Hoops Rumors Glossary

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.

The Cavaliers have committed only about $75MM in guaranteed money to player salaries for 2016/17, but that doesn’t necessarily mean the team will open $17MM of room against the projected $92MM salary cap. In fact, it’s highly unlikely that the Cavs will have any cap space at all. Each of Cleveland’s own free agents will be assigned a free agent amount or “cap hold” until the player signs a new contract or the Cavs renounce his rights.

The general purpose of a cap hold is to prevent teams from using room under the cap to sign free agents before using Bird rights to re-sign their own free agents. If a team wants to take advantage of its cap space, it can renounce its rights to its free agents, eliminating those cap holds. However, doing so means the team will no longer hold any form of Bird rights for those players — if the team wants to re-sign those free agents, it would have to use its cap room or another kind of cap exception.

The following criteria are used for determining the amount of a free agent’s cap hold:

• First-round pick coming off rookie contract: 250% of previous salary if prior salary was below league average; 200% of previous salary if prior salary was above league average
• Bird player: 190% of previous salary (if below average) or 150% (if above average)
• Early Bird player: 130% of previous salary
• Non-Bird player: 120% of previous salary
• Minimum-salary player: Two-year veteran’s minimum salary, unless the free agent only has one year of experience, in which case it’s the one-year veteran’s minimum.

A cap hold for a restricted free agent can vary based on his contract status. A restricted free agent’s cap hold is either his free agent amount as determined by the criteria mentioned above, or the amount of his qualifying offer, whichever is greater. Cavs combo guard Matthew Dellavedova is eligible for restricted free agency for a second straight offseason this summer. He signed for the value of his qualifying offer last year, and his qualifying offer amount would be $1,434,095 this year. Still, his cap hold is larger, at $2,179,824, because the Cavs will have his Bird rights and his salary of $1,147,276 is well beneath the league average. If Cleveland wants to keep his Bird rights, it’ll have to carry a $2,179,824 cap hold this summer until it either re-signs Dellavedova or he signs elsewhere and the Cavs elect not to match.

The Cavs only have Early Bird rights on LeBron James, but assuming he opts out, as expected, he’ll have a cap hold of as much as $29,861,650, or 130% of this season’s salary. A chance exists that his hold will be slightly lower, because no cap hold can exceed the maximum salary for which a player can sign. So, if the maximum salary for a player with 10 or more years of experience, like James, comes in below that figure, his cap hold will simply be whatever the max is. The projected max for James, based on a $92MM cap, is slightly above $30MM. So, if that happens, the Cavs would get a “discount” of sorts on James’ cap hold, since it would only be $29,861,650, and James is roundly expected to sign for the max. Either way, it won’t much matter for Cleveland, since whatever James’ cap hold is, it’ll wipe out that $17MM worth of would-be cap space, anyway.

An unusual case exists for the Grizzlies and P.J. Hairston, whom they acquired via trade from the Hornets this season. Memphis has his Bird rights, but the Hornets declined the fourth year team option on his rookie scale contract before the season, so the Grizzlies can’t pay him more than what he would have made in the option year, which is $1,253,160. That rule is in place so a team can’t circumvent the rookie scale and decline its option in an effort to give the player a higher salary, and it applies even if the player is traded after the option is declined, as in the case of Hairston. So, rather than coming in at 250% of this year’s salary, as would be the case with most players coming off rookie scale contracts, Hairston’s cap hold will be the option amount: $1,253,160.

If a team holds the rights to fewer than 12 players, cap holds worth the rookie minimum salary ($543,471) are assigned to fill out the roster. So, if a front office chose to renounce its rights to all of its free agents and didn’t have anyone under contract, the team would have 12 holds worth $543,471 on the cap, reducing its total cap space by about $6.5MM.

Cap holds aren’t removed from a team’s books until the player signs a new contract or has his rights renounced by the club. For instance, since Jerry Stackhouse never signed elsewhere after his contract with the Nets expired at the end of the 2012/13 season, and the Nets have never renounced him, Brooklyn still has a minimum salary hold for Stackhouse on its cap. It’s been so many years since the Nets have gone under the cap that there’s been no reason for them to renounce their rights to players who, like Stackhouse, are no longer in the NBA. Keeping those cap holds allows teams some degree of cushion to help them remain above the cap and take advantage of the mid-level exception and trade exceptions, among other advantages afforded capped-out teams. Still, Brooklyn seems likely to at last open cap room this summer, so the Nets will likely renounce the Stackhouse cap hold in July, long after he retired.

