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How They Were Signed: Rookie Exception

January 11th 2014 at 9:54pm CST by Jonathan Nehring

Continuing the discussion as to how teams have signed the players on their roster, we now turn our attention to the rookie exception. The rookie exception allows teams to sign players drafted in that year’s NBA draft regardless of their current cap situation.

Unlike previous exceptions we have discussed that can be quite complicated, the rookie exception is fairly straightforward. It applies only to picks drafted in the first round and allows a team to sign their first round pick for up to 120% of that year’s rookie scale amount. A player’s rookie scale amount is dependent on how highly they were drafted. Under this exception, a rookie is given two guaranteed seasons and the team is given options to extend that contract for the third and fourth seasons.

If the team picks up the third and fourth season team options, the rookie scale also provides a one-year qualifying offer amount the team must offer the player if they want him to stay beyond a fourth season. The qualifying offer triggers restricted free agency. In many cases, the player warrants a higher salary and a contract that covers a greater length of time, but the qualifying offer serves as a baseline for negotiation. The amount of the qualifying offer can change if a player meets “starter criteria,” which you can read more about here.

The salaries for the first three seasons of the rookie scale contract are set figures, whereas the fourth year and the qualifying offer are percentages of the previous year’s salary.

An example of what the rookie scale for the top 5 picks of the 2013/14 draft looks like is listed below:

Pick

Year 1

Year 2

Year 3 Team Option

Year 4 Team Option (% over year 3 salary)

Qualifying Offer: (% increase over year 4 salary)

1

$4,436,900

$4,636,600

$4,836,300

26.1%

30.0%

2

$3,969,800

$4,148,500

$4,327,100

26.2%

30.5%

3

$3,565,000

$3,725,400

$3,885,800

26.4%

31.2%

4

$3,214,200

$3,358,800

$3,503,500

26.5%

31.9%

5

$2,910,600

$3,041,600

$3,172,600

26.7%

32.6%

Remember that teams can, and usually do, sign their rookies to 120% of that player’s rookie scale amount. Proof of that is what the contracts for the top 5 picks of this draft actually turned out to be. They were all signed to the maximum amount (120% of the rookie scale) allowed under the rookie scale.

Player

Year 1

Year 2

Year 3 Team Option

Year 4 Team Option

Anthony Bennett

5,324,280

5,563,920

5,803,560

7,318,289

Victor Oladipo

4,763,760

4,978,200

5,192,520

6,552,960

Otto Porter

4,278,000

4,470,480

4,662,960

5,893,981

Cody Zeller

3,857,040

4,030,560

4,204,200

5,318,313

Alex Len

3,492,720

3,649,920

3,807,120

4,823,621

Feel free to read Hoops Rumors explanation of the rookie scale for more information as to how this exception works. Below is a team-by-team list of players who were signed using the rookie exception.

StorytellersContracts and ShamSports were used in the creation of this post.

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