Hoops Rumors Glossary

The NBA’s draft lottery, which takes place every spring between the end of the regular season and the draft, is the league’s way of determining the draft order and disincentivizing second-half tanking. The lottery gives each of the 14 non-playoff teams – or whichever clubs hold their first-round picks – a chance to land one of the top four picks in the draft.

Although the top four picks of each draft are up for grabs via the lottery, the remaining order is determined by record, worst to best. The league’s worst team isn’t guaranteed a top-four spot in the draft, but is tied for the best chance to land the first overall pick and will receive the fifth overall selection at worst.

The first four picks are determined by a draw of ping-pong balls numbered 1 through 14. Four balls are drawn, resulting in a total of 1,001 possible outcomes. 1,000 of those outcomes are assigned to the 14-non playoff teams — for instance, if balls numbered 4, 7, 8, and 13 were chosen, that combination would belong to one of the 14 lottery teams. The 1,001st combination remains unassigned, and a re-draw would occur if it were ever selected.

The team whose combination is drawn first receives the number one overall pick, and the process is repeated to determine picks two, three, and four. The 14 teams involved in the draft lottery are all assigned a specific number of combinations, as follows (worst to best):

1. 140 combinations, 14.0% chance of receiving the first overall pick
2. 140 combinations, 14.0%
3. 140 combinations, 14.0%
4. 125 combinations, 12.5%
5. 105 combinations, 10.5%
6. 90 combinations, 9.0%
7. 75 combinations, 7.5%
8. 60 combinations, 6.0%
9. 45 combinations, 4.5%
10. 30 combinations, 3.0%
11. 20 combinations, 2.0%
12. 15 combinations, 1.5%
13. 10 combinations, 1.0%
14. 5 combinations, 0.5%

If two lottery teams finish the season with identical records, each team receives an equal chance at a top-four pick by averaging the total amount of outcomes for their two positions. For instance, if two teams tie for the league’s fourth-worst record, each club would receive 115 combinations and an 11.5% chance at the first overall pick — an average of the 125 and 105 combinations that the fourth- and fifth-worst teams receive.

If the average amount of combinations for two positions isn’t a whole number, a coin flip determines which team receives the extra combination. For example, if two clubs tied for the league’s third-worst record, the team that wins the coin flip would receive 133 of 1,000 chances at the first overall pick, while the loser would receive 132. The coin flip also determines which team will draft higher in the event that neither club earns a top-four pick.

The table below displays the odds for each lottery team, rounded to one decimal place. Seeds are listed in the left column, while the picks are noted along the top row. For our purposes, the first seed is the NBA’s worst team.

It’s worth noting that the NBA’s lottery format was recently changed, with 2019’s draft representing the first one that will use the new system. Previously, only the top three spots were determined via the lottery, and the odds were weighted more in favor of the league’s worst teams.

For instance, in 2018, when the league-worst Suns landed the first overall pick, they had a 25.0% chance to receive that No. 1 selection heading into the lottery, and couldn’t have dropped further than No. 4 (35.8%). In 2019, the NBA’s worst team will only have a 14.0% chance at the top pick and will have a 47.9% chance of falling all the way to No. 5.

Note: This is a Hoops Rumors Glossary entry. Our glossary posts will explain specific rules relating to trades, free agency, or other aspects of the NBA’s Collective Bargaining Agreement. Information from Tankathon.com and Wikipedia was used in the creation of this post.

Earlier versions of this post were published in 2012 and 2013.

The NBA’s rookie scale, which determines how much first round picks earn during their first four NBA seasons, also dictates how much the qualifying offers will be worth for those players once they’re eligible for restricted free agency after year four. However, the value of those qualifying offers can fluctuate depending on whether or not a player has met the “starter criteria.”

Here’s how the starter criteria works:

A player who is eligible for restricted free agency is considered to have met the starter criteria if he plays at least 2,000 minutes or starts 41 games in the season before he reaches free agency.

A player can also meet the criteria if he averages either of those marks in the two seasons prior to his restricted free agency. For instance, if a player started 50 games in 2017/18 and 32 in 2018/19, he’d meet the starter criteria, since his average number of starts over the last two seasons is 41.

