Hoops Rumors Glossary

Several players will sign summer contracts in the weeks ahead, and by definition, those contracts are non-guaranteed. Some of those deals, called Exhibit 9 contracts, will contain even fewer assurances for the player, but teams can only sign players to Exhibit 9’s under specific circumstances.

Standard NBA contracts ensure that if a player is hurt while performing for the team, his salary is guaranteed until he recovers or the end of the season, whichever comes first. Teams can waive Exhibit 9 contracts at any time should the player get hurt and owe a mere $6K.

Since most training camp invitees wind up getting waived before the start of the season, Exhibit 9’s are a vehicle for teams to avoid the sort of situation that befell the Clippers last year, when Maalik Wayns suffered a preseason knee injury. It was a non-guaranteed contract, but not an Exhibit 9, so the Clippers had to carry him on their roster into the regular season. The deal for Wayns was to have become fully guaranteed for the season if the Clippers failed to waive him by the end of December 1st, and he was still unable to play at that point. He gave the Clippers a break when he agreed to push the guarantee date back to January, and the team eventually waived him in advance of that deadline once he had recovered. Still, the injury cost the Clippers an extra month’s worth or so of salary that they may never have intended to pay out. The Clippers were luxury taxpayers last season, compounding the cost of Wayns’ injury.

Exhibit 9’s must be for one season, and they must be for the minimum salary. Just about every summer contract is a minimum-salary arrangement, but many of them stretch three or four seasons, as teams look to take advantage of rules that make lengthy deals more team-friendly. Still, such benefits have a price, as the Wayns example proved.

Teams must have 14 players on the roster before signing anyone to an Exhibit 9. Sometimes, there are players who are curiously released just at the start of training camp, before they have any chance to play their way on to the team. Such was the case with Patrick Christopher and Kalin Lucas last season. The Bulls signed the pair on September 12th and waived them on October 2nd, the second day of camp. As Mark Deeks of ShamSports explained, the Bulls signed them to non-Exhibit 9 deals to bring their roster to 14 and facilitate the use of Exhibit 9’s on the players they wished to have compete for a spot on the opening-night roster. They released Christopher and Lucas before they had a chance to get hurt.

Christopher agreed to a deal Friday with the Grizzlies, who already had 14 players under contract, so there’s a strong chance he’s receiving an Exhibit 9 this time. That’ll give him a chance to at least show what he can do against NBA competition in the preseason in an effort to make it to opening night, even if all the team owes him would be $6K if he gets hurt.

Just as with summer contracts, teams need not have the cap room or exception space to sign a player to an Exhibit 9, as long as they create the necessary room if they keep the player into the regular season. That allowance wouldn’t come into play in most circumstances, since the minimum-salary exception is all that’s necessary to have room for an Exhibit 9. Still, Exhibit 9’s are handy tools for clubs dealing with hard caps. The unintended imposition of guaranteed salary that an injury to a non-Exhibit 9 player might incur could put a hard-capped team in a difficult spot, one in which it might have to waive or trade another player to accommodate someone it merely intended to bring to camp.

The limited liability of Exhibit 9’s help create opportunities for the sort of player who teams would otherwise deem too much of a long shot to make the roster and not worth the risk of having to pay him throughout the season. Still, these deals open up fringe NBA prospects to medical expenses that $6K wouldn’t be enough to cover, just for a chance to compete for a spot at the end of the bench come November.

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 July moratorium is a period at the start of each NBA season during which teams aren’t permitted to make trades or, in most cases, sign free agents. The specific dates vary from season to season, but for 2014, the moratorium will last from July 1st to July 9th. As of July 10th, teams can resume business as usual.

Each new NBA season officially begins on July 1st, which is also the day that players on expiring contracts become free agents. However, before players can sign with new teams, the NBA must 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 can agree to terms on new contracts, but they are unable to officially sign a new deal until the moratorium ends.

Still, there are some types of signings and acquisitions that are permitted during the July 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 contract offer that allows a team to retain its rights to a drafted 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.
• 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.

Versions of this post, written by Luke Adams, were initially published on May 16th, 2012 and May 13th 2013.

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 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 greater. 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.

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 Mavs have Non-Bird rights with Devin Harris, who signed a one-year, minimum salary contract with the team in the summer of 2013 after playing with the Hawks in 2012/13. Dallas can only use Non-Bird rights to sign him for 120% of what he made in 2013/14. The guard nearly signed a three-year, $9MM contract in 2013 with the Mavs before a toe injury scuttled the deal, so it’s reasonable to suspect that Harris is in line for a heftier raise than his Non-Bird rights can provide. That would force the Mavs to use another exception or cap room if they’re to re-sign him, which could prove tricky, given the team’s plans to use cap space to attract marquee free agents.

