Hoops Rumors Glossary

Players and teams have to meet certain criteria to earn Bird rights and Early Bird rights, but Non-Bird rights are something of a given. They apply to a player who has spent a single season or less with his team, as long as he finishes the season on an NBA roster. Teams can also claim Non-Bird rights on Early Bird free agents if they renounce them. The primary utility in doing so would be so that the team could sign the free agent to a one-year contract, a move that’s not permitted via Early Bird rights.

Teams are eligible to sign their own free agents using the Non-Bird exception for a salary starting at 120% of the player’s previous salary, 120% of the minimum salary, or the amount of a qualifying offer (if the player is a restricted free agent), whichever is greatest. Contracts can be for up to four years, with 5% annual raises.

The cap hold for a Non-Bird player is 120% of his previous salary, unless the previous salary was the minimum. In that case, the cap hold is equivalent to the two-year veteran’s minimum salary, which in 2018/19 will be $1,499,698.

The salary limitations that apply to Non-Bird rights are more severe than those pertaining to Bird rights or Early Bird rights, so in many cases, the Non-Bird exception isn’t enough to retain a well-regarded free agent. For instance, the Heat had Non-Bird rights for James Johnson and Dion Waiters this past summer, since those players had signed one-year deals with Miami in 2016.

The Heat technically would have been able to use Non-Bird rights to go over the cap to sign Johnson and Waiters, but because their 2016/17 salaries were only about $4MM and $3MM, respectively, the club’s ability to offer raises using the Non-Bird exception was extremely limited — 120% of Johnson’s previous salary was just $4.8MM, which wouldn’t have been a competitive offer. In order to get up to the $14MM and $11MM respective starting salaries that Johnson and Waiters received on their new contracts, Miami had to use cap space.

Holding Non-Bird rights on their top free agents didn’t help the Heat, but there are cases in which the exception proves useful. Nene, for example, signed a three-year, $10.95MM deal with the Rockets this offseason using his Non-Bird rights. Nene had initially signed a one-year, $2,898,000 contract with Houston in 2016, so the Non-Bird exception allowed the team to give him 120% of that amount ($3,477,600) in the first year of his new contract, without having to dip into the mid-level or bi-annual 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.

Earlier versions of this post were published in 2012, 2013, 2014, and 2015 by Luke Adams and Chuck Myron.

Bird rights offer teams the chance to sign their own free agents without regard to the salary cap, but they don’t apply to every player. Other salary cap exceptions are available for teams to keep players who don’t qualify for Bird rights. One such exception is the Early Bird, which applies to players formally known as Early Qualifying Veteran Free Agents.

The Bird exception is for players who have spent three seasons with one club without changing teams as a free agent, but Early Bird rights are earned after just two such seasons. Virtually all of the same rules that apply to Bird rights apply to Early Bird rights, with the requirements condensed to two years rather than three. Players still see their Bird clocks restart by changing teams via free agency, being claimed in an expansion draft, or having their rights renounced.

The crucial difference between Bird rights and Early Bird rights involves the limitations on contract offers. Bird players can receive maximum-salary deals for up to five years, while the most a team can offer an Early Bird free agent without using cap space is 175% of his previous salary or 105% of the league-average salary in the previous season, whichever is greater. These offers are also capped at four years rather than five, and the new contracts must run for at least two years (with no second-year options).

Kevin Durant (Warriors), Patrick McCaw (Warriors), and Seth Curry (Mavericks) are among the notable free agents who will have Early Bird rights at the end of the 2017/18 season. In Durant’s case, the Warriors would be able to offer 175% of his current $25MM salary using Early Bird rights, though the team’s offer can’t exceed the maximum salary. Durant’s max salary projects to be just over $35MM, comfortably within the Early Bird limit. However, he would only be able to sign a four-year contract rather than a five-year deal, since he won’t have full Bird rights.

