Sent a PM about this, but might be helpful for others so question is simple:
Does the 1 free drop have to be from your team or can it be a player aquired via trade?
You are allowed a free drop on players you inherit.
It's part of keeping in step with helping alleviate salary cap woes that were inherited.
You cannot trade for a $30m contract and then free drop that contract.
I hope this explains in full.