Each team gets 130 contract points a year. These points are used to sign free agent's and resign player's from your roster. Here is how the contract points work, for example someone is signing a 85 overall to a 3 year contract and this is the team's first person signed by the team:
You take the overall (85), divide it by ten (8.5), multiply that number by the amount of years you want to sign them to (8.5*3=25.5 total points). Now the team would have 104.5 points remaining to sign other players.