What is the primary purpose of the Franchise Player designation?

The primary purpose of the Franchise Player designation is to provide security and retain key players for a team. This designation allows a team to keep a valuable player by offering them a one-year contract at a price that is typically the average of the top five salaries at their position or 120% of their previous year's salary, whichever is greater. This mechanism helps teams maintain continuity and competitiveness by ensuring that essential players remain on the roster.

While the other choices refer to different aspects of player management and team strategy, they do not accurately capture the intent of the Franchise Player designation. Transitioning a player into a coaching role relates more to personnel development than contract designation. Limiting salary negotiations does not accurately reflect the intent, as the Franchise Player designation actually opens negotiation avenues that are beneficial to teams. Lastly, using it to determine draft pick compensation for outgoing players is not the primary function; this is typically a separate process involving trade negotiations and league rules. Therefore, the correct answer emphasizes the role of the Franchise Player in stabilizing and preserving a team's core talent.