The NFL is the only major league that uses the franchise tag.
A franchise tag is a designation that allows NFL teams to retain the rights to a player set to become an unrestricted free agent, by offering them a one-year contract at a top-tier rate.
Used strategically, this tool gives franchises more control over key players. Especially when long-term deals can’t be reached before free agency.
There are three types of franchise tags:
- Exclusive Franchise Tag: Player cannot negotiate with other teams.
- Non-exclusive Franchise Tag: Player can negotiate with other teams, but current team has right to match or receive two first-round picks as compensation.
- Transition Tag: Pays the average of the top 10 salaries at the position and gives team right to match, but no draft compensation if they don’t.
The Franchise Tag Only Applies to the NFL
🏈NFL
The NFL is the only major league that uses the franchise tag.
Teams use it to
- Retain a top player without negotiating a long-term deal.
- Buy more time to finalize contract talks.
- Prevent a key player from hitting the open market.
Use Cases
- Often used on quarterbacks, pass rushers, and elite skill players.
- Creates leverage for teams but can cause friction with the player.
- Can lead to holdouts or unhappy locker rooms if a long-term deal isn’t reached. Recently seen with the Tee Higgins situation in Cincinnati.
Example
Lamar Jackson was franchise tagged by the Baltimore Ravens in 2023 with a non-exclusive tag, meaning he could negotiate elsewhere, but the Ravens could match.
That tag was worth $32.4 million for one year. Eventually, he signed a long-term deal worth $260 million.
The tag gave the Ravens control of the situation, even while risking backlash from the fanbase and “retaliation” from the athlete.
🎓NCAA /🥊Combat /
⚾MLB / 🏀NBA /
🏒NHL / ⚽Soccer
Franchise tags do not exist in college sports. However, NIL contracts can create short-term exclusivity deals with brands, which loosely mimic the concept by giving sponsors first rights to an athlete’s image or performance for a defined period.
Franchise tags also are not used in major pro sports leagues.
Other U.S. sports leagues rely on restricted free agency, arbitration, and qualifying offers to create team control mechanisms.
Soccer leagues handle player movement through transfer rights, designated players, salary budgets and discovery rights.
Individual sports don’t have league-driven contract structures or franchise systems.
Why the Franchise Tag Matters
The franchise tag is a team-first tool. It gives ownership leverage during contract disputes as well as allows teams to delay contract extensions, lock in a known player for one year and avoid a massive, multi-year financial commitment.
For players, It can be both a guaranteed payday and a frustration.
It’s a one-year deal with no long-term security. Any injury, off-field mistake or medical issues could cost them millions. Still, some use it to bet on themselves and turn a tag season into a massive payday.
From Bo Jackson to Kam Chancellor to Le’Veon Bell, some of the biggest names in NFL history have been involved in contract holdouts.
When a player feels that they are being underpaid for their production then the tag acts as a buffer for teams and players to negotiate their perceived value and find a center between both sides.
When an organization and a player cannot strike an agreement, then often times athletes in the NFL will test the open market in free agency.