In some instances, teams can benefit from having Early Bird rights instead of full Bird rights if they’re trying to preserve cap space. The cap hold for an Early Bird player is 130% of his previous salary, significantly less than most Bird players, whose cap holds range from 150-300% of their previous salaries.

That helps the Mavericks, since the cap hold for Curry, who is earning just over $3MM this season, will only be about $4MM. If the Mavs reach an agreement to re-sign Curry next July, they could hold off on making it official, keeping his modest cap holds on the books until they use the rest of their cap room. Then they could go over the cap to finalize Curry’s deal using the Early Bird exception.

As for McCaw, he’ll be subject to a special wrinkle involving Early Bird rights, called the Gilbert Arenas Provision, which applies to players who’ve only been in the league for one or two years. We cover the Gilbert Arenas Provision in a separate glossary entry (that glossary entry will soon be updated to reflect changes made in the 2017 CBA, but most of the basic details remain the same).

Finally, one more distinction between Bird rights and Early Bird rights applies to waivers. Players who are claimed off waivers retain their Early Bird rights, just as they would if they were traded. Those who had Bird rights instead see those reduced to Early Bird rights if they’re claimed off waivers. This rule stems from a 2012 settlement between the league and the union in which J.J. Hickson was given a special exception and retained his full Bird rights for the summer of 2012 even though he had been claimed off waivers that March.

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.

Earlier versions of this post were published in 2012, 2013, 2014, 2015, and 2016 by Luke Adams and Chuck Myron.

The Bird exception, named after Larry Bird, is a rule included in the NBA’s Collective Bargaining Agreement that allows teams to go over the salary cap to re-sign their own players, as most NBA fans know. A player who qualifies for the Bird exception, formally referred to as a Qualifying Veteran Free Agent, is said to have “Bird rights.”

The most basic way for a player to earn Bird rights is to play for the same team for at least three seasons, either on a multiyear deal or separate one-year contracts. Still, there are other criteria. A player retains his Bird rights in the following scenarios:

1. He changes teams via trade. For instance, the Pelicans hold DeMarcus Cousins‘ Bird rights as he approaches 2018 free agency, despite just acquiring him in February. His Bird clock didn’t reset when he was traded from Sacramento to New Orleans.
2. He finishes a third season with a team after having only signed for a partial season with the club in the first year. Sean Kilpatrick signed his current contract with the Nets in March of 2016. It’s only a two-year deal, so Kilpatrick won’t qualify for full Bird rights this season, but that 2015/16 season counts as the first year on his Bird clock, even though he was only under contract with the club for about a month.
3. He signed for a full season in year one or two but the team waived him, he cleared waivers, and didn’t sign with another team before re-signing with the club and remaining under contract through a third season. For instance, the Sixers waived Gerald Henderson in June after he spent a single season in Philadelphia. If the club were to re-sign Henderson at some point this season, his Bird clock would move to a second year, rather than resetting.

A player sees the clock on his Bird rights reset to zero in the following scenarios:

1. He changes teams via free agency.
2. He is waived and is not claimed on waivers (except as in scenario No. 3 above).
3. His rights are renounced by his team. However, his Bird rights are restored if he re-signs with that team without having signed with another NBA team. Shabazz Muhammad (Timberwolves) and Udonis Haslem (Heat) were among the free agents who were renounced by their respective teams this past offseason before re-signing with those clubs. They’ve retained their Bird rights.
4. He is selected in an expansion draft.

If a player is waived and claimed off waivers, and he would have been in line for Bird rights at the end of the season, he would retain only Early Bird rights. Meanwhile, a player with Bird rights who re-signs with his previous team on a one-year contract (or a one-year deal with a second-year option) would lose his Bird rights if he’s traded. As such, he receives the ability to veto trades so he can avoid that scenario.

When a player earns Bird rights, he’s eligible to re-sign with his team on a maximum-salary contract for up to five years with 8% annual raises when he becomes a free agent, regardless of how much cap room the team has. The maximum salary will vary for each player depending on how long he has been in the league, but regardless of the amount, a team can exceed the salary cap to complete the deal.

