Franchise Tag rules explained (hopefully)

[ItsNotGonnaBeAlright]

Ok, there's been a lot of confusion regarding the team's options when it comes to using the Franchise Tag on Greg Hardy. Since this argument is going on in multiple threads and has been for several days, I figured a new thread to try and explain the tag scenarios as best I can and what each on will mean for the Panthers. Here goes:

Option 1: "Exclusive" Franchise Tag - This is the lesser used version of the tag. Essentially, this is a team preventing a player from becoming a free agent for one full year. The team retains all rights to the players contract and the player can only negotiate with that team until the start of the next free agency period. Once the one year contract is signed, the player's salary becomes fully guaranteed and is applied to the teams salary cap. However, the player can be traded just like any other player under contract, and so long as they are traded before the first Tuesday after the team's first game of the season, then the team that receives the player will be on the hook for the full contract amount, no matter what. The exclusive tag is more expensive than the non-exclusive tag because it is only the average salary of the top five salaries at the player's position for the previous year. So slapping Hardy with an exclusive tag would cost right around $14 million, guaranteed to him no matter what. The team would be able to negotiate a trade at any point for any compensation they ask for and, if another team accepts the trade, that $14 million goes against their cap, not ours. Hardy is then free to negotiate ONLY with that team for a long term contract, and whatever contract he works out would be an extension of his current contract that couldn't affect the fact that he will make that $14 million this year. This option gives the Panthers plenty of flexibility on their own part, but would be a risky move for the other team as there is no promise that Hardy will even seek a long term contract with them and instead just wait for free agency the following season when that team would have to pay Hardy a guaranteed $16.8 million for one year in order to use the franchise tag if a deal can't be reached.

Option 2: Non-exclusive Franchise Tag - This is the more common version of the franchise tag. Essentially, the team is offering the player a one year contract and ensuring that they have the ability to counter any offer the player receives. This tag is also cheaper thanks to the new CBA. Instead of an average of the top five salaries for the player's position in the previous season, it's the average of the top five salaries for the player's position for the previous FIVE seasons. So instead of nearly $14 million for the exclusive tag, the non-exclusive tag would be a contract worth just under $13 million. After the tag is applied, the player is free to negotiate with any team in the league and the original team has no say in those negotiations. If another team makes an offer, Carolina gets to make a counter offer. This offer replaces the one year contract that was offered when the tag was applied. The player is then free to sign whichever offer he likes better. If he signs the contract offered by the other team, then the other team is required to give the original team two first round draft picks. Those picks have to be the original picks for that team, none acquired through a trade (so, Cleveland couldn't bundle it's two first rounders this year in order to satisfy the requirement). The stipulation of the two first round draft picks is not negotiable. As for the money, until the player signs the contract, no money hits anyone's salary cap. Additionally, if either offer from the original team is signed, that team could still trade the player anytime before the first Tuesday of the season and still avoid any hit towards the salary cap. This option takes bargaining power from the Panthers and raises the cost of the player for other teams, but it's also more enticing for other teams to take on because they'll be guaranteed a long term contract with the player.

EDIT: Transition Tag (for Panthro): If the team is dumb enough to use the Transition Tag, kill yourself. Things aren't getting any better.

TL;DR: If Hardy is franchised, and then goes to another team, the money in that contract doesn't affect the Panthers. The "Exclusive" tag is more expensive and better for the Panthers, but risky for another team to trade for. The "Non-Exclusive" tag is less expensive, leaves the Panthers with little bargaining power, and less risky but more expensive for another team to negotiate for.

[JawnyBlaze]

I'm glad you took the time to explain that. I was seeing a lot of misunderstanding around here about what guaranteed money means to the cap but was too lazy to make a thread myself. What a lot of people are confusing, I think, is signing bonus money. A player's signing bonus is what a team is on the hook for even if they're traded or release. Responsibility (and cap hit) for guaranteed money follows a player to the new team if they're traded. Franchise tag is guaranteed money, not a signing bonus.

