As defined by the Collective Bargaining Agreement (CBA), a free agent is any player who is not under contract to any team and thus has fully free rights to negotiate with any other team for new contract terms.Free agents are classified into two categories: restricted and unrestricted. Furthermore, a team may "tag" a player as a franchise or transition, which places additional restrictions on that player's ability to negotiate. However, the ability to "tag" is quite limited, and only affects a handful of players each year.
A player who has 3 years of experience is eligible for restricted free agency, whereby his current team has the chance to retain rights to this player by matching the highest offer any other NFL franchise might make to that player. The club can either block a signing or, in essence, force a trade by offering a salary over a certain threshold. In 2006, these thresholds were as follows:
- If a club tenders an offer of $685,000 per year for a three year veteran, and $725,000 for a four year veteran, the player's current team has "right of first refusal" over the contract at those terms, and may sign the player at those terms.
- If a club tenders an offer of $712,000 or 110% (whichever is greater) of the previous year's salary, then the current club has both "right of first refusal" and rights to a draft pick from the same round (or better) from the signing club. Essentially, this means that the new club must forfeit the draft pick to the old club if they wish to sign the player under these terms.
- If a club tenders an offer of $1.552 million or 110% (whichever is greater) of the previous year's salary, then the current club has both "right of first refusal"; and rights to thefirst round draft pick from the signing club.
In 2011, free agency guidelines returned to the way they were from 1993 to 2009. This means that a player needs four years of experience to become an unrestricted free agent, and three years of experience for restricted free agency.
A player who has four or more years of experience is eligible for unrestricted free agency, whereby his current team has no guaranteed right to match outside offers to that player. This means that players in this category have unlimited rights to negotiate any terms with any team.
In 2010, the CBA was not extended, thus the rules changed so that players don't become "Unrestricted Free Agents" until they have at least six years of experience. They will be "Restricted Free Agents" if they have three–five years of experience. There will also be limitations imposed on which clubs are allowed to sign free agents. This is part of a set of rule changes written into the CBA designed to encourage the owners and the NFLPA to negotiate a new CBA: the players lose some free agency rights, and the owners lose the salary cap.
The franchise tag is a designation given to a player by a franchise that guarantees that player a contract the average of the five highest-paid players of that same position in the entire league, or 120% of the player's previous year's salary (whichever is greater) in return for retaining rights to that player for one year. An NFL franchise may only designate one player a year as having the franchise tag, and may designate the same player for consecutive years. This has caused some tension between some NFL franchise designees and their respective teams due to the fact that a player designated as a franchise player precludes that player from pursuing large signing bonuses that are common in unrestricted free agency, and also prevents a player from leaving the team, especially when the reasons for leaving are not necessarily financial. A team may, at their discretion, allow the franchise player to negotiate with other clubs, but if he signs with another club, the first club is entitled to two first round draft picks in compensation.