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The term came into wide use after sports leagues stopped using a “reserve clause“, which provided a repetitive option for the club to renew the contract for one or more years but did not allow the player to terminate it. 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 in which they currently play.
- Unrestricted free agent
Unrestricted free agents 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 a 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.
- Restricted free agent
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, if the original team decides not to match the other team’s offer for the restricted free agent, the new team provides some number of draft selections to the original team as compensation for losing the player.
- Undrafted free agent
Players who are not drafted in a league’s annual draft of amateur players are considered to be unrestricted free agents and are free to sign contracts with any team.
In professional association football, a free agent is a player that has been released by a professional association football club and now is no longer affiliated with any club, but has not finished his or her professional career.
Free agents do not have to be signed during the normal transfer window that is implemented in some countries’ leagues. If they are signed by a team, the team signing them does not have to pay any fees – sometimes this is known as “snapped up on a free transfer”.
If a player gets released from their club when the transfer window is closed, they cannot sign for another team until the window reopens. A notable case of this being Sol Campbell who in September 2009 was released from Notts County, just after a month from signing on a free transfer. He signed for his former club Arsenal in January 2010, after spending a few months training with the team to maintain his fitness.
National Football League usage
- Restricted free agents
Restricted free agents (RFAs) are players who have three or more accrued seasons of service and whose contracts have expired. RFAs have received qualifying offers from their old clubs and are free to negotiate with any club until a deadline which occurs approximately a week prior to the NFL Draft (for 2010 the deadline was April 15), 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.
- Unrestricted free agents
Unrestricted free agents are players who have completed four or more accrued seasons of service and whose contracts have expired. They are free to sign with any franchise.
- Undrafted free agents
Undrafted free agents are players eligible for the NFL Draft but who are not selected; they can negotiate and sign with any team.
- “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.