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. 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. The criteria are a little more complicated than that though. A player retains his Bird rights in the following scenarios:

• He changes teams via trade, rather than being waived or signing elsewhere as a free agent. For instance, Ramon Sessions is in the third year of his contract. He has been traded twice, from the Timberwolves to the Cavs and then to the Lakers, but will earn Bird rights at season's end because he was never waived during those three seasons.
• He finishes a third season with a team after having only played partial seasons with the club for the first two years (without signing elsewhere in between).

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

• He changes teams via free agency.
• He is waived and claimed by another team on waivers.
• He is selected in an expansion draft.
• His rights are renounced by his team.

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

Although the Bird exception allows teams to exceed the cap, a team cannot necessarily use free cap room to sign free agents and then re-sign its own players via Bird rights. 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). For players coming off a rookie-scale contract, the amounts of those cap holds are 250% and 200%, respectively.

The Celtics, for instance, will have a $15MM cap hold for Ray Allen on their 2012/13 books — 150% of his $10MM salary this season. Boston could clear that $15MM in cap space by renouncing Allen, but then would lose his Bird rights. If the Celtics wanted to re-sign him at that point, they'd have to use either cap room or a different cap exception.

Ultimately, the Bird exception was designed to allow teams to keep their star players. The CBA ensures that teams are always able to re-sign their veteran stars to maximum contracts, 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.

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

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

• Bird Exception: If a player has been on the same team for three years (not necessarily full seasons), his team can re-sign him for up to the player's maximum salary. A player who changes teams via trade retains his Bird rights, but he loses them if he signs with a new team as a free agent. A Bird player can sign for up to five years with maximum annual raises of 7.5%.
• Early Bird Exception: If a player has been on the same team for two years (not necessarily full seasons), his team can re-sign him for up to 175% of his previous salary or the average player salary, whichever is greater. Early Bird contracts must be for at least two seasons (no more than four), with maximum annual raises of 7.5%.
• Non-Bird Exception: If a player has earned neither Bird or Early Bird rights, his team can re-sign him for 120% of his previous salary, 120% of the applicable minimum salary, or, if he's a restricted free agent, the amount of his qualifying offer. A non-Bird player can sign for up to four years with maximum annual raises of 4.5%.
• Mid-Level Exception: A non-taxpaying team can offer a player a contract for up to four years, starting at $5MM with maximum annual raises of 4.5%. This exception can be used on one or multiple players, and the max first-year salary will grow by 3% annually starting in 2013/14.
• Taxpayer Mid-Level Exception: A taxpaying team can offer a player a contract for up to three years, starting at $3MM with maximum annual raises of 4.5%. This exception can be used on one or multiple players, and the max first-year salary will grow by 3% annually starting in 2012/13.
• Bi-Annual Exception: A non-taxpaying team can offer a player a contract for up to two years, starting at $1.9MM with a maximum raise of 4.5%. This exception can be used on one or multiple players, and the max first-year salary will grow by 3% annually starting in 2012/13. As its name suggests, this exception, which isn't available to taxpaying teams, can only be used every other year.
• Mini Mid-Level Exception: If a team uses room under the cap to sign players, it forfeits its mid-level and bi-annual exceptions. In that case, the team receives this exception, which isn't available to teams above the cap. After using its cap room, a team can offer a player a contract for up to two years, starting at $2.5MM with a maximum raise of 4.5%. This exception can be used on one or multiple players, and the max first-year salary will grow by 3% annually starting in 2012/13.
• Minimum Salary Exception: A team can offer a player a contract for up to two years worth the applicable minimum salary. A team can also use this exception to trade for minimum-salary players. There is no limit to the number of players a team can acquire using this exception.
• Rookie Exception: A team can sign its first-round draft picks for up to 120% of the rookie salary scale amount.
• Disabled Player Exception: If a player suffers an injury that will sideline him for the season, a team can be granted this exception by the league. It can be used to sign a replacement player for one year, and is worth 50% of the disabled player's salary or the amount of the non-taxpayer mid-level exception, whichever is lesser. This exception, which must be applied for between July 1st and January 15th, can also be used to acquire a player via trade, and is forfeited if not used within 45 days.
• Traded Player Exception: A non-taxpaying team can replace a traded player simultaneously (in the same transaction) with one or more players whose total salaries amount to no more than 150% of the traded player's salary or the traded player's salary plus $5MM, whichever is lesser. A taxpaying team can replace a traded player simultaneously with one or more players whose total salaries amount to no more than 125% of the traded player's salary. Alternately, both non-taxpaying and taxpaying teams can replace a traded player non-simultaneously (within one year) with one or more players whose total salaries amount to no more than 100% of the traded player's salary. In each case, this exception, which cannot be used to sign a free agent, includes an additional $100,000 of wiggle room.

For further clarification on salary cap exceptions, please visit Larry Coon's invaluable NBA Salary Cap FAQ or check out more detailed explanations in our glossary.