Franchise Tags and Transition Tags in the NFL

Your favorite player is a free agent – now what?

As much as fans may hate to acknowledge it at times, football – like all sports at the national level – is a business. Player personnel decisions are made with a bottom dollar line in mind, not how much management, ownership and fans like the guy. A favorite player may head off to a different team simply because his current team isn't willing to pay him what he thinks he's worth. Just like that, a major talent might be gone.

The National Football League has rules in place to deal with this kind of situation. The rules fall under the umbrella of the term "NFL franchise tag." But even tagging a player isn't always a guarantee that he'll stay. 

What Is a Franchise Tag?

NFL players are signed to contracts. A player's contract might be for one year or for multiple years. When the contract expires, one of three things can happen. He can sign a new contract with his existing team, he can become a "free agent," or his current team might put a tag on him. If he becomes a free agent, he can sign with whatever club offers him the best, most lucrative deal – but it occasionally happens that a free agent might not be picked up by another team at all. 

Of course, signing with a new club can leave his old team empty-handed. They've invested time and money in this guy and – poof! – he's gone. But maybe he was demanding an exorbitant amount of money to stay, a number that just didn't fit within the team's bottom dollar line.

This is where the franchise tag comes in. Teams must tag free agents by March 1. This effectively stalls the situation for a while so the two sides can try to come to terms and hammer out a new contract. Tagging a player locks him in under a one-year contract unless a new contract is achieved before July 15.

NFL teams are allowed to designate one franchise player or one transition player in any given year.

Exclusive Franchise Tags  

Those are the basic rules. Now it gets a bit more complicated. Tags are either "exclusive" or "non-exclusive." 

An "exclusive" franchise player is not free to sign with another team. His club must pay him either the average of the top five NFL salaries for the position he plays – which can be a lot – or 120 percent of his previous year's salary, whichever is greater. Teams usually want to negotiate a longer term deal by July 15 that will pay less. If a new contract isn't agreed upon by the July 15 deadline, the tagged player becomes a free agent the following year when the exclusive tag expires. 

Non-exclusive Franchise Tags

A “non-exclusive” franchise player is permitted to negotiate with other teams while he's trying to reach an agreement with his old team. His old club has the right to match any new team's offer, or it can let him go and receive two first-round draft choices for the player instead as compensation. 

Transition Tags

A transition player designation gives the free agent's team the right of first refusal. If the player receives an offer from another club, his initial team has seven days after his contract expires to match it and the player stays.

If the team doesn't match the offer, the player moves on and the team receives no compensation at all. 

It costs less to retain a transition player. The one-year contract is based on the average of the top 10 salaries for the position he plays instead of five, or 120 percent of the player's previous year's salary, whichever is greater.