How the NFL Franchise Tag Process Works

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How the NFL Franchise Tag Process Works
USA Today

NFL free agency is a double-edged sword.

Sometimes, fans pray their teams lock down a rising superstar before he escapes to the open market. Other times, they light candles and cross their fingers that the dynamic player who'd fit a gaping hole in their lineup comes free.

Unlike other sports, this doesn't just come down to when a contract expires and if the two sides can agree to an extension. A team can designate a player to receive a franchise tag, and depending on which form of the tag is used, the player will be all but sure to remain with the team for the next year.

During the window where franchise tags can be applied—which opens on Monday, February 17 and closes Monday, March 3—it's gut-check time.

Whether you're a fan of the New Orleans Saints, desperate to keep the first-team All-Pro tight end Jimmy Graham in black and gold, or one of the 31 other teams who'd love to have Graham wear their colors, here's how the process works.

 

Tags in Three Flavors

Only one player per team, per season, can receive a franchise tag. In order to tag a player for the year, the team must tender a qualifying one-year contract offer. Based on the amount of the offer, the tag is either "exclusive," "non-exclusive" or a "transition" tag.

These qualifications changed with the last NFL collective bargaining agreement, so let's review them.

Phil Long/Associated Press/Associated Press
NFL commissioner Roger Goodell and NFLPA executive director DeMaurice Smith sign the current NFL CBA.

The "exclusive" franchise tag gives the offering team exclusive rights to the player. The player may sign his one-year franchise offer, at which point it becomes fully guaranteed (unless the player fails to stay physically fit). The player can also continue to negotiate a long-term deal with his current club until 4 p.m. ET on July 15; if they can't reach a long-term extension, the player plays under his franchise tag for the remainder of the year.

The exclusive tag amount is pretty simple to calculate. It's either an average of the five largest salaries at the offered players' position at the end of restricted free agency this season, or 120 percent of the offered player's current salary—whichever is greater.

The "non-exclusive" tag is just that; other teams can negotiate long-term contract offers with the player until July 15. If the player signs one of these offers, his original club can either match that offer, or allow the player to leave for his new club—and be compensated with two first-round draft picks from the new club.

The non-exclusive offer level is...well, it's complicated.

Mario Tama/Getty Images
The NFL salary cap is the perfect intersection of football and finance.

The NFL starts by calculating a "franchise tag" amount for each of the prior five years. The franchise tag amount is the average of the top five salaries at each position for each year. Then the NFL adds up the last five franchise tag amounts and divides them by the prior five total salary-cap amounts.

The NFL takes this rolling five-year average of how much of the salary cap that position's franchise tag takes up, then takes that percentage of this year's salary cap as the non-exclusive offer amount.

The "transition" tag is a little less expensive than the other two; it's calculated the same way as the non-exclusive tag, except it starts with the average of the top 10 salaries for each year instead of the top five. With the transition tag comes much less security, though.

The original club gets the right to match any offer sheet the player signs, but that's it—no compensation if it lets him leave. Since it's only a little more to upgrade to the non-exclusive franchise tag, the transition tag is very rarely used.

 

The Cost of Doing Business

Most teams will pursue the "non-exclusive" tag, as the calculated salary is lower than the exclusive tag, and the compensation of two first-round draft picks is tempting.

Per the Jacksonville Jaguars' official site, here are the 2014 non-exclusive franchise tag amounts:

Ty Schalter/Bleacher Report

These numbers are the cost of locking up franchise players for a year, or for as long as it takes to get a pre-July 15 extension hammered out (or ensure the team gets two first-rounders for letting the player walk).

As we can see, kickers and punters get signed to franchise deals because those contracts aren't worth much money. As funny as it is to consider a kicker or punter a "franchise player," those tags wouldn't get used if the players weren't worth the money.

On the other end, quarterbacks (of course) get paid far more than any other position.

It's easy to see why Graham disputes his designation as a tight end, though: The tight end tag is $4.83 million less than the wide receiver tag. Per the collective bargaining agreement, a player is whichever position he played the most snaps at in the prior year. Graham's flexible role pushes this definition.

"In our view he's a tight end," Saints general manager Mickey Loomis told Katherine Terrell of The Times-Picayune at the Senior Bowl. "That's what makes him valuable." That's exactly Graham's point: He's paid like a tight end, but produces like a receiver! That's the definition of value.

As Mike Florio of Pro Football Talk pointed out, this is going to be a big point of contention going forward, with modern offenses and defenses far more flexible and multiple than ever before.

Let's say, though, that Graham is tendered as a tight end, he signs the deal and plays all the way through it. Then what?

 

The Future

After a franchise-tagged player spends another season with his old team, everyone is right back at square one—except, not quite.

Tom Uhlman/Associated Press

For players coming off of a franchise tag, as Cincinnati Bengals defensive end Michael Johnson is, a second straight tag gets very unwieldy. By the rules above, it will have to be 120 percent of the prior season's tag amount. Depending on the position, this would be all but prohibitively expensive.

Should a player be tagged twice in a row, he's extremely unlikely to receive a third tag. The rules around a third tag are breathtaking: The offer number jumps up to the same as the quarterback tag number or 144 percent of the player's second tag offer, whichever is greater.

As the chart above shows, giving any non-quarterback elite quarterback money is a shocking prospect.

These rules were put in place after Hall of Fame nominee Walter Jones collected three straight franchise tag offers with the Seattle Seahawks in the mid-2000s. Jones would get the offer, wait until all minicamps and OTAs were over, then sign and report toward the end of training camp with a fully guaranteed salary.

Jones traded some long-term security for this, but he was paid very handsomely and got extended offseason vacations (while the Seahawks practiced in limbo, without their stud left tackle). The way the rules are now, it's impossible to see any player getting the same arrangement.

Ultimately, the franchise tag is a means to an end. For every player and team, the franchise tag could be a welcome, mutually beneficial way of keeping a player around, a bitterly regretted compromise that ensures acrimonious negotiations going forward or anywhere in between.

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