A player’s ability or inability to meet the starter criteria impacts the value of the qualifying offer he receives as a restricted free agent, as follows:

• A top-14 pick who does not meet the starter criteria will receive a qualifying offer equal to the amount the 15th overall pick would receive if he signed for 120% of the rookie scale.
  • Note: For the summer of 2019, the value of this QO will be $4,485,665. Kristaps Porzingis and Frank Kaminsky are examples of players who fall into this group.
• A player picked between 10th and 30th who meets the criteria will receive a qualifying offer equal to the amount the ninth overall pick would receive if he signed for 120% of the rookie scale.
  • Note: For the summer of 2019, the value of this QO will be $4,915,726. Kelly Oubre and Rondae Hollis-Jefferson are examples of players who may fall into this group — Oubre needs to play 229 more minutes this season, while Hollis-Jefferson must make two more starts.
• A second-round pick or undrafted player who meets the criteria will receive a qualifying offer equal to the amount the 21st overall pick would receive if he signed for 100% of the rookie scale.
  • Note: For the summer of 2019, the value of this QO will be $3,021,354. Thomas Bryant and Rodney McGruder are examples of players who fall into this group.
• For all other RFAs, the standard criteria determine the amounts of their qualifying offers.

Extending a qualifying offer to a player who is eligible for restricted free agency officially makes that player an RFA, ensuring that his team has the right of first refusal if he signs an offer sheet with another club. It also gives the player the option of signing that one-year QO.

Generally, the value of a restricted free agent’s qualifying offer isn’t hugely important, since very few RFAs accept those offers outright. There are exceptions though.

Last offseason, for instance, Rodney Hood was the only player to accept his qualifying offer, which was worth $3,472,888. Hood was nagged by injuries during the two seasons prior to his restricted free agency and was limited to just 119 total games, including 78 starts. If he had started four more games during that two-year stretch, he would have met the starter criteria and bumped the value of his QO up to $4,749,591, which could have changed the way his free agency played out.

We’ll revisit the starter criteria at season’s end to see which potential restricted free agents will have their qualifying offers impacted by meeting – or failing to meet – the starter criteria.

Note: This is a Hoops Rumors Glossary entry. Our glossary posts will explain specific rules relating to trades, free agency, or other aspects of the NBA’s Collective Bargaining Agreement. Larry Coon’s Salary Cap FAQ was used in the creation of this post.

Photo courtesy of USA Today Sports Images.

While the NBA’s Collective Bargaining Agreement limits the flexibility teams have to sweeten their offers to free agents, one tool clubs have at their disposal is a trade kicker. Also known as trade bonuses, trade kickers represent extra cash a player can receive if his team trades him, and are often written into contracts for major free agent signings or extensions.

Trade kickers can be represented in a fixed dollar amount or a percentage, or a combination of the two. For example, Kelly Olynyk‘s current contract with the Heat calls for a trade kicker worth the lesser amount of $2MM or 5% of his remaining salary.

Trade bonuses can’t exceed 15% of the player’s remaining salary. However, many of them are worth that maximum allowable amount. Currently, 18 of the 23 players with trade kickers have ones worth 15%.

[RELATED: NBA Players With Trade Kickers In 2018/19]

If a player with a 15% trade kicker has $10MM left on his contract and is traded, his bonus would be worth $1.5MM — 15% of $10MM. But the value of a trade kicker declines each passing day during the regular season, since the amount the player receives for the current year of his deal is prorated.

Here’s an example: Milos Teodosic is in the final year of his contract with the Clippers, earning a $6,300,000 salary with a 15% trade kicker. Technically, 15% of $6.3MM is $945K. However, 72 days of the 177-day regular season have already passed, so if Teodosic were traded today, his trade kicker would only apply to the 105 days remaining on his contract. He’ll make $3,737,288 during that stretch, so his 15% trade kicker would result in a bonus worth approximately $561K.