A team with a Bird free agent is assigned a “free agent amount” or cap hold worth either 190% of his previous salary (for a player with a below-average salary) or 150% of his previous salary (for an above-average salary), up to the maximum salary amount. For players coming off rookie scale contracts, the amounts of those cap holds are 300% and 250%, respectively.

The Bulls, for instance, will have a cap hold worth about $9.6MM for Zach LaVine on their 2018/19 books — 300% of his $3.2MM salary for 2017/18. Chicago could renounce LaVine and clear an extra $9.6MM in cap space, but the Bulls would lose his Bird rights if they did that, which would force them to use either cap room or a different cap exception to re-sign him.

Instead, the Bulls will likely use LaVine’s Bird rights and his cap hold strategically, perhaps using their cap space on other free agents and/or trades while LaVine’s $9.6MM cap hold remains on the books. The Bulls could then circle back and use Bird rights to sign LaVine to a contract with a starting salary much higher than $9.6MM.

Ultimately, the Bird exception was designed to allow teams to keep their best players. The CBA ensures that teams are always able to re-sign them to contracts up to the maximum salary, assuming the player is interested in returning and his team is willing to go over the cap.

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.

Earlier versions of this post were published in 2012, 2013, 2014, 2015, and 2016 by Luke Adams and Chuck Myron.

The NBA’s Collective Bargaining Agreement didn’t undergo a significant overhaul during the latest round of negotiations between the league and the players’ union, but the NBA’s new two-way contract represents one major change. The two-way contract will allow clubs to retain the NBA rights for a couple extra players, bumping each team’s maximum roster size from 15 to 17, with those two new spots reserved for players on two-way contracts.

Up until now, teams have had the ability to assign certain players on their NBA rosters to the G League for assignments, but haven’t retained any NBA control over the rest of the players on their NBADL affiliates. Two-way contracts will change that, since they’re essentially G League contracts that allow a player’s NBA team to call him up for NBA assignments and prevent him from being poached by a rival NBA club.

Salary cap guru Larry Coon recently published a primer for two-way contracts over at ESPN.com, so with the help of his breakdown and the new CBA, we’ll present the key details on how these deals work. Let’s dive in…

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Thursday marks the renewal of the annual tradition of the ultimate on-the-job tryout in professional sports. The 10-day contract has been the foot in the door for several players who’ve gone on to lengthy, successful NBA careers, like Anthony Mason, Bruce Bowen, Raja Bell, Kurt Rambis, Howard Eisley and several others. C.J. Watson saw his first NBA action on a pair of 10-day contracts with the Warriors in 2008, and blossomed into a sought-after backup point guard. He signed a three-year, $15MM deal with the Magic in 2015.

Ten-day deals also help veterans make comebacks. Chris Andersen languished in free agency for six months after the Nuggets used the amnesty clause to get rid of him, but a pair of 10-day contracts with the Heat in 2013 kick-started a revival for the Birdman. He wound up signing for the rest of the season that year and played a key role in Miami’s championship run. Andersen reprised that role on a guaranteed minimum-salary contract the next season, and that led the Heat to re-sign him in 2014 to a two-year, $10.375MM deal.

More recently, Tim Frazier parlayed multiple 10-day contracts last year into a two-year, $4MM+ deal with the Hornets over the summer, while Jordan McRae landed with the Cavaliers after signing 10-day deals last year with multiple teams. McRae remains under contract for the defending champions this season. Still, the 10-day is usually a fleeting glimpse at NBA life for players on pro basketball’s fringe — most of last year’s signees aren’t currently in the league.

Beginning on Thursday, January 5, a team can sign a player to as many as two 10-day contracts before committing to him for the rest of the season, or, as in many cases, turning him away.

