In the world of the National Football League (NFL), teams must navigate complex salary cap restrictions while retaining their most valuable players. One of the key mechanisms at their disposal is the franchise tag—a contractual tool that allows teams to keep a pending free agent for an additional year without committing to a long-term deal.
What is the Franchise Tag?
The franchise tag is a designation teams can use once per offseason to retain a player who would otherwise become an unrestricted free agent. It guarantees the player a one-year contract at a predetermined salary based on their position. This prevents them from testing the open market while ensuring they are compensated at a level comparable to the top players in their role.
Types of Franchise Tags
There are three distinct types of franchise tags, each with its own rules and financial implications.
1. Exclusive Franchise Tag
• The player cannot negotiate with other teams.
• The team must offer a one-year contract worth either the average of the top five salaries at the player’s position for the current year or 120% of their previous salary, whichever is higher.
• This tag is rarely used, as it comes with a high salary cap hit for the team. However, it ensures that the player stays with their current team with no outside influence.
2. Non-Exclusive Franchise Tag
• The player can negotiate with other teams.
• If they sign an offer sheet with another team, the original team has the right to match the offer or receive two first-round draft picks as compensation.
• The salary is determined based on the average of the top five salaries at the player’s position over the past five years or 120% of their previous salary, whichever is greater.
• This is the most commonly used form of the franchise tag, as it provides teams flexibility while still retaining leverage over the player’s future.
3. Transition Tag
• The player can negotiate with other teams.
• The original team has the right to match any offer, but if they choose not to, they do not receive any compensation in return.
• The salary is calculated based on the average of the top ten salaries at the player’s position instead of the top five, making it a lower-cost option.
• This tag is used far less frequently, as it provides fewer protections for teams.
Why Do Teams Use the Franchise Tag?
The franchise tag is often applied when a team and a player are unable to agree on a long-term contract before free agency. It allows the team to retain a star player for at least one more season while continuing negotiations.
For example, if a team has a star quarterback or pass rusher who is essential to their success but cannot reach an agreement on a long-term deal, using the exclusive or non-exclusive franchise tag ensures they don’t lose them without compensation. However, this also creates tension, as many players dislike being tagged due to the lack of long-term security.
Challenges and Controversies
While the franchise tag benefits teams, many players oppose it because it limits their ability to secure a multi-year deal with guaranteed money. Since the NFL is a physically demanding league with a high risk of injury, most players prefer long-term contracts that provide financial stability over a one-year, high-paying deal.
Some notable players in recent years have even refused to play under the franchise tag, holding out until a long-term deal was reached or demanding a trade.
Conclusion
The franchise tag is a powerful tool that helps NFL teams maintain control over their rosters while managing salary cap constraints. However, it remains a contentious issue between players and teams, often leading to tough negotiations and, at times, contract disputes. As the NFL continues to evolve, so will the use and perception of the franchise tag in shaping the future of player contracts and team-building strategies.