It's widely expected that the Broncos will use their franchise tag on All-Pro left tackle Ryan Clady this offseason. But what exactly does that mean?
Let's go over the details, including the most basic:
What is a franchise tag?
A franchise tag is a restricted tender used by teams to retain their most important unrestricted free agents. Franchise tags can also be used on players who are already deemed restricted free agents, but this doesn't generally happen, as it's not cost-effective.
Aren't there two types of franchise tags?
Yes, there's a non-exclusive tag, and an exclusive one.
Under a non-exclusive tag, the tender is equal to the percentage of the cap consumed by the tag at his position for the prior five seasons (2008-2012, in this case), or 120% of his prior year's contract, whichever is greater. The player is free to negotiate with other teams, but the original team would be given a chance to match any contract and thus retain the player.
With an exclusive tag, the player is tendered a one-year contract equal to the average of the top five player salaries at his position for that same season (2013, in this case), or the value calculated above for the non-exclusive tender, or 120% of his prior year's contract, whichever of the three is greater. As the name suggests, a player given an exclusive tag cannot negotiate with other teams.
What if the original team doesn't match?
Should the original team elect not to match, the new team is required to send two first-round draft picks to the original team as compensation.
How much is the tender worth in Clady's case?
Franchise tenders differ in value by position; for offensive linemen, the figure has been tentatively set at $9.66M and will likely be finalized sometime in March.
When can the tender be applied?
Teams may apply their tags for a two-week period beginning this coming Monday, February 18, and ending at 4pm ET on Monday, March 4.
Would Clady be required to sign the tender?
No, but once he does, it becomes fully guaranteed.
Can the Broncos change their mind?
A franchise or transition tender may be withdrawn prior to the player signing it, but once withdrawn, the player immediately becomes an unrestricted free agent who can negotiate with any team, and cannot be re-tagged.
If Denver uses its franchise tag on Clady, can they still negotiate a long-term deal?
Absolutely, and they would have until 4pm ET on Monday, July 15 to do so. If they're unable to agree, Clady, provided he signs the tender, would play under that one-year contract, but the two sides would not be able to negotiate a long-term deal until after the regular season finale.
What if Clady doesn't sign the tender?
If he does not sign the tender by the Tuesday following Denver's Week 10 game, he would be deemed ineligible to play for the rest of the season, and the Broncos would be able to tag him again for 2014.
What about poison pills?
Signing teams will often try to structure deals such that the original team is unable to match, whether due to cash or cap considerations. However, this is restricted to financial terms - if a new team were to offer a tagged player a deal that includes a stipulation that they cannot again be tagged, the original team would not be required to match that facet of the deal.
Isn't there such a thing as a transition tag?
There is, but it's hardly ever used anymore.
A transition tender is benchmarked at the average of the top ten salaries for the player's position from the prior year, or at 120% of the player's prior year salary, whichever is greater.
As with franchise tenders, the original team is provided an opportunity to match any deal, but there is no draft-pick compensation should they elect to let the player walk.
The window for a transition player to sign with a new team extends one week beyond the long-term deadline for franchise players - Monday, July 22.
Updated calculation method for non-exclusive tender value - 6:48am ET 3/1/13