What Is the NFL Franchise Tag and How Does It Work?

NFL franchise tag: What you need to know originally appeared on NBC Sports Chicago

Franchise player -- it’s more than a buzzword.

Every season, coaches and commentators declare certain stars “franchise players,” often referring to key leaders who have demonstrated a vocal commitment to their team. There’s sometimes more to the story.

For three decades, NFL owners have reserved the right to claim one player as their own for a one-year, hefty contract through what is known as the franchise tag. It’s evolved and there are several different iterations, but it is typically reserved for special occasions with typically less than half of the league’s teams employing this trick. 

Here’s everything you need to know about the franchise tag, one of the more confusing and controversial elements of NFL free agency.

What is the NFL franchise tag?

The franchise tag is a designation that allows NFL teams to select one player set to be an unrestricted free agent and guarantees another year under contract if certain conditions are met. Each team receives one franchise tag per year and can be applied as either exclusive or non-exclusive.

• Exclusive: Teams must offer the selected player a one-year contract no less than either the average of the top-five salaries at that player’s position based on April of the current year or 120% of the player’s previous year’s salary, whichever is greater.
• Non-exclusive: Teams must offer the selected player a one-year contract no less than the average of the top-five cap hits of that player’s positions or 120% of the player’s previous year’s salary, whichever is greater.

How do exclusive and non-exclusive tags differ?

The two biggest differences between an exclusive and non-exclusive franchise tag is incorporation of salary versus cap hit and who holds negotiating power. A cap hit is similar to the salary, but it takes into account all expenses that go toward a team’s total salary cap, such as signing bonuses.

Additionally, each tag comes with different bargaining rights and guaranteed assets for both the player and team. Aptly named, an exclusive tag gives the team exclusive negotiating rights. Should the player reject the offer, they are unable to sign with another NFL team for that entire season. Meanwhile, non-exclusive tags allow players to negotiate with other teams. If they receive an offer, their current team has the opportunity to match. If they opt not to match the offer, they’re entitled to receive two first-round draft picks in exchange. 

What is the NFL transition tag?

Transition tags are similar to franchise tags with two exceptions. Rather than top-five, transition tags use the average of the top-10 highest players at a position and don’t provide any guaranteed compensation clause. 

Unlike the franchise tag, teams are given no promise of an asset at the end of the deal. If a team refuses to match a competing team’s offer, therefore losing the player, they do not receive any draft picks in exchange. 

What are the advantages and disadvantages of using a franchise or transition tag?

The jury remains out on the franchise tag.

There are obvious advantages for both sides: the teams and players. Teams get to retain a key player, one that likely might appear to be headed out, with relatively minimal negotiating while the players get a nice check to pad their pockets. 

However, it’s not as simple as dollar signs. The team holds the upper hand from a power perspective, ultimately dictating where they land within the league. This can occasionally lead to resentment and poor performance on the field, an issue common in the era of player empowerment. These dollar signs also chew into the hard salary cap, limiting the opportunities for executives to sign other role players. 

On the player side, athletes are prevented from signing long-term contracts and instead gambling on another year of free agency to follow. 

What is the free agency tag window?

Teams already have the green light to start tagging free agents. 

The tag window runs two weeks long, from Feb. 21 through March 7.

Other important dates regarding free agency are:

• Monday, March 13: Legal tampering period begins (preliminary conversations, with provisions, begin for unrestricted free agents) 
• Wednesday, March 15: Free agency period officially begins (all free agents -- restricted and unrestricted -- can engage in conversations with teams across the league, both directly and indirectly through a liaison)

Can a player be tagged two years in a row?

Tagging isn’t a one-and-done thing, however, consecutive tags come at a hefty price tag.

If a team applies the franchise tag to a player in back-to-back years, they’re agreeing to pay the athlete 120% of their salary the year before. A third consecutive tag runs at either 144% of the second-year tag salary, 120% of the average of the five highest salaries at their respective position or the average of the top-five salaries at the highest-paid position, whichever is higher. 

What are the current franchise tag figures per position in the upcoming free agency period?

Here are the NFL’s non-exclusive franchise tag values for 2023:

• Quarterback: $32,416,000
• Linebacker: $20,926,000
• Wide receiver: $19,743,000
• Defensive end: $19,727,000
• Defensive tackle: $18,937,000
• Offensive lineman: $18,244,000
• Cornerback: $18,140,000
• Safety: $14,460,000
• Tight end: $11,345,000
• Running back: $10,091,000
• Kicker/Punter: $5,393,000

Here are the NFL’s transition tag values for 2023:

• Quarterback: $29,504,000
• Linebacker: $17,478,000
• Wide receiver: $17,991,000
• Defensive end: $17,452,000
• Defensive tackle: $16,068,000
• Offensive lineman: $16,660,000
• Cornerback: $15,791,000
• Safety: $11,867,000
• Tight end: $9,716,000
• Running back: $8,429,000
• Kicker/Punter: $4,869,000

How long has the NFL franchise tag existed?

The NFL first introduced the franchise tag in 1993, through the league’s fourth ever Collective Bargaining Agreement (CBA). 

The 1993 strike largely centered around players’ protests of “Plan B,” a limited free agency, and ultimately ended with the creation of a salary cap and franchise tags. It was initially dubbed the “Elway rule” after Denver Broncos owner Pat Bowlen refused to accept the potential salary cap without a guarantee to retain his beloved quarterback, John Elway.

The franchise tag was originally designed to be used primarily on quarterbacks and viewed as a mutually beneficial transaction between owners and players providing a nice payday and some roster security. However, in the nearly 30 years since its inception, it’s taken a mind of its own, expanding to positions up and down the roster on both sides of the ball. 

That mutually beneficial relationship hasn’t held up, either, at least in the eyes of many players. Once referred to as the “prison tag,” many players and agents claim the provision unfairly limits athletes' ability to negotiate and control the narrative of their free agency.

Do any other leagues use free agency tags?

As of now, the NFL stands alone in its use of the franchise tag, but that’s not to say other leagues haven’t tried.

The NBA has its own version, known as the supermax contract, intended to encourage veteran players to stay with their existing franchise in an effort to even the playing field across cities. However, there’s no compulsory provision keeping them from leaving and there are far more requirements and disincentives to keep teams from offering supermax contracts. 

Similarly, every couple of years the NHL floats the idea of adding a franchise tag to its CBA, but no progress has been made on that front so far.