Ten-day deals are almost always for a prorated portion of the minimum salary, though they can be for more. A minimum-salary 10-day contract for a rookie this season is worth $31,969, or 10/170ths of the full-season rookie minimum salary. A one-year veteran would make $51,449. A minimum-salary 10-day deal for any veteran of two or more seasons would represent a cost of $57,672 to the team.

Veterans with more than two years of NBA experience would earn more than $57,672 on a 10-day contract, but the league would pay the extra freight. However, teams gain no financial advantage if they eschew 10-day contracts with more experienced players to sign rookies or one-year veterans to 10-day deals in an effort to avoid the tax, as those deals count the same as the ones for two-year veterans when the league calculates a team’s salary for tax purposes.

Teams would have to pay slightly more if they sign a player to a 10-day contract and they have fewer than three games on their schedule over that 10-day period. In those cases, the length of the 10-day contract is extended so that it covers three games for the team.

It’s rare that any team would have such a light schedule, since most play at least three games a week, but the rule came into play in February 2015 with the Pistons and John Lucas III. Detroit signed him to a 10-day contract after its final game prior to the All-Star break, which the NBA lengthened last season. The Pistons played only three games in the 13 days that followed the signing, so Lucas was essentially on a 13-day deal. He received 13 days’ worth of prorated minimum salary, meaning the pact was worth more than a standard 10-day contract. The All-Star break will be extended again in 2017, so the situation could repeat itself.

A team may terminate a 10-day contract before it runs to term if it wants to use the roster spot to accommodate a waiver claim, signing, or trade acquisition. Players whose 10-day contracts end early don’t go on waivers, so they become free agents immediately. Still, those players receive their full 10-day salaries, as the contracts are fully guaranteed for the 10 days.

A team like Portland, which is perilously close to the luxury tax, may be wary of bringing anybody aboard via 10-day contract. Other teams will make liberal use of 10-day deals, in part because they’re relatively inexpensive. A year ago, no team handed out more 10-day contracts than the injury-ravaged Grizzlies, who signed eight different players to at least one 10-day deal.

Usually, teams only have one player on a 10-day contract at a time, though they’re allowed to carry as many 10-day contracts as they have players on the inactive list. If a team has 13 players on the active list, it can carry one more 10-day contract than the number of inactive players it has, meaning that if a team has a full 15-man roster, as many as three of those players may be on 10-day deals.

Players whom NBA teams have recently released, like R.J. Hunter and Nicolas Laprovittola, figure to draw consideration for 10-day contracts, as should notable veterans who have gone unsigned this season, such as Jarrett Jack and Carl Landry. D-League standouts like Briante Weber, Ray McCallum, and Jalen Jones could all find paths to the NBA via 10-day contracts, and hopefuls from the D-League will make their cases to scouts at the five-day NBADL showcase, which will take place later this month in Mississauga, Ontario.

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.

Versions of this post were initially published by Chuck Myron on January 5, 2013; January 4, 2014; January 5, 2015; and January 4, 2016.

The most common method over-the-cap teams use to sign free agents from other teams is the mid-level exception, but it’s not the only tool those clubs have to squeeze an extra player onto the payroll. The biannual exception is a way to sign a player who commands more than the minimum salary and less than the mid-level.

As its name suggests, the biannual exception can only be used every other year. Even if a team uses only a portion of the exception, it’s off-limits the following year.

The biannual is available only to limited number of clubs, even among those that didn’t use the biannual the season before. Teams that open cap room forfeit the biannual and all but the smallest version of the mid-level. Additionally, teams lose access to the biannual exception when they go more than $4MM over the tax threshold, exceeding what’s known as the tax apron. So, only teams over the cap but under the tax apron can use the biannual exception.

If a team uses all or part of the biannual exception, it triggers a hard cap for that season. Clubs that sign a player using the biannual can later go under the cap but can’t go over the tax apron at any time during the season once the contract is signed.

