Contract Free Agency Auction:
A Tutorial
This Tutorial is a continuation of the Contracts 101 Introduction to the AFFL's new Contract Rules. Think of it as Contracts 201
The Free Agent Auction
The Free Agent Signing Period...or Free Agent Auction...is designed to mimic the NFL's off-season free agency period. In the NFL's off-season free agency period, players shop themselves around to other teams to try to get a better deal for themselves - in the AFFL it works basically the same way, but it's done through an Auction.
Terminology
In Fantasy Football we're all familiar with Free Agency and the Waiver Wire - all the players out there that are available because they aren't on any team's roster. Well get those players out of your head - they have nothing to do with the AFFL off-season Free Agency Period. We'll refer to those players as "Regular Free Agents" and they play absolutely no role in the Free Agent Auction.
For the Free Agent Auction, we're looking at a NEW class of player, the "Rostered Free Agent"
Rostered Free Agents are players already on a team's roster, and there are 2 types of them:
- Restricted Free Agents
- Unrestricted Free Agents
Restricted Free Agents (RFA's) - are players on a team's roster that are under contract, BUT, as of April 1st have entered their last year of the contract (and have neither been placed under the Franchise Tag OR been signed to a Contract Extension)
Unrestricted Free Agents (UFA's) - are any player on a team's roster that are not under contract
The Free Agent Auction involves ONLY RFA's and UFA's and has nothing at all to do with traditional, or Regular Free Agents.
The Auction is actually 2 independent auctions - 1 auction for RFA's and another, separate auction for UFA's. The auctions are conducted on the MFL site, and they are 'long-running' auctions, which means you don't have to log in at a set time and date; the auctions last several days, so you can check in periodically to make bids or to see if any other team has outbid a previous bid you've made.
Let's look at each auction....
Unrestricted Free Agent (UFA) Auction
The RFA Auction is actually held first, and the UFA Auction held after, but we're going to look at the UFA Auction first because it's simpler to explain and to understand.....
First, try to think of the Unrestricted Free Agent Auction this way:
- Every team has Unrestricted Free Agents, these are players that are playing for their teams without benefit of a contract
- You can even name these players as Keepers if you want, and each year in the draft, the players you draft will play that season without a contract (until you cut them)
- Then, each off-season, you can either sign them to a contract, or let them remain Unrestricted Free Agents
- They can keep playing for you from year to year as UFA's for their League Formula Salary (Prior Season Total Points x 100k)........UNLESS......
- Some other team offers them MORE MONEY AND A CONTRACT to go and play for them
And that's what the Auction is for
The Auction Set-Up
- All UFA's - players on all teams that are not currently under contract - will be removed from their teams to be placed into the UFA Auction Pool - don't worry, these players still belong to their teams at this point
- Orphan team rosters are excluded from the Auction; Teams and Team Rosters who have no Active Contracts are also excluded from the Auction
- Before the Auction starts, participating teams will be emailed a UFA Auction Guide that will include a list of all the UFA's in the Auction, their Current Salary (based on League Formula), and the Minimum Opening Bid for each of them
- All teams will be given an initial 'bank' of $999.0m to bid with - BUT THIS IS FOR BIDDING PURPOSES ONLY - more on the money in a minute
- The Commish will nominate every UFA in the player pool to be bid on in order to start the Auction
- All UFA's in the pool will be nominated at the start
- No other teams will have nominating privileges - and there will be no other players that need to be nominated
- Each UFA nominated for bidding by the Commish, will be nominated with a bid equal to their Current Season Salary - as listed in the emailed UFA Auction Guide
- In the Auction, it will appear as if the Commish has made "Opening Bids" on each of these players by nominating them, BUT these are not actual bids, it's just the way the Auction has to be set up
- The Commish will then email the league to announce that the Auction is ready for Opening Bids
Opening Bids.....
