What is Franchise Tag?
A franchise Tag is a designation used in the NFL to keep a player on a team for one year. It is essential in the NFL because it allows teams to keep their star players for at least one more year. It’s also significant in sports contracts because it affects a player’s salary and ability to negotiate with other teams
Types of Franchise Tags
1. Exclusive Franchise Tag
The Exclusive Franchise Tag is a nomination in the NFL that restricts a player’s free agency by offering a one-year contract. The players get the facilities in the exclusive franchise tag.
- Player Restrictions and Benefits-The Exclusive Franchise-Tag is a selection that NFL teams use to restrict the free agency of one player per year. The player receives a one-year contract offer from their current team. The player is not allowed to negotiate with other groups during this time.
- Salary Calculation- The salary calculation is based on the average of the top five salaries at the player’s position. This amount is fully guaranteed for the upcoming season, and if the player signs the tender, they are committed to playing for their current team for at least one more year.
- Negotiation and signing- If a player is tagged with the Exclusive Franchise-Tag, they are not allowed to negotiate with other teams during this time. They negotiate with their current team to work out a long-term contract extension. If a long-term deal is not reached by the deadline (usually mid-July), the player must play under the one-year tender offer or sit out the season. Once the deadline passes, the player cannot sign a new contract until after the end of the season.
Exclusive franchise tag provides exclusive negotiating rights to a player. The player cannot enter into negotiations with other teams while under this tag.
2. Non-Exclusive Franchise Tag
In the Non-Exclusive Franchise Tag, the player can negotiate with other teams during this time. If the player signs an offer sheet with another group and their current team chooses not to match it, they will receive two first-round draft picks as compensation for losing the player.
- Player Restrictions and Benefits-in the Non-Exclusive Franchise Tag, the player can negotiate with other teams during this time, but their current team has the right to match any offer made by another team.
- Salary Calculation- The salary calculation for the Non-Exclusive is based on the average of the top five salaries at the player’s position, or 120% of their previous year’s salary, whichever is greater. This amount is fully guaranteed for the upcoming season, and if the player signs the tender, they are committed to playing for their current team for at least one more year.
- Compensation for Loss- If a player tagged with the Non-Exclusive Franchise Tag signs an offer sheet with another team. Their current team chooses not to match it, the current squad receives two first-round draft picks as compensation for losing the player. However, this rarely happens as most groups prefer to work out a long-term contract extension with the player rather than risk losing them for draft picks.
Under non-exclusive tag, a player negotiates with other teams. The current team has the right to match any offer made by another team.
Risks and Benefits of Franchise Tag
- Exclusive tags provide maximum security for the team but limit the player’s options.
- Non-exclusive and transition tags offer more flexibility for the player, but may result in competition for their services.
- Teams must carefully consider their salary cap situation before using any type of franchise tag.
Franchise Tag Process
The Franchise Tag Process is an implementation used in the NFL to restrict the free agency of one player per year. The process involves several steps
- Designation Window-The franchise-tag process begins with the designation window, a period in which NFL teams designate one player per year as their franchise player. This window usually opens in late February and closes in early March.
- Player Acceptance or Negotiation- in the franchise tag, the players can either accept the one-year contract offer from their current team or negotiate a long-term contract extension. If the player gets the offer, they are committed to playing for their current team for at least one more year. If they negotiate a long-term deal, the team, and the player must agree on the deadline (usually mid-July).
- Salary Determination and Cap Implications- The salary for a franchise player is determined based on the type of tag used (Exclusive or Non-Exclusive) and the player’s position. The pay is fully guaranteed for the upcoming season. It is counted against the team’s salary cap. It significantly impacts the team’s ability to sign other players and build their roster.
- Impact on Team’s Cap Space and Roster Building-The Franchise Tag Process can significantly impact a team’s salary cap space and its ability to build its roster. The cost of the franchise tag is substantial and limits a team’s ability to sign other players or make other roster moves. However, a franchise tag provides a team with stability at a critical position and prevents a valuable player from leaving in free agency.
Franchise Tag From Player's Perspective
Considering franchise tag from a player perspective, you will get several steps.
- Pros and Cons of Franchise-Tagged-from a player’s perspective, you can face both pros and cons of a franchise Tag. The pros include receiving a fully guaranteed one-year contract offer that is either the average of the top five salaries at their position or 120% of their previous year’s salary. It provides financial security for the upcoming season. The cons include not negotiating with other teams during this time, which can limit a player’s ability to explore other options and earn a higher salary. If a player suffers a severe injury, their earning potential in future seasons could be impacted.
- Player Strategies and Responses-When a player is tagged with the Franchise Tag, they have several strategies and responses. They accept the one-year contract offer and play under the tag, negotiate a long-term contract extension with their current team, or refuse to sign the title and hold out for a better deal. The strategy a player picks depends on their circumstances, including their financial goals, their desire to stay with their current team, and their confidence in their ability to secure a better deal in free agency.