The biannual exception provides for a starting salary of $2.203MM in 2016/17. That’s approximately 3% greater than the starting salary in a biannual deal in 2015/16, but with the salary cap projected to rise by more than 30%, the relative value of the biannual will be much lower. The league and the players determined the amount that the biannual exception would be worth each season when they negotiated the collective bargaining agreement in 2011, but the salary cap is tied to year-to-year fluctuations in revenue.

A biannual contract can be for either one or two seasons, with a raise of 4.5% for the second season. Thus, a player who signs in the 2016/17 season can receive a contract worth a total of up to $4,505,135 via the exception. Teams also have the option of splitting the biannual among multiple players, though that happens much less frequently than it does with the mid-level exception, since a split biannual deal wouldn’t entail much more than the minimum salary. The biannual exception starts to prorate on January 10th, decreasing in value by 1/170th each day until the end of the regular season.

Only two teams used the biannual exception in the 2015/16 season, thanks in large measure to the legion of clubs that dipped below the cap. The Hornets signed Jeremy Lin to a two-year deal for the full value of the biannual, with a player option on year two. The Wizards gave their full biannual to Gary Neal, though he signed only a one-year deal. The results couldn’t have been more different, with Lin flourishing as a sixth man while Neal endured injuries, ultimately hitting waivers in March. Lin seems like a cinch to opt out, given the way he upped his market value, and Neal is already off the Wizards roster, but neither team will have access to the biannual this summer.

It’s unlikely that many teams will use the biannual in 2016/17, since so many are once more poised to go under the cap and thus forfeit access to the exception. Still, it could prove a valuable tool for the handful of teams that will be capped out as they seek someone who can do for them what Lin did for the Hornets.

Earlier versions of this post appeared in 2012, 2013, 2014 and 2015.

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 and the Basketball Insiders salary pages were used in the creation of this post.

The mid-level exception is the most common way for NBA teams that are over the salary cap to sign free agents from other clubs for more than the minimum salary. It’s not nearly as valuable as it used to be as the salary cap rises drastically, since the mid-level amounts were set when the league and the players negotiated the last collective bargaining agreement in 2011. The cap fluctuates based on revenue, but the mid-level doesn’t, moving up only in small, predetermined increments each year, so it’s becoming progressively more of “low-level” exception, as I examined in-depth.

Still, it has utility for teams as they build out their rotations. Different forms of the mid-level apply based on a team’s proximity to the cap. The most lucrative kind of mid-level exception is available to teams that are over the cap but less than $4MM above the tax threshold. Still, clubs deep into the tax, and even those under the cap, have access to lesser versions of the mid-level. Here’s a glance at how all three forms of the exception are structured:

For over-the-cap teams:

• Commonly called either the full mid-level exception, the nontaxpayer’s mid-level exception or simply the mid-level exception
• Contract can cover up to four seasons
• First-year salary is worth $5.628MM for 2016/17
• Once used, the team cannot surpass the “tax apron” ($4MM above tax line) for the remainder of the season.

For teams above the cap and the tax apron:

• Commonly called the taxpayer’s mid-level exception
• Contract can cover up to three seasons
• First-year salary is worth $3.477MM for 2016/17

For teams with cap room:

• Commonly called the room exception
• Contract can cover no more than two seasons
• First-year salary is worth $2.898MM for 2015/16

Each form of the mid-level allows for annual raises of up to 4.5% of the value of the first season’s salary. So, here are the maximum amounts a free agent could receive this summer under each of the three forms of the mid-level exception:

Full Mid-Level Exception

• 2016/17: $5,628,000
• 2017/18: $5,881,260
• 2018/19: $6,134,520
• 2019/20: $6,387,780
• Total: $24,031,560

Taxpayer’s Mid-Level Exception:

• 2016/17: $3,477,000
• 2017/18: $3,633,465
• 2018/19: $3,789,930
• Total: $10,900,395

Room Exception

• 2016/17: $2,898,000
• 2017/18: $3,028,410
• Total: $5,926,410

Teams can split the mid-level among multiple players, and that’s a common course of action. Few teams used the mid-level to give out contracts for as much as they could and for as many years as they could to any single player in 2015/16. The Pelicans used parts of their mid-level to sign Dante Cunningham, Alonzo Gee and Bryce Dejean-Jones in the summer of 2015, leaving a chunk still unused as training camp began. They waived Dejean-Jones in the preseason but signed him again in February, using yet another portion of the mid-level to do so.

