Hoops Rumors Glossary

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.

Early termination options were a factor in 2014, when LeBron James, Carmelo Anthony, Chris Bosh and Dwyane Wade all exercised the early termination options in their contracts to hit free agency. In 2015, this sort of option is largely a vestige of rules from previous collective bargaining agreements. Thaddeus Young and Jared Dudley are the only players with early termination options for 2015/16, and only Deron Williams and Carmelo Anthony have contracts that include this type of option for any subsequent season.

Early termination options, or ETOs, are opportunities for players to free themselves from their contracts before they run to term, as the name suggests. They’re essentially player options, but with a few tweaks. They were originally designed to give players a second chance to escape from their deals, since player options can only cover one season. That’s why James, Bosh and Wade all had early termination options for 2014/15 and player options for 2015/16 as part of the contracts that they opted out of in 2014. All three signed under the previous collective bargaining agreement, just like Dudley and Young. The existing collective bargaining agreement prevents deals from running longer than five seasons, and since early termination options may only be included in five-year pacts, a contract can no longer contain both an ETO and a player option.

That ETOs are only allowed in five-year deals also means that most of the players who will hold ETOs from now on will be marquee names, since few others sign deals that cover five seasons. Going forward, ETOs will be exclusively for free agents who re-sign with their teams via Bird rights, since there’s no other way to obtain a five-year contract in the current collective bargaining agreement. That was the case with Anthony when he re-signed with the Knicks in 2014 and with Williams in 2012, when he was the most sought-after free agent on the market before re-upping with the Nets. Both signed their contracts under the current collective bargaining agreement rules.

Perhaps one of the most notorious ETOs belonged to Dwight Howard. Now, he doesn’t have an ETO in his contract with the Rockets, and he couldn’t have received one anyway, since he signed it under the existing collective bargaining agreement and changed teams as he did so. His previous contract contained one, but when the 2012 trade deadline came and rumors swirled about his future with the Magic, he formally agreed not to exercise it, thus giving up the chance to hit free agency that summer. It was an odd move, in part because players with ETOs don’t have to tell the league or their teams that they’re not going to use them. They can simply keep silent on the matter through the option deadline, which is June 29th unless the team and player negotiated an earlier date, and remain under contract. Players with ETOs only have to give notice by the option deadline if they’re using them to opt out. The opposite is true with player options; those who have player options and want to remain under contract have to say so by the option deadline. Otherwise, they become free agents.

ETOs allow teams and players slightly more room for negotiation than standard player options do, since the salary in a player option year can’t be any lower than in the previous season. There’s no such rule with an ETO, so players can have their contracts front loaded, with an ETO season at a reduced salary around as insurance against an injury or decline in play. If the player is still performing at a high level after four seasons, he can exercise the early termination option to hit free agency and seek another lucrative contract. Teams may also benefit from this rule, similarly using the cheaper fifth season as protection against a drop-off in the player’s production. Still, no existing contract with an ETO is structured this way.

A player who signs a deal with a trade kicker stands to benefit if the contract also includes an early termination option. A trade kicker is a bonus that a player receives when he’s traded, and it’s usually equal to a percentage of the money remaining on the deal. Standard player option seasons don’t count toward trade kickers, but seasons covered by ETOs do.

Another difference between player options and ETOs rarely comes into play. If a player opts out using a standard player option, he can still sign an extension before hitting free agency. That’s not the case with ETOs. However, most players make formal decisions on these options not long before becoming free agents, leaving little time to negotiate extensions. Veteran extensions usually aren’t beneficial to players under the current collective bargaining agreement anyway, so there’s little incentive to choose a player option over an ETO just to gain more flexibility in signing an extension.

ETOs probably won’t disappear completely from the NBA landscape, as the deals Williams and Anthony signed proved that there are still circumstances in which they’re desirable in the NBA’s current landscape. Yet unless rules change during the next labor negotiations, don’t expect to see too many of these options.

Here’s a look at the only early termination options in existence as of May 2015:

Thaddeus Young, Nets — $10,221,739 for 2015/16
Jared Dudley, Bucks — $4.25MM for 2015/16
Deron Williams, Nets — $22,331,135 for 2016/17
Carmelo Anthony, Knicks — $27,928,140 for 2018/19

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. 

