Only two weeks remain between the start of free agency and the new NFL year, and fans will hear a lot of contract and salary cap jargon as teams scramble to land some of the biggest free agents in this year’s market.
Teams will duke it out for such stars like Denver Broncos receiver Demaryius Thomas, Detroit Lions defensive tackle Ndamukong Suh, and Kansas City Chiefs outside linebacker Justin Houston.
But as reports trickle in regarding negotiations and complex contract clauses, fans might be a little befuddled. Some of the terms like "franchise tag" and "dead money" can be confusing.
The below free agency primer defines some of the more difficult contract and league rules, and points out some important dates to keep in mind as teams rev up for the 2015 season.
Free Agency Calendar, Key Dates
Beginning March 7 teams can start negotiations with players or their agents, though no contract can be agreed to until after 4 p.m. ET on March 10.
That time is important because it is also the start of the new league year. And even though they are rare outside of the movement of picks during the NFL Draft, it also kick starts the trade season. Even with Philadelphia Eagles quarterback Nick Foles involved in recent trade speculation, players like Foles can’t be moved until the 10th.
There are a number of high-profile players who could hit the open market next month, but their current teams could delay their unrestricted free agency by employing the franchise tag. Essentially, if a team and player can’t come to terms on a new contract then said team can use the franchise tag, stopping the player from becoming an unrestricted free agent for one year.
However, it can come at a huge cost to the team. The best example comes from the current contract dispute between the Dallas Cowboys and Dez Bryant. The star wide receiver wants a new long-term deal, but the Cowboys don’t have a ton of salary cap space to keep him and retain a few other top players.
Thus, Dallas can place the franchise tag on Bryant, which NFL.com estimates could be $12.8 million for next season alone. It’s a hefty sum, but it allows Dallas to keep Bryant a little longer and extend negotiations into the summer rather than watch him slip away to another team.
The tag is set league-wide either as the average salary of the top five players at a given position, or 120 percent of the player’s wages from the previous season. The larger total goes to the player if he’s tagged.
The Cowboys said they were considering the tag for Bryant, and he promptly took to Twitter to proclaim his frustration. Players don’t necessarily like the tag because it hinders their opportunity of signing a new long-term contract with a sizeable portion of guaranteed money, whether it’s with their current team or a new one.
One of the more confusing terms that fans will hear this season or any other is "dead" money. Basically it’s the money teams must still pay to players if they are cut or traded, working as a device to make sure teams don’t just release a player to avoid paying them.
The full dead money value of a player is calculated by adding the total amount he’s already been paid and the amount of guaranteed money left on his contract, and then subtracting his total cap hit so far. ESPN's Mike Sando provided an example of dead money in relation to kicker David Akers' contract.
Dallas Cowboys quarterback Tony Romo will represent the highest dead money figure in the league next season, in the highly unlikely event that Dallas cuts him, at $37.4 million. That total is so high due to the millions Dallas has already paid Romo, but more so from the millions he’s still owed through 2019, according to Spotrac.
Restricted Free Agent (RFAs)
Unlike unrestricted free agents, who are free to sign with any team, restricted free agents (RFAs) are at first limited to their current team. Teams are required to submit a qualifying offer by 4 p.m. ET on March 10 to RFAs and if they do so get the Right of First Refusal.
RFAs have until April 24 to sign an offer sheet from any team, but their current teams have until April 29 to use their Right of First Refusal. For example, Minnesota Vikings running back Matt Asiata will be a RFA next month, and if the Vikings want to keep him they must first submit a qualifying offer. Asiata and his representatives can then shop that offer to other interested teams.
If any team ups the offer, Minnesota has the opportunity to match or exceed it. If the Vikings refuse, Asiata can accept a higher offer from another team.
NFL teams covet salary cap space because it allows them flexibility and the ability to sign free agents. And many teams don’t use all of their cap space in a given year. Should it do so, a team can apply the money it saved from the previous season and roll it over into the next year.
In 2015, the Jacksonville Jaguars can spend an extra $21.7 million on players, on top of the expected $140 million salary cap, by far the most rollover cap room heading into next season.
Salary Cap Hit
You might hear that a player is due $5 million in salary, but his total salary cap hit is actually $7 million. That’s because a cap hit represents a player’s salary plus any bonuses they are due during the league year.
This season, Detroit Lions receiver Calvin Johnson is scheduled to make $12.5 million in salary, but his cap hit is $20.5 million thanks to the more than $8 million he’s also owed in bonus money.
The only figure that matters to players negotiating a new contract is the total amount of guaranteed money. NFL teams can cut players and void their salaries for the rest of their contracts, but could still owe them guaranteed money.
It can be a little misleading when you hear of a star like Houston Texans defensive end J.J. Watt agreeing to a six-year, $100 million contract extension. Watt is guaranteed only $51.8 million, most of which will come in bonuses through 2018. After that year, the Texans could cut Watt and it wouldn’t count a cent towards dead money against their salary cap.
Draft Pool Cap
Since the league changed how rookies are paid when they enter the league, with No. 1 picks no longer earning more than $50 million before playing a single down in the NFL, teams must now allocate a specific amount for players they draft.
For example, the Baltimore Ravens have a $4.1 million draft fund, the majority of which ($1.4 million) goes to their first round pick in April’s draft next season.