A trade kicker is paid by the team trading the player, and can only be paid out once during the player’s contract. For instance, Jeremy Lin had a trade bonus worth 10%, which he received when the Nets sent him to Atlanta during the 2018 offseason. If Lin is traded again by the Hawks, he wouldn’t get another trade bonus.

A pair of rules related to trade kickers have created some confusion about how the NBA would handle John Wall‘s 15% trade kicker if he’s traded this season. Those two rules are as follows:

• A player can’t receive his full trade bonus if it would take him over his maximum allowable salary. Stephen Curry, Gordon Hayward, and LeBron James are among the players currently earning max salaries who have 15% trade kickers — those bonuses would be voided if any of those players were traded this season.
  • Note: A player can receive a portion of his trade bonus if his salary is worth less than the max and his bonus would take him over his max. This happened last season with Blake Griffin, whose partial bonus increased his salary to his max.
    
• For cap purposes, a trade bonus is spread out over the remaining non-option years on a player’s contract. The exact dispersion depends on what percentage of each season’s salary is fully guaranteed. In basic terms though, if a player with a $3MM trade kicker has two guaranteed years left on his deal, $1.5MM would be applied to each season’s cap hit.
  • Note: In that same scenario, if a player’s second season was only 50% guaranteed, $2MM of his trade kicker would be applied to the first year and $1MM to the second year, to reflect the guarantee proportions. If the player’s second season was non-guaranteed, the full $3MM bonus would hit the cap in year one.
    

In Wall’s case, because he signed a super-max extension that goes into effect in 2019/20, he still has more than $180MM left on his contract, meaning a 15% trade bonus would be worth nearly $30MM. His salary for the 2018/19 season ($19,169,800) is well below his allowable maximum, so he should be eligible to receive that bonus. However, spreading the cap hits across five seasons would push his future salaries well above the max for those seasons, which isn’t allowed. It’s not clear how the NBA would handle that bonus if Wall is traded this season, since that specific situation has never arisen before.

A trade kicker can sometimes complicate salary matching in trades. Although the team trading away the player with the kicker pays the bonus money, that team still only counts the players’ original salary for matching purposes. However, the team acquiring the player must count his new cap figure for matching purposes.

For example, let’s say a player with three years and $30MM left on his contract ($10MM annual cap hits) has a 15% trade kicker. His bonus would work out to $4.5MM, which would be spread out across three seasons, adding $1.5MM to his current-year cap hit. The team acquiring him would view him as an $11.5MM player, while the team trading him would consider him a $10MM player. In some cases, that discrepancy can prevent a deal from working for one side from a salary-matching perspective.

In that scenario, the player is permitted to waive his trade bonus, clearing the way for a deal to work, but he’s under no obligation to do so. A player can waive his trade bonus for any other reason too, if he so chooses.

Here are several other rules related to trade kickers:

• Player and team options aren’t taken into account when calculating trade bonuses, but early termination options are.
• Only the base value of a contract is taken into account when calculating trade bonuses. Incentives aren’t considered.
• Trade kickers can technically be included in rookie contracts, but a player on a rookie deal can’t exceed 120% of his rookie scale amount via a trade bonus, so this is extremely rare.
• A minimum salary contract can include a trade bonus. If the bonus vests, the contract is no longer considered to be a minimum salary deal.
• If a player signs an extension, a trade bonus can be added to or removed from his contract.

Note: This is a Hoops Rumors Glossary entry. Our glossary posts will explain specific rules relating to trades, free agency, or other aspects of the NBA’s Collective Bargaining Agreement. Larry Coon’s Salary Cap FAQ was used in the creation of this post.

An earlier versions of this post was published in 2013 by Chuck Myron.

Photo courtesy of USA Today Sports Images.

When a team releases a player, he doesn’t immediately become a free agent. Instead, the player is placed on waivers, which serves as a sort of temporary holding ground as the other 29 NBA teams decide if they want to try to add him to their roster.

A player remains on waivers for two full days after he is formally cut by his team. During that time, a team can place a waiver claim in an attempt to acquire the player. If two or more clubs place a claim, the team with the worst record takes priority (before December 1, records from the previous season determine waiver order).

