Free Agent

A free agent is a player who is eligible to sign with other clubs or franchises i.e. not under contract to any specific team.

Restricted Free Agency

A restricted free agent (RFA) can sign an offer sheet with any team, but the player’s original team can retain him by matching the terms of that offer. The original team is said to have the “right of first refusal”.

Restricted free agency exists in the following situations:

• Following the fourth year of rookie “scale” contracts for former first-round Draft picks.
• For all veteran free agents who have been in the NBA for three seasons or less. The exception to this rule is a first-round Draft pick following his second or third season if his team doesn’t exercise its option to extend his rookie-scale contract for the following season. These players then become unrestricted free agents.
• A player coming off a two-way contract was on an NBA active or inactive roster for at least 15 days in the season beforehand.

There are five basic options for a restricted free agent:

• Accept his team’s prior qualifying offer, play out the season and become a free agent the next summer.
• Accept his team’s maximum qualifying offer (where applicable) and play under that long-term deal.
• Negotiate a new contract with his original team that is independent of the qualifying/max qualifying offer.
• Sign an offer sheet with another team through March 1, which his original team has an opportunity to match.
• Negotiate a sign-and-trade if he hasn’t signed an offer sheet with another team.
• If there is no qualifying offer, contract or offer sheet signed for one year, the original team can submit a new qualifying offer and the player will be a restricted free agent the next summer.

When a restricted free agent wants to sign with another team, he and the new team sign an offer sheet. The terms of that deal — which must be for at least two seasons — are given to the player’s original team, which has two days to match. If the team matches, then the player is under contract with his original team, but at the principal terms of the offer sheet. If the team passes on matching within two days, the player is under contract with the new team.

If the player for some reason refuses to report for a physical with the original team within two days of the match, the first refusal exercise notice is in play until the player reports. The original team also can withdraw its first refusal exercise notice if the player doesn’t report for a physical. At that point, the notice and the offer sheet are invalidated and the player becomes a restricted free agent again. He cannot sign with or be acquired by the offer sheet team for one year.

The team making the offer must have enough salary cap room for the offer sheet and must maintain that room until the offer sheet becomes official or the original team exercises the right of first refusal. The original team cannot match an offer greater than its salary cap room. That original team must have room for both the regular salary and any unlikely bonuses the offer sheet includes.

For a player to become a restricted free agent, his team must submit a qualifying offer to the player between the day after the last game of The Finals and June 29.

The qualifying offer is a standing offer for a one-year guaranteed deal, which becomes a regular contact if the player decides to sign it. This ensures that the team does not gain the right of first refusal without offering a contract themselves.

If a player is coming off a regular (non-Two-Way deal), he may qualify for a higher or lower qualifying offer provided he met (or did not meet) the “starter criteria” the previous season — or the average of the previous two seasons. Starter criteria are based on starting at least 41 games or playing at least 2,000 minutes in the regular season.

Qualifying offers expire on Oct. 1, but can be extended. However, the extension of a qualifying offer cannot go past March 1. If the deadline passes and the qualifying offer is neither withdrawn nor accepted, the player continues to be a restricted free agent. Teams and players are free to negotiate a new contract after the qualifying offer expires as the deadline only affects the player’s ability to accept his qualifying offer.

Players can always accept the qualifying offer and play the following season under its terms. This is sometimes done to ensure unrestricted free agency in the following offseason.

Unrestricted Free Agency

In short, an unrestricted free agent (UFA) is free to sign with any team. Once they sign, they are a part of that new team.

However, some unrestricted free agents have options on their existing contracts that, if exercised, may impact their choices.