February 16, 2015 - Joel Corry
Are players better off under the new franchise tag methodology?
NFL teams can retain the rights to one of its impending free agents with the use of a non-exclusive or an exclusive franchise tag during a two week window beginning on February 16. The designation period ends on March 2. The 2011 Collective Bargaining Agreement (CBA) changed how non-exclusive franchise tags are determined. Since its inception in 1993, a franchise tag number had been an average of the five largest salaries in the prior year at a player’s position or 120% of the prior year’s salary of the player, whichever was greater. For franchise tag purposes, salary means a player’s salary cap number, excluding workout bonuses. The 120 percent and five largest salaries provisions remain intact but the formula component is now calculated over a five year period that’s tied to a percentage of the overall salary cap. More specifically, the number for each position is determined by taking the sum of the non-exclusive franchise tags for the previous five seasons and dividing by the sum of the salary caps for the previous five seasons (an average of the 2009 and 2011 salary caps are used for the uncapped 2010 season in the calculations). The resulting percentage is then multiplied by the actual salary cap for the upcoming league year. This non-exclusive tag allows the player to negotiate with other NFL teams but if he signs an offer sheet with another club, his team has five days to match the offer. If the offer is not matched, his team will receive two first round picks as compensation from the signing team. Under the exclusive franchise tag, a player will receive a one year offer from his team that is the greater of the average of the top five salaries at his position once the restricted free agent signing period of the current year has ended (April 24 for 2015) or 120 percent of his prior year’s salary. A player cannot negotiate with other teams with the exclusive franchise tag. Teams also have the option to use a transition tag instead of a franchise tag. The transition tag operates similarly to the non-exclusive franchise tag, except it is based on the average of the top ten salaries at a player’s position. Teams have the same matching rights as with franchise tags but do not receive any draft choice compensation. The transition tag had essentially become obsolete. It made a comeback last year with the Cleveland Browns and Pittsburgh Steelers becoming the first teams to use it since 2008. It’s almost a certainty that Dallas Cowboys wide receiver Dez Bryant, Kansas City Chiefs linebacker Justin Houston and Denver Broncos wide receiver Demaryius Thomas will be franchised if they don’t sign new deals with their respective clubs before the end of the designation period. The Detroit Lions haven’t ruled out franchising defensive tackle Ndamukong Suh. His franchise tag number is $26.87 million, which is based off of 120 percent of his 2014 cap number. Since Suh’s number is same whether it’s the exclusive or non-exclusive version, the Lions would probably opt for the exclusive version to prevent him from negotiating with other teams. Green Bay Packers wide receiver Randall Cobb, Philadelphia Eagles wide receiver Jeremy Maclin, New England Patriots safety Devin McCourty and New York Giants defensive end Jason Pierre-Paul are other non-exclusive franchise tag possibilities. The franchise tenders can’t be finalized until the 2015 salary cap is set in late February or early March. NFL teams were informed at a league meeting on December 9 that the 2015 salary cap is preliminarily projected to be between $138.6 million and $141.8 million. The actual salary cap in 2014 was 5.3 percent higher than the preliminary projections this time last year. The expectation is for the salary cap to once again exceed initial projections. CBS Sports NFL Insider Jason LaCanfora was the first to report the expected salary cap percentages each franchise tag last October. I have independently verified that his figures are correct. The chart below contains the non-exclusive franchise numbers if the 2015 salary cap is $142 million and their percentage of cap. For comparison purposes, I have also included what the franchise tenders would have been for 2015 under the old method of calculation.
The NFLPA is gaining a small measure of vindication in 2015 for the criticism received for agreeing to change the calculation of the non-exclusive franchise designations. Franchise players are going to be better off with the new methodology than under old methodology for the first time since the change was implemented. The franchise tag numbers will be 3.67 percent higher collectively under the new formula with a $142 million 2015 salary cap.
A record twenty-one players were franchised in 2012, including six kickers and punters, in the first year of with the new method of calculation when there was almost a 20 percent drop in the franchise tags from 2011. The franchise numbers were approximately 18 percent higher collectively under the old formula in both 2012 and 2013. The difference dropped to 2.18 percent in 2014 because of the significant increase in the salary cap.
Defensive tackle, quarterback and wide receiver are the only positions that would be better off with the old method of calculation. The discrepancy in the defensive tackle number under the two methodologies is due to Suh and Gerald McCoy having the NFL’s largest cap numbers in 2014. McCoy’s cap number increased to over $21 million when he signed a six-year, $95.2 million contract extension (worth up to $98 million through incentives) last October to become the NFL’s highest paid interior defensive lineman.
There was greater year-to-year variance with franchise tag numbers with the system under the previous CBAs. For example, the wide receiver number would have gone from $11.826 million in 2013 to $9.731 million in 2014 to $14.147 million for 2015 with the old methodology. None of the franchise tags numbers at the eleven different positions have decreased in a year under the new method of calculation after the initial rollback in 2012.
The good thing for players is franchise tag numbers being higher under the new methodology than with the old methodology should continue as long as there is at least modest salary cap growth annually. Most players aren’t happy when given a franchise player designation because it hinders their ability to gain long term security. The tag is essentially a high salaried one-year “prove it” deal where players incur the risk of serious injury and poor performance again after already playing out their contracts. There may be fewer players dealing with franchise tags in the future because teams should become more judicious in using the designation as it gets more cost prohibitive.
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Joel Corry is a former sports agent who helped found Premier Sports & Entertainment, a sports management firm that represents professional athletes and coaches. Prior to his tenure at Premier, Joel worked for Management Plus Enterprises, which represented Shaquille O’Neal, Hakeem Olajuwon and Ronnie Lott.
|2015||2015||2015||Projected vs. Old|
|Position||Salary Cap %||Projected||Old Method||% Difference|
|Note: Projections assume 2015 salary cap is $142 million.|