Free agent
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In professional sports, a free agent is a player whose contract with a team has expired and who is thus eligible to sign with another club or franchise.
The term came into wide use in North America after when sports leagues stopped using a "reserve clause", which provided a repetitive option for the club to renew the contract for one more years but did not allow the player to terminate.
In the European Union, the 1995 Bosman ruling by the European Court of Justice established this right for association football players in all EU member nations. The Bosman ruling has since been extended to cover other professional sports and players from Eastern Europe. Players were still tied to their clubs unless their contract ran out until the Webster ruling allowed players the opportunity to move between nations, though it does not free footballers to move within the national league they currently play in.
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[edit] Restricted and unrestricted free agency
Unrestricted free agents (UFAs) are players without a team. They have either been released from their club, had the term of their contract expire without a renewal, or were not chosen in league's draft of amateur players. These players, generally speaking, are free to entertain offers from all other teams and to decide with whom to sign a new contract.
The specific rules of restricted free agency vary among the major professional sports, but in principle, it means that a player is free to solicit offers from other teams for new contracts. However, before this player is allowed to sign with the new club, the current club has a chance to match (or come within 10% in some leagues) the terms of the new contract in which case the player must remain with the original team. In some leagues, when a team signs a restricted free agent, they must compensate the original team with draft picks. In certain leagues there is a set date for which free agents are to begin being signed (NHL).
[edit] Undrafted free agency
Players who are not drafted in a league's annual draft of amateur players are also considered to be unrestricted free agents and are free to sign contracts with any team.
[edit] Drawbacks for owners
The economics of free agency are disadvantageous for team owners; it can lead to bidding wars -- and increased player salaries mean decreased owner profits. Restrictions on free agency have therefore been preferred by North American team owners since the abolition of the reserve clause. For example, a draft can be used to keep young and talented players from generating bidding wars, and causing higher player salaries throughout the league. Furthermore, some teams which play in large market cities, and hence have a larger revenue stream, would be able to outbid other teams for talented players. Some leagues, such as the NFL or NBA have imposed salary cap rules in order to avert such bidding wars.
In Europe, the wages of the top players have increased dramatically since the Bosman Ruling, although this is partly due to increased television revenues. Some club chairmen have called for a payroll cap in a bid to control player wages but this would almost certainly be ruled anti-competitive and therefore illegal under EU law. As in North America, the number of transfers involving a fee are on the decline as clubs can now wait for their targets to see out their contracts and move "on a free".
[edit] Deadlines
In some leagues, free agency has deadlines. For example, under the current NHL Collective Bargaining Agreement, restricted free agents who do not sign contracts by December 1 of a given year will be ineligible to play in the NHL for the balance of that season. However, other leagues (such as the NBA) have no such restrictions.
In Europe, players can only move during transfer windows—during the close season and half-way through the league season. There are exceptions for unattached (i.e., unemployed) professional players in the lower divisions.
[edit] NFL usage
[edit] Exclusive-Rights free agents
Exclusive-Rights Free Agents (ERFAs) are players who have completed between 0-2 accrued seasons of service whose contracts have expired. If tendered, they have no negotiating rights with other clubs and must sign their tender with their old club or sit out the season.
[edit] Plan B free agency
Plan B free agency was a type of free agency that became active in the National Football League in February 1989. Plan B free agency permitted all teams in the NFL to preserve limited rights of no more than 37 total players a season. If a player was a protected Plan B free agent, he was incapable of signing with another team without providing his old team the first opportunity to sign him again. The rest of the players were left unprotected, liberated to negotiate contracts with the rest of the teams in the league.
Eight players sued the NFL in U.S. federal court, stating that Plan B was an unlawful restraint of trade. In 1992, a jury found that Plan B violated antitrust laws and awarded damages to the players.
[edit] Restricted free agents
Restricted Free Agents (RFAs) are players who have completed three accrued seasons of service and whose contracts have expired. They have received qualifying offers from their old clubs and are free to negotiate with any club until April 21, at which time their rights revert to their original club. If a player accepts an offer from a new club, the old club will have the right to match the offer and retain the player. If the old club elects not to match the offer, it may receive draft-choice compensation depending on the level of the qualifying offer made to the player.
[edit] Undrafted free agents
Undrafted Free Agents (UDFAs) are players eligible for the NFL Draft but who are not selected; they can join any team willing to sign them, and can negotiate with any team.
[edit] Unrestricted free agents
Unrestricted Free Agents (UFAs) are players who have completed four or more (six or more in uncapped seasons) accrued seasons of service and whose contracts have expired. They are free to sign with any club.
[edit] MLB usage
In Major League baseball, free agents are classified as either Type A, Type B, or unclassified. Type A free agents are those determined by the Elias Sports Bureau to be in the top 20 percent of all players based on the previous two seasons. Type B free agents are those in the next 20 percentile. Unclassified free agents are those remaining in the bottom 60 percentile. Teams that lose a Type A free agent, to whom they have offered arbitration, receive the top draft pick from the team that signs the free agent, plus a supplemental draft pick in the upcoming draft as compensation. Teams losing Type B free agents, or Type A's not offered arbitration, receive only a supplemental pick as compensation. Teams that lose unclassified free agents do not receive any compensation.[1]