If a team claims a player off waivers, it assumes his current contract and is on the hook for the remainder of his salary. The claiming team also pays a $1,000 fee to the NBA office. If no claims are placed on the player, he clears waivers at 4:00pm CT two days after his release and becomes an unrestricted free agent.

While the waiver format is simple enough, not every team will have the salary cap flexibility to make a claim for any waived player it wants. There are only a handful of instances in which a club is able to claim a player off waivers:

• The team is far enough under the salary cap to fit the player’s entire salary.
• The team has a traded player exception worth at least the player’s salary.
• The team has a disabled player exception worth at least the player’s salary, and he’s in the last year of his contract.
• The player’s contract is for one or two seasons and he’s paid the minimum salary.

For instance, if a player with a $7MM salary is waived tomorrow, only five teams would be eligible to place a waiver claim — the Kings have the cap room available to do so, and the Hornets, Nuggets, Pistons, and Thunder each have traded player exceptions worth at least $7MM.

On the other hand, if the Rockets were to release Carmelo Anthony, almost any team would be eligible to place a claim using the minimum salary exception, since he’s on a one-year, minimum-salary contract.

More often than not, waived players go unclaimed. In that case, the player’s original team remains on the hook for the rest of his salary. Unless the player is in the final year of his contract and is waived after August 31, his club has the option of “stretching” his remaining cap hit(s) over multiple years using the stretch provision, which we explain in a separate glossary entry. A team that waives a player and uses the stretch provision on him cannot re-acquire that player until after his contract would have originally expired.

In the case of any player without a fully guaranteed contract, the non-guaranteed portion of a player’s salary is removed from a club’s cap immediately once the player is waived.

When a player is “bought out” by his club, he’s placed on waivers as part of the agreement. He and his team agree to adjust the guaranteed portion of his contract, reducing the amount owed to the player by the team, assuming he clears waivers.

Here are several more notes related to waiver rules:

• Players can be waived and claimed off waivers during the July moratorium.
• A player waived after March 1 is ineligible for the postseason if he signs with a new team.
• A player claimed off waivers can’t be traded for 30 days. If he’s claimed during the offseason, he can’t be traded until the 30th day of the regular season.
• If a player is traded and then is waived by his new team, he cannot re-sign with his old club until one year after the trade or until the July 1 after his original contract would have expired, whichever is earlier.
• A player who has Early Bird or full Bird rights retains Early Bird rights if he’s claimed off waivers.
• If a team makes a successful waiver claim, it doesn’t lose its spot in the waiver order — the 30th-ranked team at the end of a season remains atop the waiver priority list until December 1 of that year, even if that team makes multiple offseason claims.
• A team with a full roster can submit a waiver claim and wouldn’t have to clear a spot on its roster for a claimed player until it is determined that the claim is successful.

Note: This is a Hoops Rumors Glossary entry. Our glossary posts will explain specific rules relating to trades, free agency, or other aspects of the NBA’s Collective Bargaining Agreement. Larry Coon’s Salary Cap FAQ was used in the creation of this post.

An earlier version of this post was published in 2012.

The NBA’s salary cap primarily serves as a way to restrict the amount a team can invest in player salaries in a given year. However, because the league has a soft cap rather than a hard cap, there’s technically no specific figure that clubs are prohibited from exceeding once they go over the cap to re-sign players.

There is, however, a specific threshold on the lower end that teams must meet in each NBA season. The league’s minimum salary floor requires a club to spend at least 90% of the salary cap on player salaries. For instance, with the 2018/19 cap set at $101,869,000, the salary floor for this season is $91,682,100.

If a team finishes the regular season below the NBA’s salary floor for that league year, the penalties levied against that team aren’t exactly harsh — the franchise is simply required to make up the shortfall by paying the difference to its players. For example, if a team finished this season with a team salary of $88,682,100, that team would be required to distribute that $3MM shortfall among its players.

The players’ union determines how exactly the money is divvied up — most recently, players who spent at least 41 games on a team’s roster have received a full share, while players with between 20-40 games on the roster receive a half share. A player can’t exceed his maximum salary as a result of a shortfall payment.