Players drafted near the top of the second round often sign contracts for part of the mid-level because it allows teams to give them contracts worth more than the minimum salary, if only slightly so, that cover more than the two years the minimum salary exception provides. The Heat gave 2015 No. 40 pick Josh Richardson only the minimum salary, but they used the taxpayer’s mid-level to sign him for three years, so they’ll have full Bird rights instead of only Early Bird rights with him when his contract ends.

Some front offices prefer to leave all or part of their mid-level exception unused so they can lock up intriguing developmental players to long-term contracts toward the end of the season. Sean Kilpatrick impressed the Nets on a pair of 10-day contracts, prompting Brooklyn to use a leftover part of its taxpayer’s mid-level exception to re-sign him to a three-year contract in March. Had the Nets already used their entire mid-level, they wouldn’t have been able to sign him to a contract longer than two years.

The Kilpatrick signing also illustrates another aspect of the mid-level exception. The Nets weren’t a taxpaying team when they signed Kilpatrick, but because they’d already used parts of the taxpayer’s mid-level on Shane Larkin and Wayne Ellington, they couldn’t upgrade to the more valuable nontaxpayer’s mid-level. However, Brooklyn could have used the nontaxpayer’s mid-level on Kilpatrick if it hadn’t signed anyone using the taxpayer’s mid-level while it was over the tax apron.

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 and the Basketball Insiders salary pages were used in the creation of this post.

Earlier versions of this post appeared in 2012, 2013, 2014 and 2015.

Players and teams have to meet certain criteria to earn Bird rights and Early Bird rights, but Non-Bird rights are something of a given. They apply to players who’ve spent a single season or less with their teams, as long as they end the season on an NBA roster. Teams can also claim Non-Bird rights on Early Bird free agents if they renounce them. The primary utility in doing so would be so that the team could sign the free agent to a one-year contract, a move that’s not permitted via Early Bird rights.

Teams are allowed to sign their own free agents using the Non-Bird exception for a salary starting at 120% of the player’s previous salary, 120% of the minimum salary, or the amount of a qualifying offer (if the player is a restricted free agent), whichever is greatest. Contracts can be for up to four years, with 4.5% annual raises. The cap hold for a Non-Bird player is 120% of his previous salary, unless the previous salary was the minimum. In that case, the cap hold is equivalent to the two-year veteran’s minimum salary, which is $980,431 for the 2016/17 season.

The salary limitations that apply to Non-Bird rights are more severe than those pertaining to Bird rights or Early Bird rights, so in many cases, the Non-Bird exception isn’t enough to keep a well-regarded free agent. For instance, the Raptors will have Non-Bird rights with Bismack Biyombo if he turns down a player option worth slightly less than $2.941MM for next season. Biyombo showed his value as an efficient rebounder and one of the league’s toughest interior defenders this season. The Raptors can only use Non-Bird rights to sign him for 120% of his salary from this past season without dipping into another exception or opening cap space, and it’s unlikely they’ll have much room with more than $69.9MM in guaranteed salary on the books and DeMar DeRozan poised to enter free agency, too. Biyombo made just $2.814MM this year, and Non-Bird rights would provide for just $3,376,800 next season, much less than what the best backup centers signed for a year ago.

Non-Bird rights might not be of aid to the Raptors and Biyombo, but there are cases in which the exception proves helpful. Alan Anderson is coming off an injury-marred season for the Wizards, who are hoping to preserve as much cap space as possible. Anderson’s cap hold will be only 120% of the $4MM salary he received on the one-year contract he signed with Washington in the summer of 2015. Thus, the Wizards wouldn’t sacrifice much flexibility if, instead of renouncing him, they retained his Non-Bird rights, thus keeping his $4.8MM cap hold on the books so they can use Non-Bird rights to re-sign him once they’ve used their cap space on other free agents.

