Make America Great Again: Eliminate The Franchise Tag

NFL players certainly make a lot of money, but should they be making more? There’s a system in place that is depressing player salaries and it is downright un-American. Dave McCullough explains why the NFL needs to eliminate the franchise tag.

The MVP of Super Bowl 50, Von Miller, is about to become the latest in a long line of NFL superstars screwed over by a clause in Collective Bargaining Agreement. When his rookie contract expires, Miller is unlikely to be granted free agency and will not be allowed to seek the best possible contract – which, in his case, would be not only record-setting but also well-deserved. Instead, Miller – and many others – will be subjected to the franchise tag, the most un-American contract clause in professional sports.

Instituted in 1993 as part of the NFL’s perpetual opposition to player movement and free agency, the franchise tag allows a team to bind a player to them by paying him the average of the top five salaries at his position or 120% of what his previous contract paid, whichever is greater. Instead of permitting the player to earn the market rate for his services, the franchise tag allows NFL owners to artificially depress the salary scale by keeping the best players from entering free agency and allowing other teams to bid on those services.

Free agency is the most contentious issue between labor and ownership in all American professional sports. Major League Baseball has had true free agency – defined as “a professional athlete who is not under contract and is free to auction off his or her services and sign a contract with the team that offers the most money” – since the landmark arbitration ruling in 1975 abolishing the reserve clause, which bound players to their club in perpetuity. However, the NFL successfully resisted the implementation of free agency until 1992, when McNeil vs. NFL found the league’s attempts to retain a form of the reserve clause a violation of existing law.

The NFL long argued that the competitive balance of the league was dependent on teams retaining their players. Of course, the other motive of the owners was keep player salaries from rising. Without a “market” to determine player value, management was able to dictate the terms and conditions under which labor operated. Having lost the ability to control all player movement, the owners created the franchise tag – allowing them to retain one player per season.

The franchise tag is a powerful tool. The goal of every NFL team is to retain its existing player roster as cheaply as possible under the salary cap (also created in the aftermath of the McNeil decision). The tag allows a team to unilaterally extend the negotiating window for additional seasons. Basically, if the player wants too much money, or is unwilling to sign with a team, the franchise tag gives the team the right to hold the player – often against his will.stephen-gostkowski-patriots-featured

Given the restraint on players free movement and earnings – indeed, a limit on their very freedom to engage in free enterprise – use of the franchise tag is almost always acrimonious. It can signal to the player and / or his agent that while valuable, the team is more interested in the short term and controlling the player’s prime years with little future ramifications. While not always negatively affecting the relationship between club and player – such as New England’s use of the tag on star kicker Stephen Gostkowski in 2015 – there are far more examples of the tag souring the relationship.

The risk of injury is ever-present for NFL players. Not only the obvious ligament, skeletal, and muscle injuries, but the hidden danger of repetitive brain trauma that has only recently gotten the attention it deserves. The year-to-year nature of the franchise tag not only limits the earnings of the player, but subjects him to more long term risk, in that an injury while under the tag can end a player’s earning power. Not only is the player prevented from participating in the free market, he is burdened with additional risk that other players mitigate with the signing bonus associated with a long term contract.Jimmy-Graham

Additionally, the franchise tag serves to hold down the salaries of all players through the use of an average of top salaries and positional assignments. In 2014, Jimmy Graham, then of the New Orleans Saints, was “tagged” as a tight end instead of a wide receiver, costing him more than five million dollars in compensation given the different rates at which the market, when acting freely, valued each position.

Graham sued, but he lost, and ultimately was left with no choice but to re-sign with New Orleans. He was then subsequently traded to Seattle, because teams can do whatever they want to players under contract – trade them, cut them, bench them – without consideration of what is best for the player and his family.

The franchise tag is a tool for player control and salary suppression entirely to the benefit of owners, and at a heavy cost to players. The teams’ fans almost invariably side with management, arguing the player is “gonna get paid anyway” and “How much does he need, anyway?”

Such facile analysis misses the point spectacularly: The franchise tag is yet another tool in the owners’ arsenal to minimize their risk and place it directly on those who can least afford to assume it, while depriving them of any ability to escape the situation.

Private citizens can choose to leave their employer “at-will” and seek better compensation or a better situation for themselves and their families. Any attempt to “franchise tag” a doctor or a lawyer or a minister or a plumber would be met with howls of indignation, and justifiably so.

Americans are free to choose their own path – it’s even in our very first founding document as a nation: the Declaration of Independence. Yet, for some reason, this is completely ignored when it comes to football players who, rather than celebrated for pursuing recognition and recompense for their talents, are smeared for the alleged “greed” they show simply for wanting to improve their own situation.

The franchise tag was designed to restrict the ability of the best players to seek better employment terms. Sure, Von Miller may love it in Denver. But whether he does or not is irrelevant: He will not be allowed to leave, or explore his options, because of a restrictive and un-American contract clause that binds him to the Broncos until they decide he is no longer worth the investment.

What types of solutions would make the franchise designation more palatable? There are three concepts that would create a more equal balance of power with regards to the tag:

  • Reduce the number of times an NFL team can use the tag from one player per season to one player over two seasons
  • Make the value of the tag equal to the average of the top three salaries at the position instead of the top five, or 140% of what the previous contract paid instead of 120%
  • Allow the player to respond by not only accepting the franchise offer but also accepting a fully-guaranteed second year with a 20% salary bump from the original franchise number

These concepts will allow teams to continue to extend negotiating windows with players they value highly, but creates a steeper price, both in terms of opportunity cost by reducing the number of times a team can use the tag, as well as monetary cost, by increasing the cost to the team if a long-term deal is not reached.

We, as a nation, would not put up with such a restraint on personal freedom in any other industry. It is time for free agency to mean something again. Make America great again, and eliminate the franchise tag.

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Inside The Pylon covers the NFL and college football, reviewing the film, breaking down matchups, and looking at the issues, on and off the field.

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