The NFL’s compensatory formula is pretty straight-forward in its essence: you lose more players to unrestricted free agency than you sign, and you get rewarded up to four additional selections in next year’s draft. The system is not always as easy as that, however, and the example of contract options shows it: if a team declines an option, making a player an unrestricted free agent in the process, he still factors into the compensatory formula.
This loophole never made much sense in the first place, and it is therefore no surprise to see the NFL closing it: as Over The Cap’s Brad Spielberger recently reported, the league has decided to do away with declined options being taken into the compensatory account.
This move certainly makes sense. Declining a contract option, after all, is basically the same as cutting a player with the difference that the team would previously still be rewarded for the move. Just take a look at the New England Patriots, who regularly include option years into their contracts and most famously parted ways with cornerback Darrelle Revis after the 2014 season by declining his $20 million team option for the following year.
Revis, in turn, hit the open market and was promptly — and after a little tampering — signed by the New York Jets. Due to him receiving a five-year, $70 million contract from his old team, the Patriots were awarded the second highest compensatory pick in the 2016 draft (the 96th overall selection that was later used on defensive tackle Vincent Valentine). All that happened despite New England making the conscious decision to part ways with the defensive back.
Revis is the most famous example of the Patriots using the option loophole to their advantage, but they have generally never shied away from including options in players’ deals in the first place: Alan Branch left New England in 2018 after his option was declined, while Matthew Slater’s was picked up one year later. The Patriots also added a second-year option to Antonio Brown’s deal in September to spread out his signing bonus (one that is currently subject of a dispute between the two parties).
Entering the 2020 offseason and with Brown off the team, the Patriots have only one player who has an option clause in his contract: cornerback Jason McCourty, who played at a high level in 2019 before a hip injury derailed his season, will receive a $500,000 roster bonus in case New England exercises the option next month to trigger the second year of his contract. Under the new set of rules, however, declining the option would not make McCourty a part of the compensatory formula despite him hitting unrestricted free agency.
The new set of rules, by the way, does not apply to rookie contracts. Under the collective bargaining agreement, after all, teams can add an optional fifth year to the deals of their first-round selections. If the option is declined and a player enters free agency after his original four-year deal expires, however, he still factors into the compensatory formula.