For the purposes of calculating whether a team has reached the minimum salary threshold, cap holds and international buyouts aren’t considered, but players who suffered career-ending injuries or illnesses are included in the count, even if they’ve since been removed from the club’s cap.

Additionally, the NBA made a change in its most recent Collective Bargaining Agreement to prevent teams from circumventing certain rules to reach the salary floor. Under the old CBA, a team that was $8MM below the salary floor could trade a player earning $4MM for a player earning $12MM halfway through the season and be in accordance with minimum team salary rules.

Under the current CBA, only the salary the team actually pays the player counts for minimum team salary purposes. For instance, in the example above, the team would be credited with having paid its original player $2MM for the first half of the season and its new player $6MM for the second half. In that scenario, the club would still be $4MM shy of the salary floor.

For the 2018/19 season, only one team is currently below the salary floor, as the Kings have a team salary of $90,844,422, per Basketball Insiders. If Sacramento’s team salary remains unchanged until the end of the season, the result would be a very modest shortfall of $837,678. That’s an unlikely outcome though — the club is a good bet to reach the floor at some point later in the season via free agent signings and/or trades.

Note: This is a Hoops Rumors Glossary entry. Our glossary posts will explain specific rules relating to trades, free agency, or other aspects of the NBA’s Collective Bargaining Agreement. Larry Coon’s Salary Cap FAQ was used in the creation of this post.

The concept of proration is one used in variety of fields and professions, and isn’t specific to the NBA. The term, which shows up frequently in the league’s Collective Bargaining Agreement, refers to the practice of calculating a figure proportionately.

In the NBA, the most common examples of proration apply to players on non-guaranteed contracts who are waived before their salaries become guaranteed, or players who sign minimum-salary contracts partway through the season. In each instance, the player would receive a prorated portion of his salary based on the number of days he was under contract during the season.

For example, when Tyson Chandler signed with the Lakers on November 6, he received a minimum salary contract. For the 2018/19 season, the minimum salary for a player with Chandler’s experience is $2,393,887, though it would only count against his team’s cap for $1,512,601, as we explain here. However, since Chandler wasn’t with the Lakers since the start of the season, he wouldn’t be entitled to that full minimum salary from the team.

The NBA season is 177 days long and Chandler signed his contract on the 22nd day of the season, meaning his one-year contract will span 156 days. Due to proration, his minimum salary will be worth 156/177th of a full minimum salary. So instead of earning $2,393,887, he’ll make $2,109,867. And instead of counting for $1,512,601 on the Lakers’ books, the cap charge will be 156/177th of that amount: $1,333,140.

If the Lakers had signed Chandler using cap space or a cap exception like the disabled player exception, his salary wouldn’t have been prorated, but the minimum salary exception begins to prorate after the first day of the regular season.

The same principle of proration applies to a player like Ben Moore, who was on a non-guaranteed contract with the Pacers before being waived on November 3. Moore was released on the 19th day of the 2018/19 season, but the NBA also pays players for the two days they spend on waivers, so the young forward was credited with 21 days of service. That means, due to proration, he was entitled to 21/177th of his $1,349,383 salary — that amount worked out to $160,096.

While situations like Chandler’s and Moore’s are the most frequent examples of proration’s impact on NBA finances, there are many more instances where it pops up.

Here’s a quick breakdown of several of those other instances of proration:

