Now more than three months since it was signed, we are still learning about the nuances of the new ten-year Collective Bargaining Agreement (CBA) between the NFL and the NFLPA.
Once the major issues of the revenue split, the rookie scale, and the Salary Cap were agreed to and a deal was imminent in late July, there appeared to be a rush to tie up loose ends of the deal so that training camps could open, players could be paid, and games could be played. The problem with the harried final negotiations was that there were several unsettled issues requiring resolution.
As I suspected, that last-minute horse-trading in those closing hours before Roger Goodell and DeMaurice Smith sat cheerfully in front of the Pro Football Hall of Fame and signed the new CBA left us with parts of the agreement we are still sifting through.
There was a plan to test its players for Human Growth Hormone (HGH), a breakthrough in insuring integrity and competitive balance in a way that other leagues could emulate. That testing required union consent that, to date, has not come.
There was also the issue of an independent appeals process for off-field conduct instead of appeals right back to the Commissioner. As we saw from the recent Cedric Benson case – also involving an apparent last-minute agreement for eight players to be punished for lockout misconduct – that issue appears unchanged.
Now we are learning about a different -- and more favorable for teams, less favorable for players -- way of arriving at Franchise Tag numbers for the next ten years.
ICONIf Forte is franchised, he will make $2 million less than the Tag number for 2011.
The Franchise Tag (Tag) designation has long been a source of dissatisfaction for elite NFL players. Although their one-year earnings were strong, they were unable to achieve the long-term financial security that all players covet.
The Tag designation not only continues, but now with a much more favorable twist for NFL teams. Under the previous CBA, the nonexclusive Tag – the vast majority are nonexclusive – was calculated by taking the average of the top five salaries for the previous year for the position. And due to the transitional rules this season, Tags in 2011 were based upon this old calculation. However, beginning in 2012, Tag calculations are changed dramatically.
The new and complicated formula for the nonexclusive Franchise Tag is described in Article 10 of the new CBA as follows:
(A) Average of the 5 largest Prior Year Salaries for players at the position, calculated by: (1) summing the amounts of the Franchise Tags for players at that position for the 5 preceding League Years; (2) dividing the resulting amount by the sum of the Salary Caps for the 5 preceding League Years (using the average of the amounts of the 2009 + 2011 Salary Caps as Salary Cap amount for 2010 League Year); and (3) multiplying the resulting percentage by the Salary Cap for the upcoming League Year (e.g., when calculating the Tender for the 2012 League Year, dividing the aggregate sum of the Franchise Tags for players at that position for the 2007-2011 League Years by the aggregate sum of the Salary Cap for the 2012 League Year); or (B) 120% of Prior Year Salary, whichever is greater.
Here is a translation: the calculation for the Tag is now no longer based on the average of the top five salaries for a player’s position for the preceding year, but the average of the top five salaries at a player’s position for the preceding FIVE years! Thus, for 2012, Franchise Tag calculations compute from the top five salaries at each position – not from 2011 – but from an average of the top five salaries at each position for 2007, 2008, 2009, 2010 and 2011.
The new formula will likely result in significantly lower Tag numbers for each position than before. For example, the Tag number for the highest-paid position, quarterback, was approximately $16 million in 2011. With the new calculations, the projected Tag number for quarterack in 2012 is $2 million less, or $14 million. That is not good news for Drew Brees in his heated negotiations with the Saints.
For running backs -- pay attention, Matt Forte and Ray Rice -- the 2011 Tag number of $9.5 million is projected to be reduced to a 2012 number of $7.7 million with a flat Cap and $8 million with a $125 million Cap.
For wide receivers -- pay attention, DeSean Jackson -- the 2011 Tag number of $11.4 million is projected to be reduced to a 2012 number of $9.4 million with a flat Cap and $9.8 million with a $125 million Cap.
And for tight ends -- pay attention, Jermichael Finley -- the 2011 Tag number of $7.3 million is projected to be reduced to a 2012 number of $5.4 million with a flat Cap and $5.6 million with a $125 million Cap.
Of course, as noted in (B) above, if a player is coming off a season as a Tag player or had a very high salary number in his previous year, he is still protected, as the Tag will be 120% of his previous year’s number. And, although if a player is tagged three consecutive seasons he must have the highest Tag number available, there is no limitation on the number of consecutive uses of the Franchise Tag on the same player.
Advantage to Teams
The effect of this new provision, which was strongly pushed by the NFL in its negotiations with the NFLPA, is to create a couple of advantages for NFL teams: (1) the Tag numbers will be lower, pulling from a more dated pool of numbers, and (2) teams can now use the Tag designation as a greater leverage point in negotiations that is stronger than it was previously.
For players such as Brees, Forte, Rice, Jackson, Finley and others, the Franchise Tag discussion has become more uncomfortable than it would have been in previous years. That is unfortunate for them and for dozens of players ahead in the next decade.
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