An earlier version of this post appeared on March 11, 2014.

The minimum salary exception is something of a last resort for capped-out teams seeking to add players, as well as for players seeking NBA contracts, but it’s the most commonly used cap exception. It allows an over-the-cap team to sign a player to a one- or two-year minimum-salary deal, as the name suggests. Teams can use the exception multiple times, allowing clubs that have spent all of their other exceptions an avenue to add to their rosters. It also allows for the acquisition of minimum-salary players via trade, and players signed via the minimum salary exception don’t count as incoming salary for salary-matching purposes.

Players are entitled to varying minimum salaries based on how long they’ve been in the NBA. In 2014/15, a player with no prior NBA experience was eligible for a $507,336 minimum salary, while a player with 10 or more years of experience was eligible for $1,448,490. Over the course of the current collective bargaining agreement, the minimum salary will increase each season, as Larry Coon’s CBA FAQ outlines. For 2015/16, the breakdown is as follows:

Years of experience — minimum salary
0 — $525,093
1 — $845,059
2 — $947,276
3 — $981,348
4 — $1,015,421
5 — $1,100,602
6 — $1,185,784
7 — $1,270,964
8 — $1,356,146
9 — $1,362,897
10 or more — $1,499,187

The numbers demonstrate the wide disparity between the minimum salary for rookies and for long-tenured players. A minimum-salary veteran of 10 or more seasons will earn almost three times as much as a rookie making the minimum next season. The NBA doesn’t want clubs to shy away from signing qualified veterans, so the league reimburses teams for a portion of a minimum-salary player’s cost if he has two or more years of experience, as long as the contract is a one-year deal. For instance, when the Wizards re-signed 12-year veteran Drew Gooden to a one-year deal for 2014/15 using the minimum salary exception, the contract called for a salary of $1,499,187, but the team’s cap hit was just $947,276. The league reimburses the Wizards for the remaining $551,911.

Most salary cap exceptions can only be used once each season. When a team uses its full mid-level exception to sign one or more players, the club can no longer use that exception until the following season. Unlike the mid-level and other cap exceptions, the minimum salary exception can be used any number of times in a single season. The Nets, for example, used the minimum salary exception to sign five players who ended the 2014/15 season on the team’s roster.

The vast majority of 10-day contracts are for the minimum salary, and often the minimum salary exception is the only way for clubs to accommodate any 10-day deals. Teams used the minimum salary exception to sign 48 players to 10-day contracts during the 2014/15 season.

Many exceptions begin to prorate on January 10th, but the minimum salary exception prorates from the first day of the regular season. Teams often take advantage of this to sign players for cheap at the end of the season primarily so they can use them to help salaries match in a trade over the summer, since minimum-salary players do count as outgoing salary for matching purposes.

For example, the Kings signed David Stockton on the fourth day from the end of the 2014/15 regular season. The Kings used the minimum salary exception to sign Stockton to a two-year contract that covered the final four days of the 2014/15 season and all of 2015/16. The 2015/16 portion is non-guaranteed, so the only guaranteed money in the deal was Stockton’s prorated minimum salary, equal to 4/170ths of $507,336. Stockton faces an uphill battle to make the Kings opening-night roster in 2015/16, but if the Kings make a trade over the summer, they can include Stockton’s contract as part of the swap to make the salaries match, allowing the team that acquires Stockton to do the same in another trade or simply waive his non-guaranteed contract at no cost before the 2015/16 season begins. The Kings didn’t necessarily sign Stockton with the idea of trading him, but the minimum salary exception gives the team plenty of flexibility to do so.

Earlier versions of this post appeared on May 7th, 2012, April 28th, 2013 and June 10th, 2014.

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 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 can use 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 becomes unavailable the following year.

The biannual exception is available only to limited number of clubs, even among those that didn’t use the biannual the season before. Teams with player salaries, cap holds and cap exceptions that add up to less than the salary cap lose their biannual exception, as well as their full mid-level exception and any trade exceptions. 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’t go over the tax apron at any time during the season in which the contract is signed.