IMPORTANT: DO NOT MAKE AN OPENING BID ON YOUR OWN UFA(s) - remember, they still belong to you until another team begins bidding on them
- Once all UFA's have been nominated by the Commish to start the Auction, the Opening Bid for each individual UFA will be EQUAL TO: Current Season Salary + $500,000
- What this means is you're offering the player a half million dollar raise on their Current Salary AND a 1 year Contract at that rate
- The Minimum Bid for each UFA in the Auction will be listed in the UFA Auction Guide
- Teams are allowed to offer MORE than the Minimum as an Opening Bid if they choose to
- WARNING: The system will allow a bid that is less than the individual player's required Minimum Opening Bid, but it will not be recognized as a valid bid when the Auction concludes
- If a team bids less than the required Minimum on a player you wish to bid on, just bid the Required Minimum to get the bidding going on that player
- Any participating team can choose to make an Opening Bid - or not - on any RFA and/or on as many RFA's simultaneously as they choose
- In other words, there will be individual bidding going on for all UFA's in the Auction at the same time, and teams can participate in any or all or none of them
Bidding.....
- Once a legal Opening Bid is made in the amount of a UFA's Minimum Opening Bid, any other team can make a higher bid in any increment of $500,000 or more
- Then it works like any other Auction. Teams interested in an UFA can continue to bid on that player in the hopes of outbidding all other teams
- At this point, if the UFA is one of your own UFA's and you want to keep him, you will have to jump into the bidding and be the high bid in order to retain him - on the other hand, if you don't care about losing him, just sit back and watch other teams pledge money on a player you don't want
- The only difference from most Auctions, is that the bidding for all players will be going on at the same time
- The TIMER for each player will be individually set for 36 hours
- This means that a 36 hour timer for EACH UFA resets with every new high bid....AND
- That once 36 hours has passed without a NEW HIGH BID the bidding FOR THAT INDIVIDUAL UFA will close
- Once bidding on an individual UFA has closed, the High Bid will be considered a "TENDERED OFFER" and the team offering it (the winning bidder) will have claimed the rights to that player - but they MUST then sign the player to a Contract for the amount of the Tendered Offer or High Bid, but more on that in a minute
- Once bidding on all UFA's has closed (all individual 36 hour timers have run out) the Auction will be over
Before moving on to some examples, it's a good time to look at that $999 million dollar bank that everyone will be bidding with.....
The $999.0m Bank vs ACTUAL Salary Cap Money
Before moving on to examples, now is a good time to talk about the $999 million dollar bank that all teams will start the auction with
Using the $999m bank is just a convenient way of giving teams dollar amounts to bid with, but it doesn't reflect what the team's available funds may be......think of it as money the teams are PLEDGING to pay in a contract with their own funds
When teams make a bid in the auction (from the $999 million bank, they are "pledging" to pay the UFA a contract for that amount. Teams that eventually ACQUIRE (or retain) the rights to a player by being the Highest Bidding Team WILL HAVE TO SIGN THAT PLAYER TO A NEW CONTRACT
With the $999m bank teams will have the ability to bid on multiple players and/or to make multi-year bids that could total in the hundreds of millions - this is PLEDGED money - and they will have to sign the UFA to a contract, and THAT MONEY will come from a team's individual salary cap and individual salary cap situation
Makes Sense?
Each team's situation will be different, but the IMPORTANT part to understand is that the $999m is JUST BIDDING MONEY and actually ACQUIRING the player will move to using each team's Salary Cap money (in this season and future seasons).......think of it this way: using $10 million from the $999m bank to make a $10m bid on a player is just like saying to them, "Hey, I'll pay you $10m to come play for me" - you haven't spent any actual money yet, just used up some of your bidding money to make an offer. If they say yes, THEN you're going to actually have to pay them the $10m and that money will come from your own Salary Cap money.
The same is true with available Contract Cap Years.....Teams have to have the Contract years available to back up the contracts they have 'pledged' in the auction
It will be up to each individual team to be aware of their own financial and contract situations to make sure they can BACK UP ANY BIDS THEY MAKE with a Contract and to have the AVAILABLE SALARY CAP AND CONTRACT CAP SPACE to fulfill that contract
You may be wondering why the auction isn't just set up with each teams individual cap space as the amount of money they have to bid with......The answer to that is because the bidding involves FUTURE SEASONS, and there's no way to determine future cap space; Teams also have the ability to re-structure salaries and what they owe to players in any given year, so teams' cap space is sort of fluid. A team might offer $10m to a player for a 1 year contract and only have $8m in available space between their current commitments and the Cut Cap - BUT they also have the ability to restructure some of their current commitments to come up with the extra $2 million to be able to pay that $10m
So AGAIN, when making bids, it is the responsibility of each team to keep track of what they can afford - now and in the future - when making their bids.
