What's the importance of the "franchise" tag on a player?

[NathanBWF]

?

 

[MrBond]

Franchise players must be offered the average of the top five salaries at their position or 20 percent over their 2004 salary. Franchise players (unless they are exclusive) can negotiate with other teams, but any team signing a franchise player would have to compensate the players' former team with a pair of first-round draft choices if the offer is not matched. If a player is named an "exclusive franchise" player, they can't talk to any other teams.

From ESPN.com

 

[MrChad]

What is a "franchise player?"

A franchise player usually refers to a star athlete that an organization can "build a team around." In an age of salary caps and free agencies, the best players obviously carry high price tags, so teams will often sign one or two to big deals (lots of money over many years) to give them a foundation for building a team. The other positions are filled in with cheaper talent, and the team can formulate its strategy based on the strengths of its star player(s).

EDIT: Wow, I didn't realize there was such a specific definition. Thanks MrBond :thumbsup:

 

[RaistlinZ]

MrBond = correct

 

[Doggiedog]

MrBond > MrChad

 

[squeeg22]

Basically, it is conceded that the player tabbed the "franchise player" is going to sign a large contract, either from his team or through free agency. But by tabbing him this, if the player doesn't resign with the original team, they are guaranteed some sort of compensation (draft picks) when their player chooses to sign elsewhere. (see Mr. Bond post)

How does this help? Teams trying to sign the franchise player of another team will need to assess whether the high salary + the loss of draft picks is worth the risk. The original team has a higher chance of retaining their own players.

In basketball/baseball, you'll often see teams trading players (with contracts that expire after the current year and will unlikely resign with the team in the offseason) right before the trading deadline. Often, the team will receive less than equal value in the trade. This must occur because they don't have the "franchise player" option at the season end that guarantees them any extra compensation. Therefore, it's better to unload a player through mid-season trade in exchange for less value than lose him in the off-season and get nothing in return.