrease of more than 50% ($10M), that $16M difference would become signing bonus and pro-rated over the life of the deal; if it was a four-year deal, then it would count as $4M/year, so the 2010 cap charge would reduce to $8M ($20M - $16M + $4M), and the 2011-2013 charges would increase by $4M.
Couldn’t a team have back-loaded a contract a few years ago to take advantage of the uncapped year?
No, there are two rules that have prevented this (and when uncapped years loomed years ago). The first is the “30% rule,” which says that any contract beginning in a capped year and extending into uncapped year(s) may not increase by more than 30% in salary (excluding signing bonus proration) annually in those uncapped years.
However, there are ways to get around that. Since that 30% increase does not include signing bonus or other prorated amounts, you can have a contract that is heavy in signing bonus, and then is back-loaded with higher base salaries in uncapped years. The Deion Rule applies to contracts that begins in a capped season and extends into an uncapped season. If the prorated amounts (from the heavy signing bonus) are greater than the non-prorated amounts (base salary) in the first three years of the deal (capped or uncapped), then that amount (or 50% of the combined pro-rations in the uncapped year(s), if that is less) is subtracted equally from the uncapped years and applied equally to the capped years. This prevents teams from back-loading contracts into uncapped years.
Can't the uncapped year be used to dump salary without penalty?
No. The CBA rules regarding bonus acceleration into the current year when a player is released do not apply in uncapped years. Normally, in a capped year, releasing a player before June 1 would mean whatever guaranteed money allocations from future years would accelerate into the current year’s cap, which in some cases would put the team over the salary cap (like having $9M of bonus allocations accelerate into 2009 from releasing Adalius Thomas during 2009). However, the 2006 CBA allowed teams to designate two pre-June 1 cuts as post-June 1 cuts. If a player is released after June 1, that acceleration is divided equally into the current year and the next year, as long as that next year wasn’t uncapped (which, again, means the Cowboys would have ~$9M accelerate into 2009 by releasing Thomas before or after June 1, 2009). Trades, no matter before or after June 1, would always trigger acceleration. In an uncapped year, there is no acceleration at all; neither into the current year nor into the current year and the next year. When a player is released or traded during an uncapped year, his bonus amortizations in future years remain intact.. For example, if Player X is released in 2010 (uncapped) and has $4M bonus amortizations in 2010, 2011, and 2012, those $4M cap hits would stay in each of those four years and not accelerate.
I also posted the NFL's Q&A on it a couple of weeks ago, but as you can imagine it garnered very little interest.
Why an Uncapped Year?
In 2006, the NFL and the NFLPA agreed to a new Collective Bargaining Agreement (CBA) through the 2012 NFL season. Worked into that agreement was the ability for the NFL owners to opt out of the deal as of the end of 2010 NFL season; they did so in 2008 because of problems with revenue sharing and rookie salaries, among other things. In either case, the final season of the CBA becomes an “uncapped year.” This does not mean that no salary or contract restrictions are in place. All of the regulations provided in the CBA are still in effect for the uncapped year unless otherwise specified. Following the 2010 league year, the CBA will expire completely. Without another CBA, there will be a lockout for the 2011 NFL season.
The NFL and NFLPA have begun to negotiate a new CBA, but it is unlikely that one will be reached in time for the start of free agency on March 5, when some of the different uncapped year restrictions come into place. Further, it has been reported that the two sides could still reach a deal before March 5, but as a bargaining chip, the NFLPA may be willing to keep the free agent rules of an uncapped year in place for 2010 under the new CBA to prevent chaos at the beginning of the free agent signing period.
While there is no salary cap in an uncapped year, there is also no salary floor, which means small-market teams do not have to spend to a certain level, potentially affecting competitive balance.
What are the free agent restrictions?
The most important free agent restriction in an uncapped year is the amount of accrued seasons a player needs to earn unrestricted free agency. In a normal season, a player would need three to become a restricted free agent and four to become an unrestricted free agent. In an uncapped year, players still need three to become a restricted free agent, but they now need six to become an unrestricted free agent. (An accrued season is equal to six or more weeks on a 53-man roster, injured reserve, or PUP; …NFI and other lists do not count)
Beginning March 5, all unrestricted free agents will be free to sign with any team, besides the “final eight” teams with more restrictions, which are discussed below.
Beginning in mid-February and ending March 4, teams may begin to tender restricted free agents “qualifying offers,” which come at five different compensation levels of a one-year, base salary-only contract, the final four of which all carry a right of first refusal: only right of first refusal, original draft pick compensation, second round draft pick compensation, first round draft pick compensation, and first and third round draft pick compensation. However, if any of these tenders is less than 110% of the player’s prior year base salary, the team must tender that player at 110% of their prior year base salary, plus whatever terms of prior year’s contract were in place. A team may choose not to tender a restricted free agent at any time, or may withdraw a tender before it is signed, in which case the player becomes an unrestricted free agent. Unlike a franchise tender, a restricted free agent tender is not guaranteed salary.
