The NFL Franchise Tag is one of the most strategic, and sometimes controversial tools a team can use in player contract negotiations.
Beyond the headlines and the drama, what does the franchise tag really mean financially for both the player and the team?
It’s not just about securing a player for another year; it’s about understanding the financial intricacies and implications that come with the tag.
In this article, we’ll break down how the NFL franchise tag truly works, examining the numbers behind it, and how it affects both players and franchises.
What is the NFL Franchise Tag?
The franchise tag allows NFL teams to keep a player on their roster for one more season without committing to a long-term contract or extension.
The tag ensures the player is paid a high, guaranteed salary based on the average of the top five salaries at their position.
While it sounds straightforward, the franchise tag comes with complex rules and significant financial implications for both sides.
There are three types of franchise tags:
- Exclusive Franchise Tag: This is the most expensive option. The player is paid the average of the top 5 highest-paid players at their position, and they cannot negotiate with other teams.
- Non-Exclusive Franchise Tag: The player is paid the same amount, but they are allowed to negotiate with other teams. If another team offers the player a contract, the original team can match the offer or receive two first-round picks as compensation.
- Transition Tag: A less common tag, the transition tag offers a player the average of the top 10 salaries at their position. The player can negotiate with other teams, but the original team has the first right to match any offer.
How the Franchise Tag Salary Is Calculated
To understand the financial side of the franchise tag, we need to look at how salary is determined.
Each year, the NFL salary cap changes, which directly impacts how much a player on the franchise tag will earn.
Here’s the breakdown:
- Top 5 Average: The player’s salary is based on the average of the top five salaries for their position from the prior year. This is calculated by averaging the salaries of the top five highest-paid players at the position. (excluding any restructuring that may have occurred in contracts during the previous season).
- Cap Percentage: The salary for a player on the franchise tag is a significant portion of the team’s salary cap. In 2025 for instance, the exclusive franchise tag for a quarterback could exceed $40 million, depending on the salary cap for the year, while other positions like running backs or wide receivers may see tag values around $10 million or $20 million.
- Position-Specific Salary Numbers: The salary varies drastically by position. Here are some examples of how much players on the franchise tag might earn in 2025:
- Quarterback: Estimated $40+ million (exclusive tag)
- Wide Receiver: Estimated $20+ million
- Running Back: Estimated $10+ million
- Defensive End: Estimated $20+ million
- Linebacker: Estimated $15+ million
Franchise Tag Impact On Salary Cap?
Using the franchise tag impacts a team’s salary cap in several ways:
- Cap Hit: When a player is tagged, the salary they receive counts toward the team’s salary cap. The team must have enough cap space to accommodate the player’s franchise tag salary for the upcoming season. Teams often have to restructure other contracts or release players to make room for the tagged player’s salary.
- Long-Term Implications: While the franchise tag allows teams to keep a player on a short-term basis, it doesn’t offer long-term cap flexibility. After tagging a player multiple times, teams can find themselves paying significantly more than they would if they had locked the player into a long-term contract.
- Impact on Other Signings: The financial commitment to a player on the franchise tag can affect the team’s ability to sign other free agents, extend existing contracts, or improve their roster in other areas. Teams with multiple franchise tags can find themselves in a tight salary cap situation, limiting their ability to make other moves.
The Player’s Perspective
For players, the franchise tag is a double-edged sword.
On one hand, it guarantees a high salary for the year, but on the other hand, it limits a player’s ability to secure a long-term deal and provides little job security.
Pros
- Guaranteed Money: The tag offers players a one-year guaranteed salary that is typically higher than what they would make in a typical contract year.
- Short-Term Security: Players who are tagged know they will play for at least one more year at a high salary.
- Opportunity to Prove Value: The franchise tag can give players a chance to prove themselves in the final year of their deal, which could lead to a long-term contract the following year.
Cons
- No Long-Term Security: While the salary is high, the lack of a long-term contract can be a significant downside, especially for players who are prone to injury.
- Increased Pressure: The franchise tag often means a player will be under intense scrutiny, as their performance will determine whether they get a long-term contract in the future.
- Limited Control: A player on the tag has little leverage. They can’t negotiate with other teams (if tagged exclusively), and their options for signing a long-term deal with the team are limited.
The Franchise Tag & Contract Negotiations
Teams often use the franchise tag as a negotiating tactic to either lock in a player for another year or to buy time before reaching a long-term agreement.
For players, getting tagged can sometimes lead to a long-term deal, but the process can also be frustrating, as the franchise tag often creates a disconnect between the player and the team.
- Holdouts: Some players who are tagged decide to hold out from training camp or even regular-season games in an attempt to force the team to offer a long-term contract. However, holdouts are risky, as they can cost the player a significant amount of money in fines and missed game checks.
- Negotiation Leverage: The longer a player is on the franchise tag, the more leverage they have in contract negotiations. Teams are aware of this, which is why a player’s representatives often push for a long-term contract before the tag can be used again.
Franchise Tag Impact on Star NFL Players
Several high-profile players have been affected by the franchise tag over the years. Some notable examples include:
- Dak Prescott: In 2020, Prescott was tagged twice by the Dallas Cowboys, ultimately leading to a long-term contract after the 2020 season. His saga with the franchise tag led to a $31 million salary in 2020, and then he received a $160 million contract after his second tag.
- Kirk Cousins: Cousins was tagged twice by Washington, earning over $44 million before signing a fully guaranteed deal with the Minnesota Vikings in 2018, the first fully guaranteed contract of its kind for a QB.
- Le’Veon Bell: In 2018, Bell was tagged by the Pittsburgh Steelers, but he chose to sit out the season, costing him $14.5 million. He eventually signed with the New York Jets but never reached the same level of success he had prior to the tag.
Why The Franchise Tag Matters
The NFL franchise tag is a powerful tool for teams, offering a temporary solution to keeping key players while buying time for long-term negotiations.
However, for players, it’s a financial balancing act that offers guaranteed money but can limit future earning potential and security.
For both sides, understanding the true financials of the franchise tag is essential for making informed decisions and crafting effective contract strategies.
Next Reads
- How NFL Signing Bonuses are Structured
- 5 NFL Signing Bonuses That Changed the Market
- 5 Worst NFL Free-Agency Contract Busts
- NFLPA Boss Resigns After Misusing Union Funds
- Tyrann Mathieu’s NFL Career Earnings & Financial Legacy
Credits
Written by: Aidan Anderson
Research and Analysis: Apostle Sports Media LLC
Sources: NFLPA, OverTheCap, NFL.com, ESPN, Pro Football Talk, APSM Proprietary Analysis.
Featured Image: Public Domain / Wiki Commons
Disclaimer: This article contains general financial information for educational purposes and does not constitute as professional advice.
“Finally, all of you, be like minded, be sympathetic, love one another, be compassionate and humble.”
– 1 Peter 3:8
Apostle Sports Media 