• Mid-level and bi-annual exceptions: These exceptions begin to prorate on January 10, declining in value by 1/177th each day until the end of the regular season.
• Trade kickers: If a player with a trade kicker in his contract is traded during the season, the kicker only applies to his remaining salary. Let’s say a player has a 15% trade kicker and an $8MM salary in his contract year and is dealt halfway through the season. His 15% trade kicker would only apply to the $4MM left on his deal, giving him a $600K bonus.
• 10-day contracts: A 10-day salary is prorated based on a full-season salary. Most players on 10-day contracts would earn 10/177th of their minimum salary.
• Two-way contracts: Players on two-way contracts earn a prorated portion of their NBA and two-way salaries depending on how many days they spend in each league. Additionally, if a two-way player is signed during the season, he’ll only be eligible to be with the NBA team for a prorated portion of the typical 45-day limit. For instance, a player who signs a two-way contract at the season’s midway point would be entitled to 23 days at the NBA level.
• Signing bonuses: If a teams gives a player a signing bonus in a free agent contract, that bonus is prorated equally over the guaranteed seasons of the contract for cap purposes. For example, a $4MM signing bonus on a four-year contract would add $1MM to the player’s cap charge for each of the four seasons.
• Salary floor calculations: When calculating a team’s payroll in relation to the league’s minimum salary floor, we count the salary that a team actually pays to a player, rather than the player’s cap hit. For instance, if a team traded for a player on a $12MM contract halfway through the season and kept him the rest of the way, he would count for $6MM toward the salary floor, rather than $12MM.

Note: This is a Hoops Rumors Glossary entry. Our glossary posts will explain specific rules relating to trades, free agency, or other aspects of the NBA’s Collective Bargaining Agreement. Larry Coon’s Salary Cap FAQ was used in the creation of this post.

The poison pill provision isn’t technically a term that is defined in the NBA’s Collective Bargaining Agreement. However, the concept of a “poison pill” has colloquially come to refer to a pair of NBA concepts.

The first of those concepts relates to the Gilbert Arenas Provision, which we’ve explained in a separate glossary entry. When a team uses the Arenas provision to sign an Early Bird restricted free agent to an offer sheet, that team can include a massive third-year raise that is often referred to as a “poison pill.”

Tyler Johnson‘s current deal with the Heat is one contract that fits this bill — the Nets included a third-year raise in their 2016 offer sheet, which Miami matched, so Johnson’s cap hit jumped from $5.88MM in the second year of his contract to $19.45MM in the third year.

However, the concept we’re focusing on today doesn’t involve Johnson, the Arenas provision, or RFA offer sheets. Instead, this second meaning of the “poison pill” relates to players who recently signed rookie scale extensions, something five players did in 2018.

The “poison pill provision” arises if a team extends a player’s rookie scale contract, then trades him before the extension officially takes effect. It’s a rare situation, but it features its own set of rules, since extensions following rookie contracts often create a large gap between a player’s current and future salaries.

For salary-matching purposes, if a player is traded between the time his rookie contract is extended and the following July 1 (when that extension takes effect), the player’s incoming value for the receiving team is the average of his current-year salary and the annual salary in each year of his extension. His current team, on the other hand, simply treats his current-year salary as the outgoing figure for matching purposes.

Let’s use Larry Nance Jr. as an example. Nance signed a four-year, $44.8MM rookie scale extension with the Cavaliers this year, which locks him up through the 2022/23 season. However, he’s only only the books for $2,272,391 in 2018/19.

If the Cavs were to abruptly change course on Nance and decided to trade him this season, the poison pill provision would complicate their efforts. From Cleveland’s perspective, Nance’s current-year cap hit ($2,272,391) would represent his outgoing salary for matching purposes. However, any team acquiring Nance would have to view his incoming value as $9,414,478 — that’s the annual average of the five years and $47,072,391 he has left when accounting for both his new and old contracts.

As we explain in our glossary entry on the traded player exception, NBA rules dictate that over-the-cap teams must send and receive approximately the same amount of salary in any trade. So applying the poison pill provision to a player like Nance and creating a $7MM+ discrepancy between how two trade partners account for him would make salary-matching far more difficult than usual.

Trades involving a player who recently signed a rookie scale extension are already rare. After all, those players are generally young, and a player who signed an extension is promising enough to have warranted a long-term investment. Those aren’t the type of players that teams typically trade. The poison poll provision further disincentivizes a deal involving one of those recently-extended players by complicating salary-matching rules, making those trades even rarer.

In other words, it’s probably a safe bet that we won’t see any of this year’s rookie scale extension recipients – Nance, Devin Booker (Suns), Karl-Anthony Towns (Timberwolves), Justise Winslow (Heat), and Myles Turner (Pacers) – traded before June 30.