Right of First Refusal Only: $1,100,000 (4th/5th year: $1,176,000)
Original Draft Pick Compensation: $1,100,000 (4th/5th year: $1,176,000)
Second Round Draft Pick Compensation: $1,684,000 (4th/5th year: $1,759,000)
First Round Draft Pick Compensation: $2,396,000 (4th/5th year: $2,521,000)
First and Third Round Draft Pick Compensation: $3,043,000 (4th/5th year: $3,168,000)
Once the restricted free agent has been tendered a qualifying offer, he is free to solicit free agent offers from all teams, including the “final eight” without restriction, beginning on March 5. Those teams can then submit an “offer sheet” to the prior team outlining the terms of the contract they are offering the player. The prior team then has seven days to choose whether or not to match that offer sheet (exercise their right of first refusal), in which case they would re-sign their player, or to allow the new team to sign that player to an offer sheet. Keep in mind that “poison pills” can come into play here; the new team can make an offer sheet that says the contract is voided if the player is on the roster of the old team at any time, or something like that, in which case the team couldn’t realistically match the offer. However, poison pill or not, if the team doesn’t choose to match the new team’s offer sheet, they receive the designated draft pick compensation in return. It is always for the current year’s draft. Other teams have until eight days before the draft to extend an offer sheet, and teams thus have until the day before the draft to match those last-minute offer sheets.
If the player doesn’t sign his qualifying tender by June 1, the team can either choose to continue to offer their tender, or withdraw it. If they continue to extend their tender, the player cannot sign with any other team past June 1.
In an uncapped year, teams have one franchise tag and one transition tag to use, or two transition tags to use.
What is this “Final Eight?” rule?
For the final four teams alive in the 2009-10 NFL playoffs, the following restrictions are in place for 2010 free agency:
-These teams may sign any player who was released by their former team
-These teams may re-sign any player who was under contract with that team at the end of the season
-These teams may ONLY sign one unrestricted free agent (from another team) for every one of their own unrestricted free agents who signs with another team. Further, that new player cannot have a first-year salary (excluding signing bonus proration) of any more than what the old player signed with his new team. Further, to prevent back-loading that new deal, the salary of the new player (including roster bonus, option bonus, LTBEs, and excluding signing bonus proration) cannot have an annual increase of more than 30%. Further, the newly signed player cannot renegotiate an increase until 12 months after he is signed. This is different from the normal rule, which allows a first renegotiation within 12 months, but not a second for another 12 months.
-These teams may not trade for any player who they would not otherwise be able to sign as an unrestricted free agent
For the four teams who lose in the divisional round of the 2009-10 NFL playoffs, ALL of the above restrictions are in place, except for the following:
-They may sign one unrestricted free agent with a first-year salary of at least $4,925,000 (that is a 2006 number, the 2010 number is adjusted by the % increase in total revenue, 2006-2010)
-They may sign as many unrestricted free agents with a first-year salary of $3,275,000 (again, not adjusted…does not include signing bonus proration) or lower, but also with an annual increase of less than 30% of that number. This is also not re-negotiable for a year.
Can’t a team just front-load a contract to take advantage of the uncapped year?
No, this would be difficult to do. That is because, according to the CBA, any salary decrease of greater than 50% from one year to the next becomes signing bonus and thus is spread out over the life of the deal. For example, if the Cowboys signed Miles Austin to a deal with a $20M salary in 2010 (uncapped) and a $4M salary in 2011 (capped), then that is a decrease of more than 50% ($10M), that $16M difference would become signing bonus and pro-rated over the life of the deal; if it was a four-year deal, then it would count as $4M/year, so the 2010 cap charge would reduce to $8M ($20M - $16M + $4M), and the 2011-2013 charges would increase by $4M.
Couldn’t a team have back-loaded a contract a few years ago to take advantage of the uncapped year?
No, there are two rules that have prevented this (and when uncapped years loomed years ago). The first is the “30% rule,” which says that any contract beginning in a capped year and extending into uncapped year(s) may not increase by more than 30% in salary (excluding signing bonus proration) annually in those uncapped years.
However, there are ways to get around that. Since that 30% increase does not include signing bonus or other prorated amounts, you can have a contract that is heavy in signing bonus, and then is back-loaded with higher base salaries in uncapped years. The Deion Rule applies to contracts that begins in a capped season and extends into an uncapped season. If the prorated amounts (from the heavy signing bonus) are greater than the non-prorated amounts (base salary) in the first three years of the deal (capped or uncapped), then that amount (or 50% of the combined pro-rations in the uncapped year(s), if that is less) is subtracted equally from the uncapped years and applied equally to the capped years. This prevents teams from back-loading contracts into uncapped years.
Can't the uncapped year be used to dump salary without penalty?
No. The CBA rules regarding bonus acceleration into the current year when a player is released do not apply in uncapped years. Normally, in a capped year, releasing a player before June 1 would mean whatever guaranteed money allocations from future years would accelerate into the current year’s cap, which in some cases would put the team over the salary cap (like having $9M of bonus allocations accelerate into 2009 from releasing Adalius Thomas during 2009). However, the 2006 CBA allowed teams to designate two pre-June 1 cuts as post-June 1 cuts. If a player is released after June 1, that acceleration is divided equally into the current year and the next year, as long as that next year wasn’t uncapped (which, again, means the Cowboys would have ~$9M accelerate into 2009 by releasing Thomas before or after June 1, 2009). Trades, no matter before or after June 1, would always trigger acceleration. In an uncapped year, there is no acceleration at all; neither into the current year nor into the current year and the next year. When a player is released or traded during an uncapped year, his bonus amortizations in future years remain intact.. For example, if Player X is released in 2010 (uncapped) and has $4M bonus amortizations in 2010, 2011, and 2012, those $4M cap hits would stay in each of those four years and not accelerate.
