If you follow NFL free agency, you have probably heard the term What Is a Franchise Tag? But what does it actually mean, and why do teams use it? In simple terms, a franchise tag is a tool that allows an NFL team to retain an important player whose contract is about to expire and who could otherwise become a free agent.
The franchise tag usually gives the player a high-value one-year contract while giving the team additional time to negotiate a long-term deal. The NFL currently has three related tender designations: the non-exclusive franchise tag, exclusive franchise tag, and transition tag.
What Is a Franchise Tag?
A franchise tag is a one-year contract designation that an NFL team can use on an eligible player who is approaching free agency. Instead of allowing the player to immediately enter the open market, the team can offer a contract based on NFL salary rules.
The tag is particularly useful when a team wants to keep a star player but has not yet reached an agreement on a long-term contract.
For example, if a team has an important quarterback, wide receiver, running back, or defensive player whose contract is expiring, the franchise tag can give the team another season to keep that player while continuing negotiations.
Each NFL team can use one franchise or transition tender during the applicable offseason window.
How Does the Franchise Tag Work?
The franchise tag is designed to balance the interests of both the team and the player.
When a team applies the tag, the player receives a one-year tender at a salary determined by NFL rules. The amount depends on the player's position, previous salary, and the type of tag used.
For the most common non-exclusive franchise tag, the salary is based on the applicable position formula or 120% of the player's previous-year salary, whichever is greater.
The team and player can also continue negotiating a multi-year contract. If they do not reach a long-term agreement by the applicable deadline, the player generally plays under the one-year tender.
Types of Franchise Tags
There are three major tag designations that NFL fans should understand.
1. Non-Exclusive Franchise Tag
The non-exclusive franchise tag is the most commonly used version.
A player receiving this tag can negotiate with other NFL teams. However, his original team has the right to match an offer sheet from another team.
If the original team chooses not to match the offer and the player signs elsewhere, the original team receives two first-round draft picks as compensation. Because of this significant draft compensation, signing a non-exclusive franchise-tagged player can be difficult for another team.
2. Exclusive Franchise Tag
The exclusive franchise tag provides the original team with greater control.
A player receiving the exclusive tag cannot negotiate with other teams. His contract value is also higher than the standard non-exclusive tag formula, with the amount based on the applicable top salaries at his position or the relevant alternative calculation under NFL rules.
This type of tag is uncommon and can be particularly important when a team wants to prevent a highly sought-after player from testing the free-agent market.
3. Transition Tag
The transition tag is similar to the non-exclusive franchise tag but provides less protection for the team.
A transition-tagged player can negotiate with other teams, while his original team retains the right to match an offer. However, if the original team decides not to match, it does not receive draft-pick compensation.
Because the transition tag provides less protection, teams must carefully consider whether it is the right option for a particular player.
Why Do NFL Teams Use the Franchise Tag?
Teams use the franchise tag for several reasons:
- To keep an important player for another season
- To prevent a star player from immediately entering free agency
- To gain more time for long-term contract negotiations
- To protect valuable roster talent
- To avoid losing a key player without compensation
For a team competing for a championship, keeping a proven player for another season can be extremely valuable.
The tag can also act as a negotiating tool. A team may use the one-year tender while continuing discussions with the player about a multi-year extension.
Why Don't Players Always Like the Franchise Tag?
Although the franchise tag can provide a player with a large one-year salary, many players prefer a long-term contract.
A multi-year deal can provide greater financial security, including guaranteed money and protection against injuries or declining performance. A one-year contract, even at a high salary, gives the player less long-term security.
The tag can also limit a player's ability to choose which team he wants to play for, particularly when the exclusive version is used.
This creates an interesting situation in NFL free agency: the team wants to protect its investment, while the player may want the freedom and financial security of a long-term contract.
Can a Player Be Franchise Tagged More Than Once?
Yes. An NFL team can use the franchise tag on the same player more than once, but doing so becomes increasingly expensive.
Under the NFL's rules, a second franchise tag carries a significant increase over the player's previous franchise-tag salary. A third tag carries an even larger financial requirement, making repeated use increasingly expensive for the team.
This is one reason why franchise tags are generally viewed as a short-term solution rather than a permanent replacement for a long-term contract.
Franchise Tag vs. Free Agency
The biggest difference between the franchise tag and normal free agency is player movement.
In normal unrestricted free agency, an eligible player can negotiate with other teams and choose the contract that best suits him.
With a franchise tag, the player's options are restricted depending on the type of tag. A non-exclusive tag still allows outside negotiations, but the original team has matching rights and can receive draft compensation if the player leaves. An exclusive tag prevents outside negotiations.
Why Is the Franchise Tag Important?
The franchise tag is one of the most important tools in NFL roster management. It allows teams to retain elite talent while providing additional time to negotiate long-term contracts.
For fans, understanding the franchise tag also makes NFL free agency easier to follow. When a player is tagged, it can have major consequences for the team's salary cap, roster planning, draft strategy, and future contracts.
Ultimately, the franchise tag is a one-year bridge between a player's expiring contract and his next long-term decision. It can benefit teams by protecting valuable players, while giving players a high-value contract for the season. Understanding the different tag types helps explain many of the biggest decisions made during the NFL offseason. For more sports coverage and updates, visit Sports LNV, and explore resources such as Recovery Tips After a Match.