The biannual exception provides for a starting salary of $2.139MM in 2014/15. That’s approximately 3% greater than the starting salary in a biannual deal this past season, and the starting salary of the biannual exception will continue to rise by about 3% each year under the collective bargaining agreement. A biannual contract can be for either one or two seasons, with a raise of 4.5% for the second season. Teams also have the option of splitting the exception 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 pro-rate on January 10th.

Five teams used the biannual exception in 2014/15, the same number of teams that spent it in 2013/14. The Spurs had the biannual available for use last summer when they gave Aron Baynes a one-year contract equivalent to the value of the starting salary for a biannual deal, but San Antonio used part of its mid-level instead, preserving the chance to use the biannual again this year. Here’s a list of each team that used the biannual for 2014/15 and the players to whom they committed it:

• Rockets — Josh Smith
• Clippers — Jordan Farmar
• Grizzlies — Beno Udrih
• Trail Blazers — Steve Blake
• Kings — Ramon Sessions

Those five teams are ineligible to sign a player via the biannual in 2015/16. That’s true for Houston even though Smith only signed a one-year contract, for Portland even if Blake opts out, for the Clippers and Kings even though Farmar and Sessions are no longer with those respective teams, and Memphis even if it waives Udrih’s partially guaranteed deal.

Earlier versions of this post appeared on April 23rd, 2012, May 1st, 2013 and May 27th, 2014.

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. Teams can make use of the mid-level every season, and they can split it among multiple players. Different mid-level exceptions apply based on a team’s proximity to the cap.

The most valuable 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 less lucrative versions of the mid-level. Here’s a glance at how all three forms of the exception are structured:

For teams with cap room:

• Commonly called the room exception
• Contract can cover no more than two seasons
• First-year salary is worth $2,814,000 for 2015/16

For over-the-cap teams:

• Commonly called either the full mid-level exception or the non-taxpayer’s mid-level exception
• Contract can cover up to four seasons
• First-year salary is worth $5,464,000 for 2015/16
• 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 $3,376,000 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:

Room Exception

• 2014/15: $2,814,000
• 2015/16: $2,940,630
• Total: $5,754,630

Non-Taxpayer’s MLE

• $5,464,000
• $5,709,880
• $5,955,760
• $6,201,640
• Total: $23,331,280

Taxpayer’s MLE:

• $3,376,000
• $3,527,920
• $3,679,840
• Total: $10,583,760

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 2014/15. Spencer Hawes (non-taxpayer’s), Bojan Bogdanovic (taxpayer’s), Kirk Hinrich (room), Mike Miller (room), Jameer Nelson (room) and Udonis Haslem (room) were the only players to sign for the full values of the various mid-level exceptions this past season.

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 on April 24th, 2012, May 10th, 2013 and May 11, 2014.

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 permitted to sign their own free agents using the Non-Bird exception for a salary starting at 120% of the player’s previous salary or 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 in 2015/16 is $947,276.

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 Pacers have Non-Bird rights with Rodney Stuckey, who signed a one-year, minimum salary contract with the team in the summer of 2014 after having spent several years with the Pistons. Indiana can only use Non-Bird rights to sign him for 120% of the 2015/16 minimum salary without dipping into cap space or another exception. Stuckey was the third-leading per-game scorer for the Pacers this season, so it’s reasonable to suspect that he’s in line for a heftier raise than his Non-Bird rights can provide.

Non-Bird rights might not be of help to the Pacers and Stuckey, but there are cases in which the exception proves useful. Josh Smith signed a $2.077MM deal for the rest of the season to join the Rockets in December after the Pistons waived him. Houston can offer up to $2,492,400 for 2015/16, 120% of his 2014/15 salary, without using cap space or another exception. Smith will already be raking in more than $5MM from his stretched Pistons contract and he and the Rockets have mutual interest in a new deal. A Non-Bird signing would probably come in below market value for Smith, but the forward would still see a healthy NBA income and allow the Rockets to preserve other mechanisms for adding players in their quest for a title.

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 on April 20th, 2012, April 26, 2013 and June 16th, 2014.