Long-Term Deal vs. Playing under the Tag-Playing under the tag provides financial security for the upcoming season, but it is a one-year commitment. Negotiating a long-term deal offers more stability and potentially higher earnings in future seasons; it also comes with more risk as there are no guarantees that an agreement will be reached. Ultimately, the decision depends on the player’s circumstances and goals.
Franchise Tag From Team's Perspective
- Roster Management and Tagging Strategy-Teams use the tag to retain their best players and build around them. They use it strategically to prevent other groups from signing their players. Teams must be careful as it is expensive and limit their ability to sign other players.
- Financial Considerations and Cap Management-It guarantees a high salary for the player for one year. When using the tag, teams consider their salary cap situation and long-term financial goals. They are prepared to negotiate a long-term deal with the player.
Franchise Tag’s Role in Team Success-The Franchise-Tag plays a significant role in team success. It allows teams to retain their best players and build around them. It is not a guarantee of success, and teams have a solid overall roster and coaching staff to compete at a high level.
Negotiations and Long-Term Contracts in Franchise Tag
- Franchise Tag as Leverage in Negotiations-A team can prevent players from becoming free agents and signing with another couple, giving them more time to negotiate a long-term deal. The tag can also provide a baseline for negotiations, as it guarantees a specific salary for the player.
- Case Studies-Successful and Unsuccessful Negotiations-There have been both successful and unsuccessful negotiations involving the Franchise-Tag. One successful example is the Kansas City Chiefs’ negotiation with quarterback Patrick Mahomes. After using the tag on Mahomes in 2020, the Chiefs signed him to a 10-year, $450 million contract extension in 2020. One unsuccessful example is the Washington Football Team’s negotiation with quarterback Kirk Cousins. After using the tag on Cousins for two consecutive years, they could not negotiate a long-term deal, and he eventually signed with the Minnesota Vikings.
- Transition Tag and Its Differences with Franchise Tag-The Transition Tag is another type used in the NFL that is similar to the Franchise Tag has some key differences. The Transition Tag guarantees a lower salary than the Franchise Tag and allows players to negotiate with other teams. Still, it gives the player’s current team the right to match any offer made by another team. If the team decides not to match, they receive no compensation. The Transition Tag is generally used on players not considered as valuable as those designated with the Franchise Tag.
Similar to the non-exclusive tag, this tag allows a player to negotiate with other teams. The original team has the right to match offers, but no draft pick compensation is provided.
Legal and Contractual Aspects of Franchise Tag
- Collective Bargaining Agreement (CBA) and Franchise Tag-The Franchise Tag is a product of the Collective Bargaining Agreement (CBA) between the NFL and the NFL Players Association (NFLPA). The CBA outlines the rules and procedures for using the tag, including the salary amounts and deadlines for making the designation. The CBA is negotiated between the two parties and is subject to periodic renewal or renegotiation.
- Arbitration and Disputes Resolution-The NFL has a formal arbitration process to handle disputes between players and teams, including those related to using the tag. The process involves an independent arbitrator who hears arguments from both sides and makes a ruling.
- Tagging Frequency and Restrictions-Teams can use the tag on one player per year, although they use the Transition Tag on another player if they choose. There are restrictions on using the tag on the same player in consecutive years, known as the “three-year rule”. If a player is tagged with the Franchise Tag for three straight years, their salary for the third year is significantly higher than the first two years. The CBA also outlines restrictions on using the tag on players who have been injured or have missed significant time due to injury.
Using the franchise tag is a delicate balance for teams between player retention and salary cap management
Future Trends and Developments of Franchise Tag
- Evolving Franchise Tag Rules-The NFL and NFLPA negotiate the rules for the tag as part of the Collective Bargaining Agreement. It changes in response to player concerns or changes in the league’s financial situation. For example, in 2020, the NFL increased the salary amounts for players designated with the Franchise Tag.
- Potential Alternatives and Reforms-Some players and analysts have suggested that a fully guaranteed long-term contract will be a better option for players, as it would provide more long-term security. Others have suggested that a “supermax” contract similar to those used in the NBA could be used to retain star players. However, any changes to the Franchise Tag system must be negotiated between the NFL and NFLPA.
Franchise Tag in Other Sports Leagues-The Franchise-Tag is not unique to the NFL and is used in other sports leagues. The NBA has a similar system known as the “Bird Rights” that allows teams to retain their free agents by offering them a higher salary than other teams can offer. Major League Baseball has a “Qualifying Offer” system that allows teams to extend a one-year offer to their free agents, similar to the Transition Tag used in the NFL
The Franchise Tag is a significant tool NFL teams use to retain their best players and negotiate long-term deals. It has pros and cons for players and teams and can impact player-team relationships, financial considerations, and team success. The Franchise-Tag balances player and team interests in the NFL. While it can limit player mobility and long-term security, it also allows teams to retain their best players and maintain a competitive balance in the league. The Franchise Tag will likely play a significant role in the NFL and other sports leagues.
FAQs about Franchise Tag
A. A franchise tag is a selection used by NFL teams that allows a player for one year by offering a contract at the average of the top five salaries at the player’s position.
- The three types of franchise tags in the NFL are exclusive franchise tags, non-exclusive franchise tags, and transition tags.