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.

Earlier versions of this post appeared in 2012, 2013, 2014 and 2015.

Bird rights offer teams the chance to sign their own free agents without regard to the salary cap, but they don’t apply to every player. Other salary cap exceptions are available for teams to keep players who don’t qualify for Bird rights. One such exception is the Early Bird, which applies to players formally known as Early Qualifying Veteran Free Agents.

The Bird exception is for players who’ve spent three seasons with one club without changing teams as a free agent, but Early Bird rights are earned after just two such seasons. Virtually all of the same rules that apply to Bird rights apply to Early Bird rights, with the requirements condensed to two years rather than three. Players still see their Bird clocks restart by changing teams via free agency, being claimed in an expansion draft, or having their rights renounced.

The crucial difference between Bird rights and Early Bird rights involves the limitations on contract offers. Bird players can receive maximum-salary deals for up to five years, while the most a team can offer an Early Bird free agent without using cap space is 175% of his previous salary or 104.5% of the league-average salary in the previous season, whichever is greater. These offers are also capped at four years rather than five, and the new contracts must run for at least two years.

The Heat will have to reckon with having only Early Bird rights instead of full Bird rights on Hassan Whiteside this summer. Miami has only about $48MM in guaranteed salary against a projected $92MM cap for next season, but cap holds for Dwyane Wade and Luol Deng add about $43MM to the team’s books. Whiteside, who’s rapidly emerged while on a two-year deal for the minimum salary, is likely to command a deal at or near his maximum-salary of an estimated $21.7MM. The Heat would have to open cap space to sign him for more than 104.5% of the average salary, which is expected to be only about a third of the value of Whiteside’s max. The Heat face a stiff challenge if they’re to re-sign the foursome of Whiteside, Wade, Deng and Joe Johnson, another key contributor who’s hitting free agency this year.

Their Southeast Division rivals in Atlanta can sympathize. The Hawks fostered DeMarre Carroll‘s development on a cheap two-year contract and had to choose between re-signing him and Paul Millsap when Carroll entered Early Bird free agency last year. A similar predicament faces the Hawks this summer, when Al Horford and 2014 bargain signee Kent Bazemore hit the market. The Hawks have full Bird rights with Horford, as they did with Millsap last year, but re-signing Horford at his max of an estimated $26MM would add to the more than $51.7MM in guaranteed salary already on Atlanta’s books. Other cap holds would limit the Hawks to no more than about $12MM of space for Bazemore, with whom they only have Early Bird rights and can’t pay more than roughly $7MM without using cap room. Bazemore didn’t break through quite as profoundly as Carroll did with the Hawks, but it’ll be a player’s market in free agency this summer, and Atlanta will be hard-pressed to keep both Horford and Bazemore.

Teams can nonetheless benefit from having Early Bird rights instead of full Bird rights when they’re trying to preserve cap space. The cap hold for an Early Bird player is 130% of his previous salary, significantly less than most Bird players, who take up either 150% or 190% of their previous salaries. That helps the Heat, since the cap hold for Deng, an Early Bird free agent who isn’t due for the sort of raise Whiteside is, will be only about $13MM, not much higher than his salary of roughly $10MM for this season.

Another distinction between Bird rights and Early Bird rights applies to waivers. Players who are claimed off waivers retain their Early Bird rights, just as they would if they were traded. Those who had Bird rights instead see those reduced to Early Bird rights if they’re claimed off waivers. This rule stems from a 2012 settlement between the league and the union in which J.J. Hickson was given a special exception and retained his full Bird rights for the summer of 2012 even though he’d been claimed off waivers that March.

A special wrinkle involving Early Bird rights, called the Gilbert Arenas Provision, applies to players who’ve only been in the league for one or two years. We covered the Gilbert Arenas Provision in another glossary entry.