[Kurb]

Didn't realize the nonesclusive was non-negation able.

[Panthro]

you missed transition tag

 

blaaaaaarg

[TylerVagyler]

I've always thought if a player was tagged and traded the original team would have to eat some of the money. 

 

If that is not the case, I'm not against a tag and trade.

Would a team give up a mid to late 1st for him?

[ItsNotGonnaBeAlright]

Didn't realize the nonesclusive was non-negation able.

There's no rule that says the original team can't then trade one of the first round picks back to the other team in exchange for something else (player or more picks). Would have to be an additional transaction though.

I don't know if that's a change in the new CBA or not.

[Ricky Spanish]

please correct me if I am wrong, but I was under the impression that it was not a definitive 2 first rounders if we trade hardy away. we could work out a deal so that the other team doesn't forfeit two first rounders for one player, possibly a first and second, or even a first and third. is this only the case with Restricted free agents, and if so, why is it that hardy is not a RFA this offseason since his first contract with the team just expired. 

[ItsNotGonnaBeAlright]

please correct me if I am wrong, but I was under the impression that it was not a definitive 2 first rounders if we trade hardy away. we could work out a deal so that the other team doesn't forfeit two first rounders for one player, possibly a first and second, or even a first and third. is this only the case with Restricted free agents, and if so, why is it that hardy is not a RFA this offseason since his first contract with the team just expired.

We can work additional picks, but that deal would technically have to be seperate from the actual deal that moves Hardy. So say we trade with Oakland. Oakland sends us their 2014 and 2015 first rounders, we send Hardy. Then, we trade Oakland the 2015 pick for their 2014 third rounder. It's also possible that we would get someone's 2015 and 2016 selections, but only if the deal happens after this year's draft.

As for the RFA stuff, I have no idea.

[MtnProwler]

Thanks for clearing most of this up for us!

[Argus Plexus]

What I see is with the tag, we win no matter what happens.

[Goondal]

So if a team has already traded their first round pick we would get the pick from the following two seasons, yes?

 

I think I prefer non-exclusive.  Not only is it cheaper but if he went elsewhere we would get two first round picks for him, which is probably more than we could get otherwise.

[panthers34]

please correct me if I am wrong, but I was under the impression that it was not a definitive 2 first rounders if we trade hardy away. we could work out a deal so that the other team doesn't forfeit two first rounders for one player, possibly a first and second, or even a first and third. is this only the case with Restricted free agents, and if so, why is it that hardy is not a RFA this offseason since his first contract with the team just expired. 

 

I think you can offer the player up for any draft pick you want, so I think you can just offer a first rounder and nothing else on top of it to increase the chance of another team going after the player

[ItsNotGonnaBeAlright]

So if a team has already traded their first round pick we would get the pick from the following two seasons, yes?

 

So far as I can tell, it absolutely has to be the two drafts following the trade. The rules aren't very clear on whether or not a team without a first round pick in the next draft would be barred from entering negotiations. It could be that the team only has to give up the next two first rounders it has original rights to, or it could be that if a team does not have original rights to its next two consecutive first round picks at the time of the deal then they can't deal. So, this could mean that Washington and Indy can't talk to Hardy until after this year's draft, or it means those teams have to be willing to give up an even greater piece of their future than they already have in order to do so.

[ItsNotGonnaBeAlright]

I think you can offer the player up for any draft pick you want, so I think you can just offer a first rounder and nothing else on top of it to increase the chance of another team going after the player

Don't know how to make this any more clear: If the player is tagged with the non-exclusive tag, it's two first rounders with no negotiating. There can be negotiations after that deal, but the offering team has to give up its next two consecutive original first round draft picks. If it's the exclusive tag, then the offer of picks can be whatever the teams agree on, but it's unlikely any team would enter that deal because the money is greater and there's no guarantee of a long term deal.