Let's move on to a couple of actual UFA bidding EXAMPLES
UFA Bidding EXAMPLES:
Two of the most important things to remember about bidding are:
- The amount your bidding is not the UFA's Salary, but the Total Contract Value of the contract you will offer if you're the winning bid....and....
- You can make that contract be 1-5 years, BUT each year MUST pay a salary equal to ( or more than) the UFA's current salary plus $500,000 (which is also equal to the minimum bid listed for each UFA)
So as an EXAMPLE, Taysom Hill is a UFA on the commissioner's New Orleans Raiders making a League Formula Salary of $24.3m......
- When the Commish sets up the auction, it will appear as if he's made an 'opening bid' of $24.3m - but that's just the player's current salary....
- The ACTUAL Opening Bid amount will be his current salary + $500,000, which is $24.8m and this info (for all UFA's) will be in the UFA Auction Guide that will be emailed.
- If no team makes a bid of $24.8m or more, Hill will be returned to the Raiders roster after the auction, and New Orleans can either name him as a UFA Keeper, or Cut Him on Cut Day
- If a team opens bidding on him with a $24.8m (or higher) bid, New Orleans must jump into the bidding in order to retain Hill on his roster
- If New Orleans doesn't mind losing him, he can just watch other teams bid on him
- Now let's say Team A bids $24.8m and no other teams bid on him
- Team A would win the bidding and would have to sign Hill to a 1 year, $24.8m contract
- If Team A opens with $24.8m and the bidding keeps going, with Team B becoming the final high bidding team with a bid of $40.0m
- Team B would then win the bidding and would have to sign Hill to a 1 year, $40m contract........but could they just make it a 2 year contract at $20m per year?
- No, because his minimum bid - $24.8m - is the minimum amount he can be paid in any year
- Let's say the bidding kept going, and Team C wins the bidding at $50.0m
- They have to then sign him to a $50m contract...BUT....they would have the option of signing a 1 year, $50m contract OR a 2 year, $50m at $25.0m per year
- Now let's say Team A jumped back in with a bid of $74.4m and wins the bidding at that amount
- Their options would be to sign Hill to 1 year at $74.4m...or
- 2 years at $37.2m (or some other combination, as long as each year was $24.8m)...or
- 3 years at $24.8m each
This example should give you a good idea of how it will work, and should also help explain why the Bidding Bank is set up how it is vs the actual money teams will have to spend if they win the bidding and acquire the rights to a player.
Once all bidding closes, the Commish will work with all high bidders to get their newly acquired UFA's under contract and the rest of them will be returned to their original rosters.
Now let's move onto the RFA's, if you understand how the UFA Auction will work, you're two thirds of the way toward understanding how the RFA Auction will work.
Restricted Free Agent (RFA) Auction
Now that we've looked at the UFA Auction, we'll take a look at the RFA Auction. The RFA Auction is very much like the UFA Auction, set up basically the same way with a few minor differences, but it also has a second step - the Signing Phase - that the UFA Auction doesn't have. That's going to be one of those things that seem a lot more complicated being explained than it actually will be, so we'll take it slow, step by step
The Auction Set-Up
Basically it's just like the UFA Auction, but this time with the RFA's:
- All RFA's - players in their final year of contract - will be removed from their teams to be placed into the RFA Auction Pool - don't worry, these players are still under contract and still belong to their teams at this point
- Orphan team rosters are excluded from the Auction; Teams and Team Rosters who have no Active Contracts are also excluded from the Auction
- Before the Auction starts, participating teams will be emailed an RFA Auction Guide that will include a list of all the RFA's in the Auction, their Current - final contract year - Salary, and the Minimum Opening Bid for each of them
- All teams will be given an initial 'bank' of $999.0m to bid with - BUT THIS IS FOR BIDDING PURPOSES ONLY - more on the money in a minute
- The Commish will nominate every RFA in the player pool to be bid on in order to start the Auction
- All RFA's in the pool will be nominated at the start
- No other teams will have nominating privileges - and there will be no other players that need to be nominated
- Each RFA nominated for bidding by the Commish, will be nominated with a bid equal to their Current Season Salary - as listed in the emailed RFA Auction Guide
- In the Auction, it will appear as if the Commish has made "Opening Bids" on each of these players by nominating them, BUT these are not actual bids, it's just the way the Auction has top be set up
- The Commish will then email the league to announce that the Auction is ready for Opening Bids.....see, all just the same as the Set-Up for the UFA's
Opening Bids.....
