The Ultimate Guide to NFL Franchise Tags: How They Work and Why They Matter

Russell S. BaxterContributor IFebruary 17, 2013

Perhaps during the next set of the NFL’s league meetings, the 32 owners could spend a little time on verbiage.

That’s because there’s just something about the term “franchise player” that’s deceiving.

When you hear those two words, you automatically think of the club’s best player. But while it could be, that’s not exactly the case when a player is given the franchise tag.

In its simplest form, the franchise tag is a stall tactic. It enables a team to buy another year to re-sign one of its best players who is due to become an unrestricted free agent.

For the team, it enables it to maintain negotiating rights to one of its prized employees and hopefully lock him up with a long, lucrative contract. For the players, it’s a designation that robs them of negotiating power in the open market.

Article 10 (Sections 1 and 2) of the league’s current CBA thoroughly explains the parameters in terms of franchise players. While Section 1 deals with franchise player designations, Section 2 focuses on the required tender for franchise players.

We’ll attempt to give you the CliffsNotes version here, with an assist from the good people in the NFL communications department.

The 32 NFL clubs could all begin designating unrestricted free agents on Monday, as all teams are allowed to assign the tag to one player. Teams have two weeks (until Mar. 4) to designate their 2013 franchise player.

There are two types of franchise tags: exclusive and non-exclusive. The former means the designated player cannot sign with another club.

The latter can be signed to an offer sheet by a team, and if the original club chooses not to match that offer, it receives a pair of first-round draft choices from the other team as compensation. (Note: The team must have first-round picks available in order to sign the player to such an offer sheet.)

What about the money? Well, the franchise tender is broken down in 11 categories depending on position. The largest one-year tender by position belongs to quarterbacks.

In late December,’s Ian Rapoport laid out the figures distributed at the owners meeting in Dallas, figures that he reports will be finalized next month.

So how do they arrive at those financial figures? We’ll quote (for the most part) NFL communications here:

"(An exclusive franchise player) is offered the greater of either the average of the top five salaries at the player's position for the current year at of the end of the restricted free agent signing period or the amount of the Required Tender for a non-exclusive franchise player.

"The non-exclusive franchise tender shall be a one-year NFL player contract for (A) the average of the five largest prior year salaries for players at the position, at which the franchise player participated in the most plays during the prior league year, which average shall be calculated by (the following three steps):

- Summing the amounts of the franchise tags for players at that position for the five preceding league years…

- Dividing the resulting amount by the sum of the salary caps for the five preceding league years…

- Multiplying the resulting percentage by the salary cap for the upcoming league year (the 'cap percentage average') or 120 percent of his prior year salary, whichever is greater."

Got all that?

But what about the designated player, and how does he stand to benefit from all of this? The one thing to keep in mind here with this process is that, above all else, it’s just business. That’s why quarterbacks over the years were rarely given the franchise tag.

In fact, there have been more placekickers/punters tagged than quarterbacks during the franchise era. Still, signing the franchise tender, a one-year contract, provides the player with a substantial raise.

In terms of how many times you can put the franchise tag on a player, there is apparently no limit. But it is not without an extremely hefty price, and that is why teams shy away from it.

For instance, and we'll use easily divisible numbers here, the franchise tender for a quarterback in 2013 is $20 million. If a quarterback is designated a franchise player a second straight year, the tender would increase to $24 million (or up 120 percent). And the ante would be raised even more if a team would entertain thoughts of franchising the same player a third straight year (highly unlikely), as laid out in Article 10, Section 2 (b) of the current Collective Bargaining Agreement:

Any Club that designates a player as a Franchise Player for the third time shall, on the date the third such designation is made, be deemed to have tendered the player a one-year NFL Player Contract for the greater of:

(A) the average of the five largest Prior Year Salaries for players at the position (within the categories set forth in Section 7(a) below) with the highest such average;

(B) 120% of the average of the five largest Prior Year Salaries for players at the position (within the categories set forth in Section 7(a) below) at which the player participated in the most plays during the prior League Year; or

(C) 144% of his Prior Year Salary. (By way of example, a kicker designated as a Franchise Player for the third time in the 2014 League Year would have a Required Tender equal to the greater of: (i) the average of the five largest 2013 Salaries for quarterbacks; (ii) 120% of the average of the five largest 2013 Salaries for kickers; or (iii) 144% of the player’s own 2013 Salary.)...

So why does this all matter, especially to the fans?

Being able to lock up one of your star players for a number of years is always beneficial. But even if a team is unable to come to a long-term deal, securing that player’s rights for at least one more season as opposed to watching him walk away without compensation is perhaps the next best thing…for now.

Speaking of that long-term deal, any team that gives a player the franchise tag has until July 15 to ink that player to a longer contract. After that, he can only sign his tender for that season. (Remember, a player can’t practice or play without being under contract.)

Once the regular season concludes, the two sides can go back to the bargaining table in terms of signing an extension.

There are two other aspects of the franchise designation that are worth mentioning.

First, there have been occasions in which teams have agreed to trade a player that’s been given the franchise tag, but the club looking to acquire the player was not willing or able to give up a pair of first-round picks. Players have agreed to a new deal with the acquiring team, signed the franchise tender and been dealt for different compensation.

Also, a team can opt to remove the franchise tag on a player. But that player automatically becomes an unrestricted free agent, with no compensation to the team.

So there you have it, as simply as we could spell it out. Fortunately, we won’t be giving a pop quiz or requiring anyone to write a term paper.

Then again, how about a game of tag?