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 were published in previous years.

Tuesday 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. More recently, C.J. Watson saw his first NBA action on a pair of 10-day contracts with the Warriors in 2008, and he’s since blossomed into a sought-after backup point guard. He signed a three-year, $15MM deal with the Magic this past offseason.

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.

Andersen’s Heat teammate, former first-round pick Gerald Green, had been out of the league for three years when he made a splash during his pair of 10-day deals with the Nets in 2011/12. That earned him a contract for the rest of the season, and he parlayed 12.9 points and 48.1% shooting in 25.2 minutes per game for the Nets into a three-year, $10.5MM contract with the Pacers the following summer. He took a discount to sign with the Heat for one year at the minimum salary this past offseason, but his revamped defensive game and sizable role in the Heat’s rotation suggest that he’ll command much more in free agency this coming summer.

Still, the 10-day is usually a fleeting glimpse at NBA life for players on pro basketball’s fringe. Only a small fraction of last year’s 10-day signees remain in the league, as I noted last month. Hunter Atkins of The New York Times profiled the player whom Green replaced on the Nets roster, chronicling what turned out to be only a brief passage through the league for 10-day signee Andre Emmett. Lee Jenkins of Sports Illustrated took a similarly revealing look at the life of Zabian Dowdell as he tried to make the most of a 10-day with the Suns in 2010/11. Dowdell hasn’t played in the NBA since that season.

Teams 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 $30,888, or 10/170ths of the full-season rookie minimum salary. A one-year veteran would make $49,709. A minimum-salary 10-day deal with any veteran of two or more seasons would represent a cost of $55,722 to the team. Veterans of greater than two seasons would see more than that, 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 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 just as long in 2016 it was in 2015, so the situation could repeat itself.

Teams may terminate 10-day contracts before they run to term, and that happened on multiple occasions last season, such as when the Sixers ended their 10-day contract with Tim Frazier a day early so they could claim Thomas Robinson off waivers. Players who see their 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.

Teams like the Rockets and Nets, who are perilously close to the hard cap and luxury tax threshold, respectively, may be wary of bringing anybody aboard via 10-day contract. Other teams may make liberal use of 10-day deals, in part because they’re relatively inexpensive. The Clippers, who paid the luxury tax and narrowly ducked their hard cap, handed out seven 10-day contracts last season, more than all but two other teams.

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.

Veterans whom NBA teams have recently released, like Tony Wroten, Russ Smith and Phil Pressey, figure to draw consideration for 10-day contracts, as should notable players who’ve gone unsigned this season, like Carlos Boozer and Glen Davis. D-League standouts like Elliot Williams, Sean Kilpatrick and Jimmer Fredette 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 D-League showcase, which runs this week from Wednesday through Sunday.

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 on January 5th, 2013, January 4th, 2014 and January 5th, 2015.

NBA teams are creating ever closer relationships with their D-League affiliates. All 19 D-League teams have one-to-one NBA affiliates for the 2015/16 season, and more one-to-one partnerships are on the way. NBA teams that have D-League affiliates can use a roster-building tool that often comes into play at the start of the season. These NBA franchises can select “affiliate players” and funnel them to their D-League teams.

An affiliate player is someone who was under contract with an NBA team, was released and cleared waivers, and whose NBA team unilaterally claimed his D-League rights. The last part is key. NBA teams can retain the D-League rights to as many as four players they release, thus keeping them out of the D-League draft (the 2015 D-League draft is scheduled for October 31st) or the waiver system that the D-League uses during the season to determine which of its teams get newly signed players. An NBA team can designate an affiliate player during the season, but usually, teams identify those players at the end of the preseason.

Players released from NBA teams are under no obligation to play in the D-League, regardless of whether their former teams want them to, and affiliate players can sign with any NBA team at any point even if they accept the affiliate player designation. When teams select affiliate players, they’re merely controlling which D-League team they’d play for if they consent to play in the D-League. That’s a limited power, but one that allows franchises to develop players using their own offensive and defensive systems and terminology and under the watchful eye of team-controlled coaches and staff.

The practice requires some patience. Only four of the 46 affiliate players designated at the start of the 2014/15 season are, as the 2015/16 regular season is set to begin, under NBA contract with the franchise that gave them the affiliate player tag. Langston Galloway is probably the most rousing success among them, having started 41 games for New York in 2014/15 after spending the first two months of the season as an affiliate player with the Westchester Knicks. Tyler Johnson of the Heat and James Michael McAdoo of the Warriors are safely on their respective NBA rosters after joining midway through last season, but Jabari Brown is sweating it out today as the Lakers decide whether he or Metta World Peace will be the team’s final preseason cut.