IMPORTANT: DO NOT BID ON YOUR OWN RFA(s) - you will have the chance to MATCH any bids made on your RFAs at the end of the Auction (more on that in a minute)
Opening Bidding in the RFA Auction works the same way as in the UFA Auction that we already went over....EXCEPT....the formula for the Opening Bid is different
- Once all RFA's have been nominated by the Commish to start the Auction, the Opening Bid for each individual RFA will be EQUAL TO: (Current Season Salary + $1.0m) x 2
- What this means is you're offering the player a $1 million dollar raise on their Current Salary AND a 2 year Contract at that rate - so, where UFA Bidding starts out with a 1 year contract, RFA's must be offered a minimum of a 2 year contract (the first year would be replacing the final year of the contract they are currently playing under)
- The Minimum Bid for each RFA in the Auction will be listed in the RFA Auction Guide
- Teams are allowed to offer MORE than the Minimum as an Opening Bid if they choose to
- WARNING: The system will allow a bid that is less than the individual player's required Minimum Opening Bid, but it will not be recognized as a valid bid when the Auction concludes
- If a team bids less than the required Minimum on a player you wish to bid on, just bid the Required Minimum to get the bidding going on that player
- Any participating team can choose to make an Opening Bid - or not - on any RFA and/or on as many RFA's simultaneously as they choose
- In other words, there will be individual bidding going on for all RFA's in the Auction at the same time, and teams can participate in any or all or none of them
Bidding.....
Bidding in the RFA Auction works basically just like in the UFA Auction with 3 main differences:
- Minimum Bid Amounts for RFA's are in increments of $1 million (instead of the $500,000 for UFA's
- RFA's must eventually be given AT LEAST a 2 year contract, while UFA's can be won with just a 1 year contract
- The High Bidding team DOESN'T automatically win the rights to the RFA; once a high bidder is determined, it goes to a second phase where the team owning the rights to the RFA can match the high bid offer
- Once a legal Opening Bid is made in the amount of an RFA's Minimum Opening Bid, any other team can make a higher bid in any increment of $1.0m or more
- Then it works like any other Auction. Teams interested in an RFA can continue to bid on that player in the hopes of outbidding all other teams
- The only difference from most Auctions, is that the bidding for all players will be going on at the same time
- The TIMER for each player will be individually set for 36 hours
- This means that a 36 hour timer for EACH RFA resets with every new high bid....AND
- That once 36 hours has passed without a NEW HIGH BID the bidding FOR THAT INDIVIDUAL RFA will close
- Once bidding on an individual RFA has closed, the High Bid will be considered a "TENDERED OFFER" and the team offering it (the winning bidder) will be considered the "High Bidding Team" (but they don't have the RFA just yet, more on that in a minute)
- Once bidding on all RFA's has closed (all individual 36 hour timers have run out) the Auction will be over and will move on to the Signing Phase of RFA Free Agency
Before moving on to how the Signing Phase will work, let's do a
Bidding EXAMPLE:
Patrick Peterson is under contract with the Pittsburgh Maulers. He has 1 year remaining on a 1 year contract, and under the terms of his contract, he is making $16.9m this season. Since he is in his final year under contract, he is an RFA and will be in the RFA Auction Player Pool.....
