Chiefs place franchise tag on linebacker Justin Houston, long-term contract still in play

After months of speculation, there’s finally a tangible first step toward Justin Houston’s long-term contract future.

As expected, the Chiefs franchise-tagged Houston on Monday, and a league source told The Star it was a nonexclusive tag, which allows the Chiefs’ star outside linebacker to receive offers from other teams.

The source also said Houston was not expected to sign the $13.195 million, one-year franchise tender at the moment, though it was unclear when Houston will decide whether to sign. He and the Chiefs are still negotiating toward a new contract.

“Justin is a talented player and a key contributor to our defense,” Chiefs general manager John Dorsey said in a release announcing the franchise tag. “We will continue to discuss long-term options with him and his agent. Our goal is to reach a deal that is mutually beneficial. We want to keep Justin in a Chiefs uniform for years to come.”

By signing the one-year franchise tender, Houston would be under contract and be required to attend organized team activities and the Chiefs’ offseason program when they begin in April. But by holding off, Houston can also skip training camp and the preseason, return shortly before the regular season and command his full franchise salary.

Houston could also hold out for the first part of the season, return before week 10 and still earn an accrued season toward free agency.

The Chiefs have the option of rescinding the tender on Houston, but that would make him an unrestricted free agent.

The two sides still have until July 15 to work out a long-term deal. Otherwise, Houston would have to play the 2015 season under the tag to earn an accrued year. The Chiefs have the option of franchising Houston in 2016 for 120 percent of his 2015 salary, but would not be able to do so in 2017.

A nonexclusive tag would pay Houston the average of the five largest prior-year salaries at linebacker, which is currently projected to be approximately $13.2 million, but only if he doesn’t receive any offers from other teams.

If he does, the Chiefs could either match the offer or let Houston walk for that team’s first-round picks this year and next, though it’s very rare for teams to surrender that bounty for any free agent.

The free agency period officially begins at the start of the new league year (March 10), but teams can begin contacting the agents for players at noon Saturday.

The Chiefs will presumably need to slice another $5.5 million in salary by March 10 to accommodate Houston’s tag, since all teams have to be under the cap by the start of the new league year. The Chiefs, according to cap analyst Joel Corry, are currently believed to be roughly $7.5 million under the cap, which was officially set at $143.28 million for 2015.

Houston’s franchise tag immediately counted on the salary cap when the Chiefs issued it Monday.

The two sides discussed a contract extension last summer, when Houston skipped the entirety of the Chiefs’ offseason training activities before reporting for training camp on time.

But a source told The Star during training camp that the two sides were “far apart” on an extension, and the 26-year-old Houston proceeded to break Derrick Thomas’ single-season franchise record for sacks last season with 22.

This fittingly netted Houston the Derrick Thomas Award as team MVP at the 101 Awards banquet Saturday.

To reach Terez A. Paylor, call 816-234-4489 or send email to Follow him on Twitter: @TerezPaylor.

Related stories from Kansas City Star