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.

Earlier versions of this post were initially published in 2012, 2013, 2014 and 2015.

The Bird exception, named after Larry Bird, is a rule included in the NBA’s Collective Bargaining Agreement that allows teams to go over the salary cap to re-sign their own players, as most NBA fans know. A player who qualifies for the Bird exception, formally referred to as a Qualifying Veteran Free Agent, is said to have “Bird rights.” The most basic way for a player to earn Bird rights is to play for the same team for at least three seasons, either on a multiyear deal or separate one-year contracts. Still, there are other criteria. A player retains his Bird rights in the following scenarios:

1. He changes teams via trade. This wrinkle is fairly well-known. For instance, soon-to-be free agent Courtney Lee is in the fourth and final year of his contract, but he’s been traded twice since he signed, from the Celtics to the Grizzlies in 2014 and from the Grizzlies to the Hornets this year. He nonetheless retains his Bird rights for the offseason ahead because he hasn’t been waived.
2. He finishes a third season with a team after having only signed for a partial season with the club in the first year. Troy Daniels signed a contract with the Rockets in February 2014 and re-signed with the team the following summer to a two-year contract. He’s been traded twice and is now with the Hornets, just like Lee, but that doesn’t matter. He’ll still have Bird rights this summer.
3. He signed for a full season in year one or two but the team waived him, he cleared waivers, and didn’t sign with another team before re-signing with the club and remaining under contract through a third season. Eric Moreland will have Bird rights next summer if he remains under contract through next season, even though he cleared waivers from the Kings this past summer. That’s because Sacramento re-signed him to a two-year deal about a month later.

However, a player sees the clock on his Bird rights reset to zero in the following scenarios:

1. He changes teams via free agency.
2. He is waived and is not claimed on waivers (except as in scenario No. 3 above).
3. His rights are renounced by his team. However, his Bird rights are restored if he re-signs with that team without having signed with another NBA team. The Mavericks renounced Dirk Nowitzki‘s rights before re-signing him two years ago, but they’d still have his Bird rights in the unlikely event Nowitzki opts out of his contract this summer.
4. He is selected in an expansion draft.

If a player is waived and claimed off waivers, and he would have been in line for Bird rights at the end of the season, he would retain only Early Bird rights, unless he was waived via the amnesty provision.

When a player earns Bird rights, he’s eligible to re-sign with his team on a maximum-salary contract for up to five years with 7.5% annual raises when he becomes a free agent, regardless of how much cap room the team has. The maximum salary will vary for each player depending on how long he’s been in the league, but regardless of the amount, a team can exceed the salary cap to complete the deal.

A team with a Bird free agent is assigned a “free agent amount” or cap hold worth either 190% of his previous salary (for a player with a below-average salary) or 150% of his previous salary (for an above-average salary), up to the maximum salary amount. For players coming off rookie scale contracts, the amounts of those cap holds are 250% and 200%, respectively.

The Pistons, for instance, will have a cap hold of nearly $8.18MM for Andre Drummond on their 2016/17 books — 250% of his approximately $3.272MM salary this season. Detroit could renounce Drummond and clear an extra $8.18MM in cap space, but the Pistons would lose his Bird rights if they did that, which would force them to use either cap room or a different cap exception to re-sign him. That won’t happen. Instead, Detroit plans to use his Bird rights and his cap hold strategically, committing its cap space on either outside free agents, trades or both while Drummond’s $8.18MM cap hold remains on the books. The Pistons intend to circle back and use Bird rights to sign Drummond to a maximum-salary contract, or match a max offer sheet, with a salary likely in excess of $20MM for next season.

Ultimately, the Bird exception was designed to allow teams to keep their best players. The CBA ensures that teams are always able to re-sign them to contracts up to the maximum salary, assuming the player is interested in returning and his team is willing to go over the cap.

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.

Versions of this post were initially published in 2012, 2013, 2014 and 2015.