Non-Bird rights might not be of help to the Mavs and Harris, but there are cases in which the exception proves useful. Jermaine O’Neal signed a one-year, $2MM deal with the Warriors in the summer of 2013 after finishing up 2012/13 with the Suns. Golden State can offer up to $2.4MM for 2014/15, 120% of his 2013/14 salary. That gives the Warriors an advantage over other teams for a still-valuable backup who’ll probably command more than the minimum 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.

Earlier versions of this post, written by Luke Adams, appeared on April 20th, 2012 and April 26, 2013.

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. 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, without the players being counted for salary-matching purposes.

Players are entitled to varying minimum salaries based on how long they’ve been in the NBA. In 2013/14, a player with no prior NBA experience was eligible for a $490,180 minimum salary, while a player with 10 or more years of experience was eligible for $1,399,507. Over the course of the current collective bargaining agreement, the minimum salary will increase each season, as Larry Coon’s CBA FAQ outlines. For both this season and next season, the breakdown is as follows:

The graph demonstrates 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 isn’t a multiyear deal. For instance, when the Knicks signed 13-year veteran Kenyon Martin for 2013/14 using the minimum salary exception, he earned $1,399,507, but the team’s cap hit was just $884,293. The league reimburses the Knicks for the remaining $515,214.

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 four players who ended the season on the team’s roster.

The vast majority of 10-day contracts are for the minimum salary, and it’s the minimum salary exception that allows clubs to accommodate those 10-day deals. Teams used the minimum salary exception to sign 41 players to 10-day contracts during the 2013/14 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.

For example, the Knicks signed Lamar Odom on the last day of the 2013/14 regular season, even though he wasn’t healthy enough to play in the team’s game that night, and even though the team had already been eliminated from the playoffs. The Knicks used the minimum salary exception to sign Odom to a two-year contract that covered the final day of the 2013/14 season and 2014/15. The 2014/15 portion was non-guaranteed, so the only guaranteed money in the deal was Odom’s prorated minimum salary, equal to 1/170th of 1,399,507. Odom doesn’t stand much of a chance to make the Knicks next season, but if the Knicks make a trade over the summer, they can include Odom’s contract as part of the swap to make the salaries match if necessary, allowing the team that acquires Odom to do the same in another trade or simply waive his non-guaranteed contract at no cost before the 2014/15 season begins.

Earlier versions of this post, written by Luke Adams, were published on May 7th, 2012 and April 28th, 2013.

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.

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. Still, there are other salary cap exceptions available for teams to keep players who don’t qualify for Bird rights. One such exception is the Early Bird, available for players formally known as Early Qualifying Veteran Free Agents.

The Bird exception requires a player to spend three seasons with his 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 limits 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 is 175% of his previous salary or 104.5% of the league-average salary, 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.

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 have 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.

Teams can 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.

One example of a player who will have Early Bird rights this summer is Kirk Hinrich of the Bulls. Hinrich is coming off the second season of a two-year deal with Chicago after having finished the season before with Atlanta. The Bulls can use the Early Bird exception this summer to offer up to 175% of his salary from this year, which would be $7,103,250. It’s likely that will be more than 104.5% of the league average salary, which will probably be close to $6MM when the league calculates the figure during the July Moratorium. Those Early Bird rights might come in handy for Hinrich, who figures to battle D.J. Augustin for the backup job behind Derrick Rose. Augustin only has Non-Bird rights.

A special wrinkle involving Early Bird rights, called the Gilbert Arenas Provision, applies to players who’ve only been in the league for 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, which were written by Luke Adams, appeared on April 19th, 2012 and April 24th, 2013.

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. They must use their cap room to sign players. 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 $2.077MM in 2014/15. That’s approximately 3% greater than the starting salary in a biannual deal this past season, and the figure 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. The bi-annual exception becomes pro-rated starting on January 10th, so it’s rarely used for late-season signees.

Five teams used the biannual exception in 2013/14, the most since 2009/10, as I noted last summer. Those five — the Nuggets, Wizards, Timberwolves, Warriors and Pacers — are ineligible to sign a player via the biannual in 2014/15. That’s true for Golden State even though Jermaine O’Neal only signed a one-year contract, for Denver even if Nate Robinson opts out, and for Washington even though the team traded Eric Maynor.

Previous versions of this post appeared on April 23rd, 2012 (by Luke Adams) and May 1st, 2013.

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.