So, How Does the Franchise Tag Work Anyway?

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So, How Does the Franchise Tag Work Anyway?

Chicago Bears

I think most fans understand the basics of what, why, and how the franchise tag is used by different NFL teams, but its many particulars make it a more complicated process than some might realize. And, given its relationship to the actual free agent pool that will ultimately be available to the Chicago Bears – setting aside their own franchise tag decision – it’s all important to really understand.

As Luis noted in the 2017 NFL Offseason Roadmap, the Bears can apply the franchise tag to players as soon as February 15, with the deadline coming in about two weeks after that on March 1.

Obviously, the big decision will be with respect to wide receiver Alshon Jeffery, who ranks as one of the top prospective free agents in football.

So, in the interest of educating ourselves on this important, impending decision, let’s take a big picture look at NFL’s franchise tag to fill in any gaps of knowledge.

At its highest level, a team can apply the franchise (or transition) tag to one (and only one) of its players scheduled to become an unrestricted free agent (meaning a player that is allowed to sign with any other team unconditionally (for more on the difference between a restricted/unrestricted free agent go here)). If certain conditions are met (we’ll get to those in a bit), the tag can bind a player to their team for one additional year.

The motivation for the creation of the franchise tag in 1993 was to reduce free agent player movement from small market teams to big market teams who could afford larger contracts (a common problem in professional sports). But now, with a hard salary cap and league-wide revenue sharing, the franchise tag is used primarily as a way to extend the bargaining period, up to July 15th, for key players. If no extension or long-term deal is agreed upon by that date, the player in question might a) receive a pre-determined salary (greater than his previous year’s salary) or b) have the option to negotiate with other teams.

But before we get too far (I’ll explain those points later), let’s discuss the three distinct forms a franchise tag can take:

  1. Exclusive Franchise Tag
  2. Non-exclusive Franchise Tag
  3. Transition Tag*

*The transition tag is a slightly different animal – it can be used only if a team does not use a franchise tag – but it relates enough to our discussion here today to warrant conversation.

If a team slaps an exclusive franchise tag on a player, it must offer him a one-year contract for (at least) the average of the top five salaries at his position as of April of that year, OR 120% more than the player’s salary from the previous season, whichever is greater. If a team designates a player with the exclusive franchise tag, that player cannot negotiate with any other teams that offseason.

It’s a pricey path, but a sure-fire way to keep the players you want. Of course, the hard salary cap (and 120% increase over last season’s salary) is what prevents teams from exclusively franchising the same player year after year.

Alternatively, if a team places a non-exclusive franchise tag on a player, it must offer him a one-year contract for (at least) the average of the top five cap hits (which includes not only the salary of a player, but also any bonuses the player is due in that league year) at the player’s position for the previous five years OR 120% more than the player’s salary from the previous season, whichever is greater. If a team designates a player with the non-exclusive franchise tag, that player can negotiate with other teams, but with a couple catches. First, if that players agrees to terms with another team, his original team has the right to match that offer. However, if they are unable (or unwilling) to match the offer and lose the player, the original team is compensated with two first-round draft picks from the new team.

It’s a less-certain way of keeping your star player, but it could be a little cheaper, or result in two first-round picks (which isn’t an unattractive consolation prize).

And just as an added, but important, aside: Teams are allowed to rescind a previously offered franchise tag, as noted most recently with Josh Norman.

Finally, if a team does not designate any franchise tag players, they may then use a similar device known as a transition tag. In the interest of clarity, a team may only use one of these three tags per offseason. If a team places a transition tag on a player, it must offer him (at least) the average of the top 10 salaries of the player’s position for the previous year or 120% more than the player’s salary from the previous year, whichever is greater.

With the transition tag, a player can negotiate with other teams, but the original team also preserves a right of first refusal, which allows them to match an offer the player in question receives from another team within seven days. If the original team matches the offer, the team retains the player, if not, no compensation is awarded. (If your instinct is telling you that the transition tag isn’t too much different from the non-exclusive franchise tag, you’re right. After some recent rule changes regarding which money is or isn’t guaranteed, some consider the transition tag wholly meaningless, which is why we tend to see it used much less frequently than either franchise tag.)

For some context, I’ve included the exclusive franchise player cost by position from last season:

  • Quarterback: $19,953,000
  • Defensive End: $15,701,000
  • Wide Receiver: $14,599,000
  • Linebacker: $14,129,000
  • Cornerback: $13,952,00
  • Offensive Linemen: $13,706,00
  • Defensive Tackle: $13,651,000
  • Running Back: 11,789,000
  • Safety: 10,806,000
  • Tight End: $9,118,000
  • Placekicker or Punter: $4,572,000

If the 2016 wide receivers’ figure looks familiar to you, that’s likely because it’s how much the Bears paid Alshon Jeffery last season via the franchise tag, after they were unable to agree on an extension (you can read more about the impending, pricey Alshon Jeffery decision here). If the Bears were to franchise Jeffery again, then, they’ll have to offer him at least $17,518,800 (which is 120% more than his 2016 salary), which is obviously quite a commitment, and why they’ll be pushing for an extension over another franchise tag.

So those are the basics of the franchise tag. But if you’re still interested in reading more, here are some sources for you to check out:

And, as a final point: because the NFL’s salary cap for 2017 won’t be officially set until after the Super Bowl, it’s impossible to exactly project what the 2017 franchise tag figures will look like (in short: the formula component is now calculated over a five-year period that’s tied to a percentage of the overall salary cap).

Fortunately, at CBS Sports, Joel Corry has used his own (NFL-confirmed) salary data and 2017 Salary Cap predictions to come up with some estimates for each position. Take a look, if you’re interested in the nitty-gritty, because he goes into much greater depth.

Author: Luis Medina

Luis Medina is a Writer at Bleacher Nation, and you can find him on Twitter at@lcm1986.