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What’s the difference between Exclusive & Non-Exclusive Franchise Tags?

Posted By Brian McFarland On February 13, 2013 @ 12:16 pm In Blog View,Featured,Salary Cap Analysis | 5 Comments

This week has been consumed by the question of whether the Ravens will be able to re-sign QB Joe Flacco to a long-term contract or whether they will be forced to use the Franchise Tag to retain their rights over him.  It’s likely a discussion that will continue for several more weeks as well.  If Flacco doesn’t receive a long-term deal over the next couple of week, the discussion then will turn to which Franchise Tag the team should use – the “non-exclusive” Tag or the “exclusive” Tag.

It appears that there is no shortage of opinions from the media – some informed opinions, others not so much – about which direction the Ravens should – and will – go.

One of the complicating factors in the discussion is just what is the difference between the “non-exclusive” and the “exclusive” Tags?

THE BACKGROUND:  For a two-week period beginning next Monday, February 18th, and ending on March 4th, the Ravens will have the option of designating Flacco with the Franchise Tag.  Using the Franchise Tag will, at the very least, allow the Ravens to match any offer sheet that Flacco may sign with another team or receive two first round draft picks if they choose not to match the offer sheet.

Clearly, if they haven’t agreed to a long-term contract by March 4th, the team will use its Franchise Tag on Flacco.  That much is clear.

What isn’t clear is – which version of the tag will the Ravens use?

And, that’s where it becomes a whole lot more confusing.

NON-EXCLUSIVE FRANCHISE TAG:  The non-exclusive Franchise Tag is the Tag that is used most often.  It does not preclude the player from negotiating with other teams, but does allow the player’s present team to match any offer sheet or receive two first round draft picks if they decline to match.

The non-exclusive Tag is a one-year contract that is the average of the top five players at the position over the prior five years.  For 2013, the non-exclusive Tag for Quarterbacks has tentatively been set at $14.6M.

While the non-exclusive Tag is certainly more risky in most circumstances, other teams have rarely bothered signing franchised players to offer sheets.  Often, this is simply because either the player doesn’t want to pursue an offer sheet or because other teams simply aren’t interested in spending a lot of time hammering out a contract that likely will be matched by the player’s present team anyway.

Only once in NFL history has a franchised player actually changed teams – in 1998, the Panthers signed DT Sean Gilbert to an offer sheet that the Redskins declined to match.

The other main reason for the lack of offer sheets is the amount of compensation and money involved – (1) most teams don’t want to part with two 1st round picks and (2) if giving up two 1st round picks isn’t bad enough, it’s going to take a huge contract to dissuade the other team from matching the offer sheet.  Simply put, teams are willing to sign free agents to huge contracts and teams are willing to use draft picks to acquire players, but teams are rarely interested in doing both to acquire a player.

EXCLUSIVE FRANCHISE TAG:  The Ravens’ other option is to use the exclusive Tag on Flacco.  The exclusive Franchise Tag precludes any negotiations between Flacco and other teams, so this version of the Tag would ensure that the Ravens couldn’t lose Flacco.  While this is obviously a safer course, the trade-off from that protection is a much higher Franchise tender amount.

The exclusive tag is a one-year contract that is the average of the top five QB salaries for this year, at the end of the RFA signing period (which is usually five days before the NFL draft, so this year, April 19th).  At this point, the exclusive Franchise Tag is expected to be over $20M.  With a very tight Cap already, that is going to be a tall assignment for the Ravens and may force the team to release several players they would otherwise prefer to keep.

However, with rumors already circulating of possible interest from other teams, it would seem that the Ravens would be wise to use the exclusive Tag in order to assure the return of their franchise QB.

There are, however, two factors that make the use of the exclusive Tag a bit more palatable.  First, with several other teams facing Salary Cap problems of their own, it’s very possible that several of the quarterbacks that are presently in the top 5 salaries may end up restructuring their deals.  Tom Brady (highest), Matthew Stafford (2nd) and Ben Roethlisberger (5th) all are candidates to restructure and those restructures would remove them from the top 5 highest salaries, thereby lessening the cost of the exclusive Tag.  But, even this bit of good news is tempered by the fact that for the restructure to count, it must occur prior to March 4th, the deadline for applying the Franchise Tag.

So, it remains to be seen whether any of those players will have restructured by then, but if any of them do, it will give the Ravens a little bit of help.

More importantly, the second factor that somewhat minimizes the use of the exclusive Tag is that since the amount of the exclusive Tag isn’t determined until April 19th, the league’s CBA dictates that Flacco’s initial Franchise tender will actually be the same amount as the non-exclusive tender – $14.6M.  So, the team could designate Flacco with the exclusive tender by March 4th, but would only have Flacco counting as $14.6M toward the Cap until April 19th.  So, it wouldn’t be until April 19th that they would finally need to create the additional $5-6M in Cap space to accommodate the exclusive Tag amount.

Thus, it would essentially extend the “drop dead” date for reaching a contract extension until that time – meaning that they would not be forced to cut a player they might otherwise want to keep – Anquan Boldin or Jacoby Jones, for example – until that time.

So, it seems likely that, in the absence of a long-term deal – and despite some media reports – the Ravens would be wise to use the exclusive Tag.  That would, if necessary, give them some extra time to negotiate a long-term deal with Flacco, while – at least until mid-April – not costing them any additional Cap space and allowing them to postpone some difficult roster decisions.


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