Free agency is an interesting concept: it’s a lot like periodical cicadas. Every few years, a different group of the relatively gigantic buggers suddenly fly out of their long-time homes and swarm to other locales. Just like the insects.
See what I did there?
I’m sure there’s a better analogy out there, but this edition of NFL 101 is only peripherally about free agency, so I’m not going to spend any more time trying to find it. Besides, the cicadas spend 13 or 17 years in one place, while NFL players spend one to five years, typically, under one contract. See? The analogy is falling apart the longer this goes on. So let’s get on with it.
On second thought, let’s go a little further with that analogy, over the line of believable and into the absurd for a moment. Let’s say a farmer knows when the cicadas on his property will emerge (because he’s waited a decade and a half with bated breath for this moment) and he finds the hole of the biggest, smartest, meanest bug of the bunch, and says, "I’m not letting you go, my vegetation-destroying friend." So, he marks that buzzer’s hole-in-the-ground of a home -- tags it, if you will -- and says he will only let him go if some other farmer gives him a whole lot in return. Perhaps, say, his number-one pick at the next two Periodical Cicada League Drafts.
I did warn you how stupid this analogy was going to get. Regardless, you’ve just learned part of the story of the NFL’s "Franchise Tag" concept. It's a concept largely unfamiliar to Steelers fans, because the team uses it about as often as the cicadas emerge. The last two examples? Jason Worilds and Jeff Reed.
There’s still a lot to cover, though, so we are going to (mercifully) abandon this analogy about three paragraphs later than we should have.
Since 1993, when the Franchise Tag concept was first put into practice, there have actually been two different versions of it: the "Exclusive" version, and the "Non-Exclusive" version. The differences lie in two main areas: how compensation of the tagged player is decided, and who can negotiate with the player.
Under the Exclusive tag, a player’s salary is determined by taking the greater of 1) the average of the five highest-value contracts at the player’s position for the current year as of a varying date in April, or 2) 120 percent of the player’s salary from the previous year. With this tag, the player is not allowed to negotiate with any other team. His only options are to play out the year under the tag, or negotiate a longer-term contract with the team. If you think this sounds like the league’s old Plan B Free Agency in a much smaller scale, you are exactly correct. If you've never heard of Plan B Free Agency, you haven't been paying attention in class.
For recipients of the Non-Exclusive tag, the compensation goes down while the level of freedom goes up. However, it’s "freedom" in the mildest sense. While the player is free to negotiate with another team, the team that placed the tag on the player has the right to match any offer made to the player. If the team accepts, the tag is removed and the player signs the contract as if he had negotiated it with the original team. The contract is basically copied from one club to the other, verbatim. That actually led to some shenanigans in past years, where teams would put "poison pills" in offer sheets to basically guarantee the tagging team would not match. The most famous of these was when the Vikings signed guard Steve Hutchinson from the Seahawks with a clause that said the entire contract would be guaranteed if he wasn’t the highest-paid lineman on the team. At the time, Walter Jones was making more than the Hutchinson contract was worth, which would have activated the poison pill the moment the Seahawks agreed to match.
The 2011 Collective Bargaining Agreement specifically forbade these clauses, and made franchise tags a lot less fun for the fans.
For the Non-Exclusive variety of the tag, the compensation calculation is a bit different. It’s defined as the average of the top five salaries at the player’s position for the last five years. For most positions, that’s a savings of $1 million or more for the team. It also makes it about $1 million cheaper for another team to sign the player to a long-term contract, which sounds like it really opens up options for the player to negotiate. And it does -- except for that pesky two-first-round-picks thing, which wasn't really just part of my flimsy opening analogy. If the tagging team chooses not to match the contract, it gets the signing team’s next two first-round picks as compensation. It’s kind of like saying, "sure, you can buy this car -- which I’ve abused for five years -- from the dealer, at a price I’m not willing to pay. You just need to give me your next two children to compensate for the loss of something I didn’t want that badly in the first place."
In other words, it’s a wink-and-nod to Plan B Free Agency.
There is one more tag: the "Transition" tag. This tag is basically a way to tell a player, "I think I want to keep you for at least another year, but I have no idea how much you are worth in the long term so I will let the rest of the league tell me, and then I will decide if I agree." It is the backhanded compliment of NFL contract clauses. It works like the Non-Exclusive Franchise Tag, except that it is calculated from the top ten salaries at the player’s position from the previous year, and the team has the right to match any offer while receiving no compensation if the player signs elsewhere. That last part is pretty much a preemptive way of saying, "eh, we never really liked you that much anyway."
One final note on all these tags: teams can only use one of the tags, on one player, each year. If that player plays the season under the terms of the tag rather than signing a contract -- matched or otherwise -- his salary is fully guaranteed.
Still confused? Don’t let it "bug" you.