Owners are allowed to use the Franchise Tag or Transition Tag on one player per off-season. Any player with an expiring (0 years left) contract will be eligible. The current year franchise tag amount will be the prior year average of the top five players at his position or a 120% of the player's current salary, whichever is greater. The current year transition tag amount will be the prior year average of the top 10 players at his position. Once the tag is applied the player is then available for open bidding (using UFA rules).
Franchise Tag: The controlling owner has the right to match the highest bid. If the owner declines to match than the player will go to the highest bidder at the cost of two 1st round picks (or negotiated price). To be eligible to bid on a franchised player an owner MUST have at least two first round picks within the next two years in the event the controlling does not match. If the bidding owner has more than two first round picks, the controlling owner may pick the two they want. Compensation can be negotiated if the controlling owner is willing to accept less than two 1sts. There is no obligation to do so. If the player receives a bid and the controlling owner matches, the player can be signed for up to 5 years. If no one bids on the player, the player is signed at the tender offer amount for 1 year.
Transition Tag: The controlling owner has the right to match the highest bid. If the owner declines to match than the player will go to the highest bidder and the controlling owner receives no compensation. At the appropriate time the controlling owner may sign the player to a contract not to exceed 5 years.