What is the NFL's franchise tag?

Teams have the right to apply a franchise tag or transition tag to 1 player

The NFL’s franchise tag is a valuable tool to front offices that face the prospect of losing star players to unrestricted free agency.

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Each offseason, the league’s 32 teams have the right to apply either a franchise tag or the transition tag to one player. If the franchise tag is enacted, the transition tag cannot be used.

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The franchise tag functions as a one-year contract extension and has two versions – exclusive and nonexclusive.

Under a nonexclusive tag, player pay is determined by the average of the top five salaries at the player’s position over the previous five years, or 120 percent of the player’s previous salary, whichever is higher. Teams have the right to match any offer made to the player by other franchises and can receive two first-round picks as compensation if the player signs elsewhere.

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Under an exclusive tag, players can’t negotiate with any other team. Pay is determined as an average of the top five salaries in the current season, which generally costs more than the nonexclusive tag.

The transition tag functions in a similar manner to the franchise tag. Players who receive the transition tag are paid based on the average of the top 10 salaries at their position over the last five years. In addition, the team has the right to match any offer the player receives from any other franchise.

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Dallas Cowboys quarterback Dak Prescott signed an exclusive franchise tag this offseason after talks on a long-term extension failed to yield an agreement. Prescott will receive $31.4 million for the 2020 season.

Teams and players who receive the franchise or transition tag can continue to work on a long-term contract extension. The deadline to finalize an agreement is July 15. Otherwise, the tag remains in place for the season.

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