There have been a lot of questions in recent months about how things will change on the NFL landscape when/if the owners and players association allow the current collective bargaining agreement to expire.
The NFL just released a question-and-answer about what will happen. Courtesy of the NFL, here are the answers to some frequently asked questions:
Q: When does the CBA expire should there be no extension to the agreement?
A: In March of 2011.
Q: Will there be a college draft in 2011?
Q: What is the “Final League Year” in the current agreement?
A: The “Final League Year” is the term used in the CBA to refer to the last year of the agreement. Without a further extension of the CBA, the “Final League Year” would be the 2010 League Year.
Q: What are the differences between the “Final League Year” and any other “League Year?”
A: The principal differences are that in the “Final League Year” there is no salary cap and there are substantial additional restrictions on player free agency and reductions in player benefits.
Q: Now that 2009 is the last capped year, are there rules that impact player contract negotiations and a club’s salary cap planning?
A: Yes. Here are the key differences:
–After the last game of the 2008 regular season, signing bonus proration was reduced from a maximum of six years to a maximum of five years.
–In 2009, there is no June 1 rule for Signing Bonus acceleration. If a player is removed from the roster or his contract is assigned via waivers or trade at any time in the 2009 League Year, any unamortized signing bonus will be immediately included in Team Salary.
–There is no year-end netting of incentives in 2009. Not-likely-to-be-earned incentives are charged to team salary immediately when earned, and likely-to-be-earned incentives are deducted when they are no longer possible to earn.
–Guaranteed salary from 2010 and beyond is reallocated to 2009 unless the entire 2009 salary is guaranteed.
–50% of guaranteed salary in any League Year beyond 2012 is reallocated to 2009.
–The 30% increase rule restricts salary increases from 2009 to 2010. For example: a player with a $500,000 salary in 2009 would be limited to annual salary increases of $150,000 ($500,000 x 30%) beginning in 2010.
–A team can include only three veteran team incentives in a player contract covering 2009 and beyond. These incentives must also be coupled with a playtime requirement. Previously, clubs were limited to eight team incentives and no playtime requirement.
Q: Are current player benefits affected in the Final League Year?
A: We expect player benefits to decline in the Final League Year. The union agreed that in the Final League Year, clubs would be relieved of their obligation to fund numerous benefit programs. Examples include second career savings (401K), player annuity, severance pay, performance-based pay, and tuition assistance.
Q: What determines an unrestricted free agent in the Final League Year (2010)?
A: In capped seasons, a player whose contract has expired becomes an unrestricted free agent if he has four or more accrued seasons. In the Final League Year (2010), a player whose contract has expired becomes an unrestricted free agent only if he has six or more accrued seasons. An unrestricted free agent is free to sign with any club with no compensation owed to his old club.
Q: What determines whether a player is a restricted free agent in the “Final League Year?”
A: In capped seasons, a player whose contract expires becomes a restricted free agent if he has three accrued seasons. In the Final League Year (2010), a player whose contract expires becomes a restricted free agent if he has three, four or five accrued seasons. The rights of restricted free agents remain unchanged in the Final League Year.
Q: In addition to the right to designate a franchise (or transition) player each capped year, can clubs designate additional players in the Final League Year?
A: Yes, one additional player can be tagged. In capped years, a club may designate a franchise player or a transition player. In the final league year (2010), a club may designate one additional transition player. A transition player must be offered a minimum of the average of the top 10 salaries of the prior season at the player’s position or 120 percent of the player’s prior 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 is the Final Eight Plan?
A: During the Final League Year, the eight clubs that make the divisional playoffs in the previous season have additional restrictions that limit their ability to sign unrestricted free agents from other clubs. In general, the four clubs participating in the championship games are limited in the number of free agents that they may sign; the limit is determined by the number of their own free agents signing with other clubs. For the four clubs that lose in the Divisional Playoffs, in addition to having the ability to sign free agents based on the number of their own free agents signing with other clubs, they may also sign players based on specific financial parameters.
Q: Is there an Entering Player Pool in the Final League Year?
A: There may be. The CBA provides that the league has the unilateral right to keep or eliminate the rookie pool in the Final League Year.
Q: Is there a Minimum Team Salary in the Final League Year?
A: There is no Minimum Team Salary in the Final League Year. The Minimum Team Salary in 2009 is projected to be $107,748,000, meaning each team is required to allocate $107 million on player costs (not including benefits). The team salary cap in 2009 is $123 million.
Q: Are there individual player minimum salaries in the Final League Year?
A: Yes, but they rise at a rate somewhat slower than player minimum salaries rise in capped years.
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