A Franchise Tag in the NBA
Evaluating the possibility of the NBA incorporating the NFL’s franchise tag.
by Kyle Stack / @KyleStack
During a time in which the NBA is facing uncertainty in how its economic structure will proceed, it might pay off to look at other sports leagues for inspiration. Or it might not. It depends through which prism one is looking: whether the League benefits from the players holding the power they currently enjoy or the owners retaining it.
One inclusion in the NBA’s new Collective Bargaining Agreement — which can become official as soon as July 1, 2011 after the current CBA expires June 30 — that can help sway power to one side or another is what’s known as a franchise tag. It’s a team option signed into the NFL’s current CBA that permits each team to choose one free agent per offseason whom it would like to “franchise.” Here’s how it works:
– Every offseason before free agency, each team can assign the franchise tag to one player from its crop of restricted and unrestricted free agents. The tag forms the basis for a one-year contract, with the player able to become an unrestricted free agent once the ensuing contract has been completed. (A team can’t “franchise” the same player for more than two consecutive seasons.)
– If the team decides to apply the tag to a player, it has to decide if it’ll make it of the exclusive or non-exclusive variety. Exclusive means the team has to pay the greatest of the three following scenarios: 1) a minimum offer of the average of the top-five salaries at the player’s position for the current year as of April 15; 2) 120 percent of the player’s salary from the previous year; or 3) the average of the top five salaries at the player’s position as of the end of the previous season. And that player can’t negotiate a contract with any other team.
A non-exclusive tag eliminates the first pay option of those three and holds in play 120 percent of the previous year’s salary or the average of the top five salaries at the player’s position from the prior season, whichever is greater. Plus, that player has the freedom to negotiate a deal with any other team.
– If another team agrees to a contract with that “franchised” player, then the player’s original team receives two first-round draft picks if it decides not to match the new team’s offer.
– Finally, a player has the option to sign a multi-year deal with his current club until July 22 of the offseason in which he is “franchised.” After July 22, any contract signed by that player can be for only one year. He must sit out the season if he opts not to put his name on a contract by November 16.
If your head is spinning, think of it this way. If an NFL team has a free agent whom they don’t feel confident they can re-sign to a long-term deal, they hold the card of applying the franchise tag and either retaining the player’s services for another year — albeit at a high price — or receiving two first rounders, depending on how the scenario develops.
Given the power exerted by NBA players during this summer’s free agency period, and the power plays Chris Paul and Carmelo Anthony have attempted on their current teams, the franchise tag would seem to be an appealing option for owners if they want to keep a star player from leaving via free agency. One former general manager agrees.
“The franchise tag would be a huge hit for the owners,” said Steve Kerr, who returned to TNT’s broadcast booth as its lead game analyst after three years as general manager of the Phoenix Suns. “One of the biggest issues they’re trying to accomplish with this next CBA is cutting down the length of guaranteed contracts and getting rid of dead money — when a guy signs a $100 million deal and he gets injured.”
Kerr explained during a phone conversation that the franchise tag represents a way for teams to ward off a player’s free agency. Now, if the franchise tag as it exists in the NFL were applied to the NBA, any “franchised” free agent who was given non-exclusive status would still be able to shop his services around the League — it’s just that the signing team would have to send back two first rounders to the player’s original team. (It’s possible trade compensation could change if the NBA installed the tag into its CBA.) But Kerr’s point is correct in that the basis of a franchise tag is to restrict a player’s freedom.
For Gabe Feldman, director of the Sports Law Program at Tulane University, a franchise tag in the NBA would represent a team’s increased leverage versus a player demanding a trade.
“That might make it easer for teams to say ‘you can’t force our hand in the short run because we have a year or two to work out a trade,’” Feldman said in a phone interview.
With the Denver Nuggets’ hand being forced by Anthony, they would likely welcome the ability to assign him with a franchise tag next offseason. That would show inquiring teams that they wouldn’t be forced into agreeing to a deal that they wouldn’t value as much had they been given more time to search for an ideal trade.
The ability for teams to gain leverage in those situations can’t be underestimated. Larry Coon, an NBA salary cap expert who runs the website CBAFAQ.com, said that while the Nuggets still control the Anthony situation to a degree, they don’t hold much leverage.
“Under a normal situation, if a player has one more year left to become a free agent and he wants to go, he can hold a team hostage,” Coon said during a phone conversation.
The NBA probably doesn’t want too many more of its star players demanding trades considering Anthony and Paul’s reported recent trade demands come on the heels of Kobe Bryant demanding a trade from the Los Angeles Lakers in 2007. That’s an undesirable proposition for a league which still has image problems. Yet the players would have a reasonable argument against a franchise tag. Take Anthony’s possible scenario, for instance. Imagine if the NBA adopted the franchise tag in its NFL form and put it into effect beginning next offseason. Furthermore, pretend Anthony wouldn’t sign a contract extension between now and then.