Understanding the NFL's Franchise Tag

Each NFL team has one franchise tag they can apply to any player who is designated to be an unrestricted free agent in the current off-season. The team is only given one franchise tag or transition tag, so only one player can be prevented from leaving via unrestricted free agency each off-season. The franchise tag allows the team to retain the player's contract rights for the upcoming season, but at a very stiff price.

Understanding the NFL's franchise tag: Its purpose

The franchise tag was originally designed to prevent the team from losing its most important player in a bidding war, but it has evolved into yet another tool general managers can use to creatively work out their contract situations. It has become especially appealing to GMs in the case of talented, but inconsistent or injury-prone players. The team can sign the player to a 1-year franchise tag and re-evaluate their performance again at the end of the season. If he played well and stayed healthy, the team can then sign him to a long-term contract. If there are still questions, the team may choose to let the player go or give him another year to prove himself under the franchise tag.

Understanding the NFL's franchise tag: Salary calculation

The salary level is set as the higher of either 120% of the player's prior year salary or the average of the top five salaries at the same position. If he has been given the franchise tag three years in a row, the salary levels are based on the quarterback position. The entire one-year contract amount is guaranteed as soon as the player signs the franchise tag, even if the player is injured before the next season even starts. If the team changes its mind and revokes the franchise tag offer before it is signed, the player will become an unrestricted free agent at the start of the free agency period.

Understanding the NFL's franchise tag: Types of tags

There are two different types of the NFL franchise tag. The exclusive rights franchise tag prevents a player from negotiating with any other teams and binds him to the aforementioned one-year guaranteed contract at the proscribed salary level. A non-exclusive franchise tag allows the player to negotiate with other teams and sign an offer sheet. His original team then has the option of matching that offer sheet or letting the player sign with the other team and receiving compensation in the form of two first-round draft picks.