- At the start of the Auction, the Commissioner will nominate him with a 'bid' of $16.9m
- The Minimum Opening Bid for him is ($16.9m +$1.0m) x 2 which equals $35.8m (this information - on all RFA's - will be in the RFA Auction Guide each team will receive by email)
- Team A then 'Opens Bidding' on him by increasing the Commish's nominating bid of $16.9m to a bid of $35.8m (which equals his stated "Opening Bid")
- If no other teams bid (and if Pittsburgh chooses not to match the offer - more on that later), Team A would win the bidding with the $35.8m offer - that means they would have to sign Peterson to a 2 year contract worth a Total of $35.8m, paying him $17.9m this year and $17.9m next year - Notice each year is $1m higher than his current salary
- But then, maybe Team B would raise the bidding to $40.0m
- If Team B eventually wins, they would have to sign Peterson to a 2 year, $40.0m contract, paying him $20.0m in this season and next season - again, each year HAS to be higher than his Current Salary of $16.9m
- But let's say Team C then comes in with an offer of $54.0m
- If Team C eventually wins, they would have to sign Peterson to a new contract, BUT at this price, they could EITHER sign him to 2 years at $25.5m in each year....OR...3 years at $18.0m in each year
- The key is that the HIGHEST TOTAL AMOUNT wins the bidding, BUT that total amount can be split up into a multi-year contract AS LONG AS EACH YEAR IS WORTH AT LEAST $1 million more than the RFA's current salary
- In this example, TEAM C has the HIGHEST TOTAL BID, so that wins the bidding, BUT the number of years they sign the contract for is determined by the player's current season salary before bidding begins - Winning Bid amount divided by as many years as they want, as long as each year pays Peterson $1 million more than he was making before.
The $999.0m Bank vs ACTUAL Salary Cap Money
Before moving on to the Signing Phase and more examples, let's talk again about the $999 million dollar bank that all teams will start the auction with. If you understood this in the UFA section, it's essentially the same (just higher amounts and more contract years). If you keep in mind the idea that it's PLEDGED MONEY, you'll understand it.....and I'm using copy/paste here, so I'll probably repeat myself a bit.
Using the $999m bank is just a convenient way of giving teams dollar amounts to bid with, but it doesn't reflect what the team's available funds may be......
Teams that eventually ACQUIRE the rights to a player by being the Highest Bidding Team, and/or also Teams That RETAIN the rights to a player by matching the high bid WILL HAVE TO SIGN THAT PLAYER TO A NEW CONTRACT.......that will all be explained in the next section, but this section focuses on the money
With the $999m bank teams will have the ability to bid on multiple players and/or to make multi-year bids that could total in the hundreds of millions, BUT, it will eventually come time to sign the RFA to a contract, and THAT MONEY will come from a team's individual salary cap and individual salary cap situation
Let's use the Peterson EXAMPLE from above to explain it better:
- Each of the bids made by Team A, Team B, and Team C came out of their $999.0 Auction Bank
- Team C eventually 'won' the bidding with a High Bid of $54.0m
- - In the next section we'll see how Pittsburgh can retain Peterson with a matching bid, but for now, let's ignore that and assume that Team C ACQUIRES Peterson for the amount of the High Bid - $54.0m -
- Team C needs to be aware of their own individual salary cap situation and restrictions, BECAUSE....
- To complete the process, they will have to sign Peterson to a Free Agent Contract with a Total Value of $54.0m
- So, if they sign him to 3 years at $18.0m per year (like in the example), there will be a contract added into their Active Contracts and they will have $18.0m in commitments added to their existing commitments for this year, next year, and the next
Makes Sense?
Each team's situation will be different, but the IMPORTANT part to understand is that the $999m is auction/bidding money and actually ACQUIRING the player will move to using each team's Salary Cap money (in this season and future seasons)
Now, let's say Team C wins the bidding at $54.0m, but only has $16m in cap space this year instead of the neccessary $18m........they will then have to move money around (Re-Structure existing Contracts) to come up with the other $2m to sign Peterson to a Contract
The same is true with available Contract Cap Years.....
- Let's say Team C only has 2 years of Contract Cap Space available
- They would then be forced to make the $54m contract a 2 year deal instead of a 3, and would have to pay $27.0m per year in the terms of the contract
- If for whatever reason - Cap Space or Contract Year Space - Team C is unable to fulfill the terms of their high bid with an Actual Contract.....
