Is the Franchise Tag Coming to the NBA?

For NFL team owners, it’s a life saver meant to keep star players at home. For NFL players, it’s a form of restraint meant to keep them from testing free agency. It’s the “Franchise Tag,” and it may be coming to the NBA.  

Under the NBA’s current Collective Bargaining Agreement, a player like LeBron James can simply walk away from his team after his contract expires. If the player has an opt-out clause like Carmelo Anthony does for the 2011-12 season, he too can leave when he reaches the opt-out period of his contract. This is great for players seeking greener pastures, but it leaves their former organizations high and dry. The Nuggets have sought to avoid losing their marquee player and have offered him a 3-year, $65 million contract extension, which Anthony has thus far turned down. Left with the prospect of losing their best player and getting nothing in return, the Nuggets have been trying to trade Anthony. So far they’ve been unable to find an acceptable offer and now face the prospect of a long season filled with questions about their future. This is an unusual situation for clubs who are used to having the upper hand when dealing with contract issues.  

When the free agency period approached this past offseason, there was speculation that Atlanta Hawks’ star Joe Johnson would leave the Hawks and test the open market.  The Hawks successfully ended that speculation by offering Johnson a max contract. Only a player’s current team can offer him a true max contract (other teams can offer a less lucrative “max” deal), which means that if a superstar like Anthony or Johnson leaves his team, he’ll be walking away from millions. Johnson may have wanted to play for a more polished team, but he couldn’t turn down the money. Most players can’t, which is why home teams usually have the advantage in contract negotiations. There aren’t too many players that are going to leave 30, 40, or even $50 million on the table. But for small and medium market players who have already played through a lucrative contract, the lure of the big city and a more competitive team might actually be more tempting than the big bucks sitting on the table.

The prospect of stars turning down money in order to play for a more competitive team seems to have come as a surprise to team owners. It shouldn’t have. For years star players have taken less money to help keep their teams competitive, and now stars may be willing to take less money to move to a more competitive team. In fact, NBA superstars may now be trying to put together their own competitive roster. That is what many believe Dwyane Wade, Chris Bosh, and LeBron James pulled off this summer in Miami.  That’s a scary prospect for team owners. The last thing they want is for players to begin openly manipulating NBA rosters. That’s why many believe the NBA owners will insist on a franchise tag in the next collective bargaining agreement.

If the franchise tag was in place this past offseason, James and Bosh would probably still be in Cleveland and Toronto, respectively. The Nuggets would also be breathing a bit easier as they’d know they’d have the ability to keep Anthony in Denver for at least one more year. Presumably the ability to opt out would be eliminated from contracts, and players of Anthony’s caliber would have the exclusive franchise tag placed upon them.  

The “exclusive” franchise tag, as used in the NFL, allows a team to place a “franchise” tag on a player whose contract has expired and a new one hasn’t been agreed upon. That player then must remain with his current team for the following season, and he cannot negotiate with other teams. His pay for that year is based on the average pay of the top five players at his position, or 120 percent of his previous year’s salary, whichever is greater. The non-exclusive franchise tag is similar to the exclusive franchise tag except it does allow the player to negotiate with other teams, and if a player comes to an agreement with another club, his former club has the right to match the offer or let him go and receive two first round draft picks as compensation. However, a team can only use the franchise tag on the same player for two consecutive years, and if the player is not re-signed during that time, he becomes a free agent. This ability would give teams more time to work on convincing their superstars to stay. 

Although Anthony has not openly indicated a desire to opt out or be traded, his lack of willingness to re-sign has spoken loudly. The Nuggets now have one season to convince their superstar to stay, or they could be left with nothing but empty seats. Without a marquee player or a top pick to sell their fans, the team would immediately go into the waiting and hoping mode that many starless teams find themselves in. 

More than any other major team sport, the NBA is a league driven by stars, but that doesn’t mean that the owners want the players in the driver’s seat. The franchise tag would put the owners back in control and would limit movement by players. With the franchise tag in their back pockets, owners would be able to curb the long-term deals they’ve been handing out and stick to the more desirable (for owners) 3- and 4-year deals. Shorter deals mean that unproductive players will be gone sooner. The shorter deals would also protect teams from having to carry oft-injured players long-term. The franchise tag gives added protection because players who are franchised and then suffer serious injuries can be jettisoned at the end of the season. This is simply too valuable a weapon not be brought into the owners’ arsenal. Look for the owners to push hard for its addition into the new collective bargaining agreement. If Anthony is indeed looking to get out of Denver, he better do it when free agency begins next July, because that might be his last chance to move around freely. The franchise tag is probably headed to the NBA, and once it arrives it’ll likely be in place for years to come.   


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