NFL teams have until Tuesday afternoon 4:00 PM EST to apply their franchise tag. Franchise tags are a common subject during this time of year but what exactly is it?
Introduced in 1993, the franchise tag is applied to players who are scheduled to become free agents. It links a player to the team that applied the tag if a certain set of conditions are met.
There are two different types of franchise tags: exclusive and non-exclusive.
A player with an exclusive franchise tag must be offered a one-year contract for an amount that is no less than the average of the top five salaries at the player’s position or 120 percent of the player’s salary, whichever is greater. Players with exclusive franchise tags are not permitted to negotiate with other teams. The team that applied the franchise tag has all negotiation rights with the tagged player.
Teams can negotiate with players with exclusive franchise tags until July 15, 4:00 PM EDT. If agreement on a long-term extension cannot reached, the player will play the remainder of the league year under the franchise tag.
A player with a non-exclusive franchise tag must be offered a one-year contract for an amount no less than the average of the top five cap hits (salary plus bonuses due during the league year) at the player’s position or 120 percent of the player’s salary, whichever is greater.
Players with non-exclusive franchise tags are permitted to negotiate with other teams. If the player signs an offer sheet from another team, the team that originally applied the non-exclusive franchise tag has the right to match the term of the offer. If the team loses the player (by not matching the offer), they are entitled to receive two first-round draft picks as compensation.
NFL teams can also apply transition tags to players.
The transition tag is a less expensive option for retaining free agents than either franchise tag. Players with transition tags must be offered a one-year contract for an amount no less than the average of the top 10 salaries at the player’s position or 120 percent of the player’s salary, whichever is greater.
If another club offers a contract to a player with a transition tag, the original club has seven days to decide whether they will match the offer or not. If the original club agrees to match the terms of the new offer, the player has to sign with the original club under the terms of the new offer.
If the original team declines to match, the player signs with the other team. The original team is offered no compensation like they would under the franchise tag. The contracts of players with transition tags did not become guaranteed until 2007. Transition tags can be rescinded, although any team that rescinds a transition tag cannot use it again until the next season.
Transition tags are rarely used. The one-year transition tag deal is typically an expensive one. This could cause difficulties in keeping NFL franchises under the salary caps. Players don’t like the transition tag (and the exclusive franchise tag to a degree) because it severely hampers their ability to negotiate with other teams.