Note: This is a Hoops Rumors Glossary entry. Our glossary posts will explain specific rules relating to trades, free agency, or other aspects of the NBA’s Collective Bargaining Agreement. Larry Coon’s Salary Cap FAQ was used in the creation of this post.

An earlier versions of this post was published in 2012 by Luke Adams.

There are a number of ways that teams without salary cap space are able to add players. These players’ salaries still count against the team’s cap figure and are taken into account for tax purposes. However, teams can use these exceptions in lieu of available cap room to acquire players.

When we discuss trades and free agency at Hoops Rumors, we’ll often refer to these salary cap exceptions. In case you’re wondering what we mean when we mention a “Non-Bird exception” or a “bi-annual exception,” we’ve compiled a brief overview for reference. The NBA’s salary cap exceptions under the latest Collective Bargaining Agreement are listed below:

• Bird Exception: If a player has been on the same team for three years (not necessarily full seasons), his team can re-sign him for up to the player’s maximum salary. Generally, a player who changes teams via trade retains his Bird rights, but he loses them if he signs with a new team as a free agent. A Bird player can sign for up to five years with maximum annual raises of 8%.
  • For further reference: Hoops Rumors Glossary: Bird Rights
• Early Bird Exception: If a player has been on the same team for two years (not necessarily full seasons), his team can re-sign him for up to 175% of his previous salary or the average player salary, whichever is greater. Early Bird contracts must be for at least two seasons (no more than four), with maximum annual raises of 8%.
  • For further reference: Hoops Rumors Glossary: Early Bird Rights
• Non-Bird Exception: If a player finishes a season with a team without having earned Bird or Early Bird rights, his team can re-sign him for 120% of his previous salary, 120% of the applicable minimum salary, or – if he’s a restricted free agent – the amount of his qualifying offer. A non-Bird player can sign for up to four years with maximum annual raises of 5%.
  • For further reference: Hoops Rumors Glossary: Non-Bird Rights
• Mid-Level Exception: A non-taxpaying team can offer a player a contract for up to four years with maximum annual raises of 5% using the mid-level exception. The MLE amount for 2018/19 is $8,641,000; it will increase annually at the same rate as the salary cap. This exception can be used on one or multiple players.
  • For further reference: Hoops Rumors Glossary: Mid-Level Exception
• Taxpayer Mid-Level Exception: A taxpaying team can offer a player a contract for up to three years with maximum annual raises of 5% using the mid-level exception. The taxpayer MLE amount for 2018/19 is $5,337,000; it will increase annually at the same rate as the salary cap. This exception can be used on one or multiple players.
  • For further reference: Hoops Rumors Glossary: Mid-Level Exception
• Room Exception: If a team uses room under the cap to sign players, it forfeits its mid-level and bi-annual exceptions. In that case, the team receives this exception, which isn’t available to teams above the cap. After using its cap room, a team can offer a player a contract for up to two years with a maximum raise of 5%. The room exception amount for 2018/19 is $4,449,000; it will increase annually at the same rate as the salary cap. This exception can be used on one or multiple players.
  • For further reference: Hoops Rumors Glossary: Mid-Level Exception
• Bi-Annual Exception: A team can offer a player a contract for up to two years with a maximum raise of 5% using the bi-annual exception. However, it’s only available to teams that remain over the cap and below the tax apron. The bi-annual exception amount for 2018/19 is $3,382,000; it will increase annually at the same rate as the salary cap. This exception can be used on one or multiple players.. As its name suggests, this exception, which isn’t available to taxpaying teams, can only be used every other year.
  • For further reference: Hoops Rumors Glossary: Bi-Annual Exception
• Minimum Salary Exception: A team can offer a player a contract for up to two years worth the applicable minimum salary. A team can also use this exception to trade for minimum-salary players. There is no limit to the number of players a team can acquire using this exception.
  • For further reference: Hoops Rumors Glossary: Minimum Salary Exception
• Rookie Exception: A team can sign its first-round draft picks for up to 120% of the rookie salary scale amount.
  • For further reference: Rookie Scale Salaries For 2019 First Round Picks
• Disabled Player Exception: If a player suffers an injury deemed to be season-ending, a team can be granted this exception by the league. It can be used to sign or trade for a replacement player for one year, and is worth 50% of the disabled player’s salary or the amount of the non-taxpayer mid-level exception, whichever is lesser. This exception, which must be applied for between July 1 and January 15, can only be used once and is forfeited if not used by March 10.
  • For further reference: Hoops Rumors Glossary: Disabled Player Exception
• Traded Player Exception: Any team can replace a traded player – or traded players – simultaneously (in the same transaction) with one or more players whose total salaries amount to no more than 125% of the outgoing salary, plus $100K. For non-taxpaying teams, the incoming value can increase to as high as 175% of the outgoing salary, depending on the amount of that salary. Alternately, both non-taxpaying and taxpaying teams can replace a traded player non-simultaneously (within one year) with one or more players whose total salaries amount to no more than 100% of the traded player’s salary, plus $100K.
  • For further reference: Hoops Rumors Glossary: Traded Player Exception

