The New Franchise Tag Rules and Projections
The Franchise Tag has always been one of the more unique mechanisms in the NFL. It allows a team to essentially maintain negotiating rights with a player whose contract has run out with the threat of paying a one year fully guaranteed salary rather than commit to two or three years of payments. The players only leverage was that the 1 year tag price was high and rising so fast that a team could not necessarily absorb the 1 year cap charge associated with the franchise tag.
Since2007 the tag was used a total of 54 times, 8 of which were on a punter or kicker, the lowest priced position on the team. The majority of the tags were used on linebackers and defensive tackles, which were middle of the rung prices for somewhat impact positions. They received 18 tags combined. The highest average priced tags- QB, DE, CB, OL and WR- only received a total of 19 tags. These positions in particular were protected by higher prices of the tag. Of the 6 defensive ends receiving a tag, 4 were tagged before 2008. Teams were being scared away of the high price tags for DE's, which grew 43% from 2007 to 2010 as it became a premier pay position.
Under the old franchise tag system the tag value was computed by taking the five largest salary cap players of the prior year, with a few reductions for performance bonuses, at a position and averaging it out to come up with the franchise tag figure. The 2011 figures are skewed for many positions because of some funky salary cap accounting that went on in 2010. Under that system lets look at the percentage of growth of the tag value from 2007 thru 2010 and compare that to the growth in the cap. Please note that for the growth as a percentage of the cap I estimated the salary cap to grow from 2009 to 2010 at the average rate the cap grew from 2007 through 2009, making the 2010 projected cap a value of $130.9 million.
|Percent Growth 2007-2010||Percent Growth as Percentage of Cap|
As you can see from the chart almost every single position grew at a faster rate than the salary cap. Why is this important? Under the new rules the franchise tag will be calculated as an average of the five previous years as a percentage of the cap rather than the 5 highest salaries. For example the way the new rules work the franchise tag will be calculated by adding up every franchise tag from 2007 thru 2011, dividing it by the sum of the unadjusted salary cap from 2007 thru 2011 and taking the resulting percentage and multiplying it by the unadjusted salary cap of the current league year. This is going to prove a major winner for the owners in negotiations as they are limiting the growth in the franchise tag to the growth of the cap rather than allowing it to exceed the inflation of the salary cap. We can already estimate the new percentages and then take a few stabs at what the franchise tag figures will be in 2012. Please note that these values are calculated under the assumption that 2009's salary cap number used in the calculation will not include the CAM adjustments that could slightly change the figures.
|2012 Franchise Tag Percentage||Current Value||Projected Value 122M Cap||Projected Value 125M Cap||Projected Value 128M Cap|
As you can see under almost any scenario the tag value is going to fall greatly in 2012. Unless the cap grows at the same rate as it did under the last CBA, the franchise tags will or less fall down to the 2009 levels, setting the players back 3 years. Its not necessarily terrible for each position in the short term. For example under the old system the current calculation for an NFL QB in 2012 would have been just under $15 million, which could be reached next season as would the corner value that is just under $11 million, but it is the long term issue that is a problem for the players. As a percentage of the cap the figure will be around the 2009 and 2010 percentages regardless of what the cap is. Over time the situation gets worse for some of the higher priced positions. Assuming the same growth as under the previous CBA, around 6.4%, we can project the tag values out. Since we have the growth over the 2007-2010 seasons calculated, lets look at 2011-2014 and see the projected growth, projected values, and where the salaries would have been if the same growth rates continued.
|Percent of Cap (Based on Max 6.44% Cap Growth)||2014 Projected Value (Based on Max 6.44% Cap Growth||2014 Projected Value (Based on 07-10 Growth)|
So for most positions this got the owners exactly what they wanted which is control over costs and more importantly control over the players. There is almost no possibility that the franchise tag can grow as quickly as it did under the old system which at least gave the players some leverage in negotiations. Over time we are probably going to see a scenario where more teams start using the tag on the positions that they were hesitant to in the past because of the price associated with it. Another new and interesting aspect to offseason planning in the NFL.