Often at this time of the year, media pundits and football analysts will throw around complex sounding football terms - leaving the average football fan clueless towards their true meaning. Whether its free agency, the combine, the draft, or whatever it may be - it's important to know the terms we're working with. Let's focus on two: the exclusive franchise tag, the non-exclusive franchise tag, and the transition tag. Each team is allowed to use only one of the three tag options per year.
A franchise tag, established by the CBA, allows teams to offer one unrestricted free agent on their roster a one-year contract. The franchise tag is often used when contractual talks break down and the two parties aren't coming close in negotiations. However, there are two distinct types of franchise tags: exclusive and non-exclusive.
The salary of a player on an exclusive tag is determined by the average of the top five cap hits at the player's position - or 120% of the previous year's salary (whichever is more). Additionally, an exclusive franchise tag restricts players from negotiating with other teams. Only the team that applied the tag can negotiate with the player. When the player signs the tag, his franchise tag salary becomes fully guaranteed. However, Article 10, Section 2 of the CBA indicates that if a player fails to maintain peak physical condition, his tag salary can be terminated. Ultimately, the exclusive franchise tag is a powerful bargaining tool given to teams in negotiations. Players want certainty in a long-term contract and there is always that potential for a career ending injury.
The salary of a player on a non-exclusive tag is determined by the average of the top five salaries (different than cap hits) at the player's position - or 120% of the previous year's salary (whichever is more). This salary is also fully guaranteed upon signing. However, the rules are slightly different for the non-exclusive tag. With a non-exclusive tag, players are given the ability to negotiate with other teams. The original team can match any offer, but if they don't and the player signs to another team - the original team is entitled to 2 first round picks as compensation from the new team the player signed with. The difference in franchise tags is essentially the restriction on access to free agency.
Finally, the salary of a player on the transition tag is determined by the average salary of the top ten players at his position - or a 20% salary increase from the previous year (whichever is more). Once again, the salary of the transition tag is fully guaranteed upon the player signing the tag. The player has the right to negotiate with other teams - and the home team has seven days to match any offer by an opposing team. If the original team does not match the offer, the player is signed to the opposing team and the original team is owed zero compensation.
Recently, the numbers were released for the tags - courtesy of ESPN.