The franchise tag is one of the most important contract tools in the National Football League (NFL). Every offseason, fans hear about star players being “tagged” instead of hitting free agency — but what exactly does that mean?
Here’s a complete breakdown of what a franchise tag is, how it works, how much it pays, and why teams use it.
What Is the Franchise Tag?
A franchise tag allows an NFL team to retain a player whose contract has expired and prevent them from becoming an unrestricted free agent.
Instead of signing a long-term deal immediately, the team gives the player a one-year, fully guaranteed contract at a premium salary.
This ensures:
- The player stays with the team for at least one more season
- The team maintains negotiating rights
- The player receives top-tier compensation
How Much Is a Franchise Tag Worth?
The salary for a franchise-tagged player is determined by one of two formulas — whichever is higher:
- The average of the top five salaries at the player’s position over the previous five seasons
- 120% of the player’s previous salary
Because of this formula, franchise tag salaries are often among the highest at their position.
For example, quarterbacks typically receive the largest franchise tag values due to the high market at the position.
Types of Franchise Tags in the NFL
There are three versions of the tag under the NFL Collective Bargaining Agreement.
1. Exclusive Franchise Tag
- Player cannot negotiate with other teams
- Salary is based on the current year’s top five salaries
- Most restrictive and most expensive option
This tag is rarely used because of its cost.
2. Non-Exclusive Franchise Tag (Most Common)
- Player can negotiate with other teams
- If another team signs the player, the original team can:
- Match the offer, or
- Receive two first-round draft picks as compensation
This is the version most teams use.
3. Transition Tag
- Player can negotiate with other teams
- Original team can match any offer
- No draft-pick compensation if they choose not to match
The transition tag offers less protection than the franchise tag.
Why NFL Teams Use the Franchise Tag
Teams use the franchise tag to:
- Prevent a star player from leaving in free agency
- Buy more time to negotiate a long-term extension
- Maintain roster stability
- Avoid losing a player without compensation
For example, quarterbacks like Lamar Jackson have received the franchise tag before ultimately signing long-term extensions.
Why Players Often Dislike the Franchise Tag
While the salary is high, many players are not fans of being tagged because:
- There is no long-term security
- Injury risk increases on a one-year deal
- It can delay fully guaranteed, multi-year contracts
This tension often leads to contract standoffs during the offseason.
How Many Times Can a Team Use the Franchise Tag?
Teams can use the franchise tag once per offseason. However, if they tag the same player multiple times, the cost increases significantly:
- Second tag: 120% of previous tag salary
- Third tag: 144% of previous salary or quarterback-level pay
Because of the escalating cost, most players are tagged only once.
How the Franchise Tag Impacts the Salary Cap
The full franchise tag amount counts against the team’s salary cap immediately. This can restrict spending in free agency and force teams to restructure contracts to create cap space.
For this reason, some teams prefer negotiating long-term deals that allow them to spread cap hits across multiple seasons.
Final Thoughts
The franchise tag is a powerful contract mechanism in the NFL that allows teams to retain elite talent while navigating free agency. It offers short-term security for teams but can create tension with players seeking long-term guarantees.
Understanding how the franchise tag works helps explain many of the biggest offseason headlines in professional football.