- Then their high bid would be voided, and the next highest bidding team - Team B - would become the high bidder
It will be up to each individual team to be aware of their own financial and contract situations to make sure they can BACK UP ANY BIDS THEY MAKE with a Contract and to have the AVAILABLE SALARY CAP AND CONTRACT CAP SPACE to fulfill that contract
You may be wondering why the auction isn't just set up with each teams individual cap space as the amount of money they have to bid with......The answer to that is because the bidding involves FUTURE SEASONS, and there's no way to determine future cap space; Teams also have the ability to re-structure salaries and what they owe to players in any given year, so teams' cap space is sort of fluid.
So AGAIN, when making bids, it is the responsibility of each team to keep track of what they can afford - now and in the future - when making their bids.
Let's move on to the Signing Phase and how HIGH BIDS will be turned into WINNING BIDS and/or be rejected by MATCHING BIDS
The Signing Phase.....
the explanation here is much trickier than how it will actually work...
- Once the Auction concludes, any RFA's that DID NOT receive a valid Minimum Opening Bid - not counting the Commish's initial nominating bid - will be returned to their teams under the terms of their original contract to finish out the final year of that contract
For RFA's that have been bid on and that a Tendered Offer has been made (High BID), a progression of events happens (these happen by email with Commish):
- The team owning each RFA ("Original Team") will be given the choice to either MATCH the Tendered Offer for their RFA or NOT TO MATCH the Tendered Offer
- If they choose to MATCH the Tendered Offer, the High Bidding Team will be given the chance to increase their Tendered Offer
- If they choose NOT TO MATCH the Tendered Offer, the High Bidding Team will acquire the RFA
- If Original Team MATCHES the Tendered Offer in Step 1, then High Bidding Team has 2 choices...
- They can decline to increase the offer, OR
- They can raise the Tendered Offer by any amount they choose - BUT, they only get one shot at it
- If High Bidding Team declines to increase the Tendered Offer, then Original Team retains the RFA
- If High Bidding Team increases the Tendered Offer, then....
- Original Team has the option to MATCH the NEW Tendered Offer AGAIN to retain the RFA, OR
- NOT TO MATCH the NEW Tendered Offer and the High Bidding Team will acquire the RFA
THERE IS A CATCH TO EVERYTHING:
- If the Original Team RETAINS the RFA by MATCHING either the 1st or 2nd offer, they MUST sign the RFA to a NEW CONTRACT to the terms of the matched offer
- If the High Bidding Team ACQUIRES the RFA because Original Team chooses not to Match either the 1st or 2nd offer, then they MUST sign the RFA to a NEW CONTRACT to the terms of the 'winning' Tendered Offer AND must COMPENSATE the Original Team with a DRAFT PICK
So let's talk about this COMPENSATION...
Compensation.....
- Under any conditions that a high bidding team acquires an RFA, the RFA's Original Team will ALWAYS receive Compensation by Draft Pick
- Determining which Pick or Picks is a 2-step process
- First, the total amount of the bid is considered - this will equal the Total Contract Value (TCV) of the contract the acquiring team will sign the RFA to
- This amount is compared to the Total Contract Values (TCV) of ALL ACTIVE CONTRACTS that were in existence before the Auction
- If High Bid falls within the Top 33.3% of all TCV's of Active Contracts, it will require "Tier 1 Compensation"
- If High Bid falls within the Middle 33.3% of all TCV's of Active Contracts, it will require "Tier 2 Compensation"
- If High Bid falls within the Bottom 33.3% of all TCV's of Active Contracts, it will require "Tier 3 Compensation"
- Determining the Tier is Step 1, and will be handled by the Commish
Step 2....
- There is a chart (see below)
- Once the Tier for the Acquisition/RFA has been determined....the Original Team - the team losing the RFA - will select any Option from the chart in the appropriate Tier
- Not all options listed will necessarily be available - due to traded picks or other Compensatory Picks awarded - but if less than 2 Options are available for choosing, the Competition Committee will put an additional option in place