The Lakers wouldn’t have to apply the affiliate player tag to Brown if they cut him, since D-League teams can retain the rights to players who played for them any time within the past two years. That rule looms large. If an NBA team brings five players to training camp and one of them was an affiliate player for the same team the year before, the franchise can tag the four other camp cuts as affiliate players, keep the D-League returning player rights to the fifth guy, and have all of them play for its D-League affiliate. That rarely happens, however. More often, NBA teams bring a player or two to camp whose D-League rights are already owned by another team’s affiliate through that same returning player rule. For instance, the Hawks brought Earl Barron to camp in September and waived him Saturday. They can’t make him an affiliate player because the Suns beat them to it by a year. Phoenix had Barron in camp last fall and designated him as an affiliate player, and the Suns later signed him to the NBA roster on two 10-day contracts and a deal for the rest of the 2014/15 season.

NBA teams are also not allowed to designate anyone who spent less than half the preseason with them as an affiliate player if they also spent time in an NBA camp with a different team, except in one circumstance, as Adam Johnson of D-League Digest points out. Ryan Boatright spent the lion’s share of the preseason with the Nets, who waived him last week. The Pistons signed him shortly after he cleared waivers, then released him two days later. It’s just the sort of last-minute move that the NBA and the D-League had in mind when they stipulated that teams couldn’t sign players just for a few days solely to grab their D-League rights. However, the Pistons are allowed to name Boatright an affiliate player, as they’re reportedly poised to do, because the Nets don’t have a D-League affiliate of their own. Thus, some last-minute “catch-and-release” signings in late October do indeed take place because of the D-League.

Teams without one-to-one affiliates were still allowed to designate affiliate players under the shared affiliate system. That’s how the Pacers tagged C.J. Fair as an affiliate player last season. He spent the year with the Fort Wayne Mad Ants, who were the shared affiliate of 13 NBA teams for the 2014/15 season. The Pacers signed Fair for camp and released him again this year, but since the Mad Ants are now the one-to-one affiliate of the Pacers, Indiana already has his D-League rights.

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 Chris Reichert’s D-League FAQ for Upside & Motor were used in the creation of this post.

The NBA’s annual free agent frenzy begins each July 1st, but most of the deals that happen as July begins can’t become official until a little more than a week passes. The league office uses this period of time, known as the July Moratorium, to complete its audit, which establishes figures like the salary cap, luxury tax threshold and average salary. Free agents are allowed to negotiate with clubs during the moratorium, and they can agree to terms on new contracts, but they are unable to officially sign new deals until the moratorium ends.

The specific dates vary from season to season, but for 2015, the moratorium will last from July 1st to July 8th. As of July 9th, teams can resume business as usual. Still, it’s an odd time for the league to bar formal moves, as teams cut deals during the moratorium at a faster pace than at any other time during the year, even though they can’t file the paperwork. Most agreements made during the moratorium usually withstand the time that passes before they can be consummated, but the moratorium nonetheless leads to awkward situations in which teams can agree to landmark signings and trades but can’t say much about them until days later.

Usually, a deluge of formal announcements follows the end of the moratorium as teams get caught up, though that wasn’t the case in 2014. Much of the league hung on the free agency of LeBron James, until James finally gave word of his choice to rejoin the Cavaliers on July 11th, after the moratorium had already ended. An unusually languid July quickly descended into the usual chaotic deal-making for the next few days, though in this case, it was unencumbered by the moratorium.

Still, there was some business that teams had already accomplished by that point. A few types of signings and acquisitions are permitted during the moratorium. A first-round draft pick can sign a rookie scale contract with the team that drafted him. A second-round draft pick can accept a required tender, which is a one-year, non-guaranteed contract offer for the minimum salary that allows the team to retain its rights to the player. A restricted free agent can accept a qualifying offer from his team. A free agent can sign a minimum-salary contract for one or two seasons. Also, teams are able to claim players off waivers, providing they were waived during the final two days in June.

When the July moratorium ends, all free agents can officially sign contracts. Additionally, the new salary cap figures for the year take effect, and the seven-day period for using the amnesty clause begins.

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 on May 16th, 2012, May 13th 2013 and June 18th, 2014.