Teams have already designated franchise tags to a number of players. Without a collective bargaining agreement in place, however, it might not mean much, since players can't even be in the facility or get paid if a lockout begins March 4. Sooner or later, though, teams will get back to work, and the franchise tags will likely be in effect.
Franchise tag numbers
There is a story inside the story when it comes to the franchise tag this year, especially at the quarterback position. The Colts really need to get a long-term deal done with Peyton Manning, which I believe they will at some point. But if they don't, it could cause big financial issues around the NFL.
Manning is more than the face of the Indianapolis Colts. He is the franchise and the single-most important player to a team in the NFL. His contract has expired, and he has consequently been hit with an exclusive rights franchise tag. The Colts reportedly offered him a four-year deal worth $72 million. It sounds astronomical, but when you consider the alternative, it is a good deal for the club and, more importantly, the league.
The value of that franchise tag is 120 percent of his last annual salary ($23 million). That means his salary per game is very close to $1.5 million, which sounds outrageous for any player, but it could grow exponentially if he ever decided to play for the franchise-tag price each and every year for the next three years, instead of doing a long-term deal.
The Colts can only tag Manning for the next three years as negotiated in the last CBA, something we like to refer to as the "Walter Jones rule," because of the number of times he was tagged by the Seahawks. A tag on Manning for three years works out to a value of $83.72 million if you look at the chart for the years 2011, '12, '13.
Each year that Seattle had to offer Jones a franchise tag to retain his services, his contract would be guaranteed the second he signed the offer sheet. There are projections that estimate the 2011 salary cap could be in the neighborhood of $150 million per team, if and when there is a new CBA. Although it is speculation at this point, if that number is accurate, Manning's franchise-tag salary would consume about 15.3% of the salary cap in 2011, leaving 52 players to divide up the other 85 percent.
There are other issues that also make Manning playing under a franchise tag for three straight years problematic. Tom Brady signed a four-year deal worth $72 million prior to the season, a manageable contract. The other matter at hand is the top-five by position situation. The franchise tag for a quarterback would raise $2 million if Manning sits atop the list with a number of $23 million. The ripple effect of Manning would ultimately affect every quality quarterback in the NFL that had an expiring contract.
Michael Vick also received an exclusive franchise tag and his salary, if no long-term deal is consummated, could be close to $16 million, which would push the quarterback franchise average even higher.
Let's take a quick look at Saints quarterback Drew Brees. He is entering the last year of his contract at $7.4 million. He would be a free agent next year, if he doesn't negotiate a long-term deal. The franchise-tag value could be close to $19 million by that time, which means Brees would basically get $10 million more than the 120 percent raise would have given him if Manning and Vick were not franchised.
By the time a guy like Matt Ryan's contract expires after the 2013 season, Tony Romo in 2014, or even worse Aaron Rodgers in 2015, we would be looking at a franchise number that's hard to comprehend. The Falcons and Saints are paying a lot closer attention to the negotiations up in Indianapolis than you might think, because of the ripple effect it will eventually have on their clubs.