Note: This is a Hoops Rumors Glossary entry. Our glossary posts will explain specific rules relating to trades, free agency, or other aspects of the NBA’s Collective Bargaining Agreement. Larry Coon’s Salary Cap FAQ was used in the creation of this post.

An earlier version of this post was published in 2012 by Luke Adams.

After the NBA’s biggest-name free agents come off the board, many teams shift their focus to filling out their training-camp rosters. Teams can only carry 15 players on NBA contracts (plus two on two-way deals) during the regular season, but their maximum roster size increases to 20 players in the offseason, allowing clubs to bring a few extra players to camp to audition for a place on the regular-season roster or a spot on the team’s G League affiliate.

Many of those players will sign a contract with an Exhibit 10 clause. Introduced in the NBA’s most recent Collective Bargaining Agreement, Exhibit 10 contracts are one-year deals worth the minimum salary. They don’t come with any compensation protection, but can include an optional bonus ranging from $5K to $50K.

Let’s say an undrafted rookie signs an Exhibit 10 contract with the Knicks that includes a $50K bonus. He attends camp with the Knicks, but is waived before the regular season begins, with New York designating him an affiliate player in order to retain his G League rights. In that scenario, if the rookie elects to play in the G League for the Westchester Knicks and remains with the club for 60 days, he’d be entitled to his full $50K bonus.

The player wouldn’t receive that bonus if he opts to sign with a team overseas after being waived by the Knicks. Essentially, the Exhibit 10 bonus serves as an incentive for players to stick with their team’s G League affiliate — they must spend at least 60 days with the NBAGL club in order to get their bonus.

There’s another scenario in which that undrafted rookie who signs an Exhibit 10 deal with the Knicks would receive his $50K. Exhibit 10 contracts can be converted into two-way contracts, so if New York opted to do that before the season begins, the $50K bonus would turn into a salary guarantee for the player. As soon as his contract becomes a two-way deal, he’s entitled to that bonus, even if the Knicks waive him a week later.

Only teams with a G League affiliate can include an Exhibit 10 bonus in a contract. In 2018/19, the Wizards will become the 27th NBA team with its own affiliate, leaving only the Pelicans, Trail Blazers, and Nuggets on the outside looking in. Those clubs could technically sign players to Exhibit 10 deals, but wouldn’t be able to include bonus money.

Here are a few more notes relating to Exhibit 10 contracts:

• A team can’t carry more than six Exhibit 10 contracts at a time.
• An Exhibit 10 contract can only be converted to a two-way deal before the regular season begins.
• An Exhibit 10 contract that gets converted to a two-way deal can later be converted into a standard NBA contract.
• An Exhibit 10 bonus earned by a player who ends up in the G League or on a two-way contract isn’t counted toward the NBA team’s total salary.

Note: This is a Hoops Rumors Glossary entry. Our glossary posts will explain specific rules relating to trades, free agency, or other aspects of the NBA’s Collective Bargaining Agreement. Larry Coon’s Salary Cap FAQ was used in the creation of this post.