Hoops Rumors Glossary

It’s not uncommon in many major professional sports for a player to negotiate a contract that includes a no-trade clause, which prohibits him from being traded – either at all or to certain specific teams – without his consent. However, no-trade clauses are extremely rare in the NBA.

When the Wizards signed Bradley Beal to a new contract in 2022 that included a no-trade clause, Beal became just the 10th player in NBA history to receive that perk.

In order to qualify for a no-trade clause, a player must meet the following criteria:

• He must be signing a free agent contract, not an extension.
• He must have at least eight seasons of NBA experience.
• He must have spent at least four seasons with the team he’s signing with.

This last point is the most malleable of the three. In order to qualify for a no-trade clause, a player doesn’t necessary need to have spent the past four consecutive seasons with his team — he just needs to have spent at least four seasons with that team at some point.

For example, if LeBron James were to become a free agent next summer and decided to sign with the Heat, he could negotiate a no-trade clause into his new contract, since he spent four years in Miami from 2010-14.

Additionally, a partial season can be counted as one of those four seasons a player needs to spend with a team in order to qualify for a no-trade clause. For instance, if Jordan Clarkson had become a free agent this offseason, he would’ve been eligible to negotiate a no-trade clause with the Jazz, who traded for him during the 2019/20 season. Clarkson has only been in Utah for three full years and part of a fourth season, but that’s enough to meet the criteria.

Still, those three requirements are enough to eliminate a no-trade clause as an option for many players. One prominent recent example is Jaylen Brown. Although Brown has spent more than four years with the Celtics, he has only been in the NBA for seven seasons and is signing an extension rather than a free agent contract, so a no-trade clause wasn’t available to him.

A player who has a no-trade clause in his contract and consents to a trade retains the right to veto a trade when he joins his new team. So Beal’s no-trade clause remains in effect now that he’s a member of the Suns.

Although explicit no-trade clauses are rare, there are a couple other scenarios in which a player can receive an implicit no-trade clause, meaning his consent is still required in order to trade him.

First, a player who re-signs with his previous team on a one-year contract, or a two-year deal with an option year, is given no-trade protection for the rest of that league year — or until his second-year option is exercised.

Heat forward Kevin Love and Suns wing Josh Okogie are among the players who will fall into this group in 2023/24.

Here are a few more notes related to these criteria:

• A player who meets these criteria and still decides to consent to a trade will lose his Bird or Early Bird rights at the end of the season and will instead be deemed to have Non-Bird rights.
• Although those criteria don’t apply to players on two-way contracts, they do apply to players who accept standard (ie. non two-way) one-year qualifying offers as restricted free agents. So Hornets forward Miles Bridges will have the right to veto a trade in ’23/24.
• The NBA’s new Collective Bargaining Agreement allows a player who re-signs with his former team on a one-year contract (or two-year deal with an option) to waive his ability to veto a trade. A handful of players have done so this offseason, including Lakers guard D’Angelo Russell and Nuggets guard Reggie Jackson. They’re eligible to be traded without their approval in 2023/24.

Second, a player who signs an offer sheet as a restricted free agent and has that offer matched by his previous team has the ability to veto a trade for a full calendar year. That means Trail Blazers swingman Matisse Thybulle and Sixers big man Paul Reed will have de facto no-trade protection until next July.

While explicit no-trade clauses in the NBA are rare, these criteria that give players veto rights for a year at a time aren’t uncommon at all, and often end up applying to non-stars, giving them a little control over their own professional futures.

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.

After the NBA’s biggest-name free agents come off the board, many teams shift their focus to filling out their training camp rosters. Teams can only carry 15 players on NBA contracts (plus three on two-way deals) during the regular season, but their maximum roster size increases to 21 players in the offseason, allowing clubs to bring a few extra players to camp to audition for a place on the regular season roster or a spot on the team’s G League affiliate.

Many of those players will sign a contract with an Exhibit 10 clause. Introduced in the NBA’s 2017 Collective Bargaining Agreement, Exhibit 10 contracts are one-year deals worth the minimum salary. They don’t come with any compensation protection, but can include an optional bonus worth as little as $5K and – in 2023/24 – as much as $75K.

Let’s say an undrafted rookie signs an Exhibit 10 contract with the Jazz that includes a $75K bonus. He attends camp with the Jazz, but is waived before the regular season begins, with Utah designating him an affiliate player in order to retain his G League rights. In that scenario, if the rookie elects to play in the G League for the Salt Lake City Stars and remains with the club for 60 days, he’d be entitled to his full $75K bonus.

The player wouldn’t receive that bonus if he opts to sign with a team overseas after being waived by the Jazz. Essentially, the Exhibit 10 bonus serves as an incentive for players to stick with their team’s G League affiliate — they must spend at least 60 days with the NBAGL club in order to get their bonus.

There’s another scenario in which that undrafted rookie who signs an Exhibit 10 deal with the Jazz would receive his $75K. Exhibit 10 contracts can be converted into two-way contracts before the regular season begins, so if Utah opted to do that, the $75K bonus would turn into a salary guarantee for the player. As soon as his contract becomes a two-way deal, he’s entitled to that bonus, even if the Jazz waive him a week later.

The maximum Exhibit 10 bonus will increase in future seasons at the same rate as the NBA salary cap. For instance, if the cap rises by 10% in 2024/25, the maximum Exhibit 10 bonus would rise by 10% too, from $75,000 to $82,500.

Only teams with a G League affiliate can include an Exhibit 10 bonus in a contract. In 2023/24, the Trail Blazers will become the 29th NBA team with its own affiliate, leaving only the Suns on the outside looking in (they’re aiming to get an NBAGL team in place by ’24/25). Phoenix could technically sign players to Exhibit 10 deals, but wouldn’t be able to include bonus money.

Exhibit 10 contracts don’t count against a team’s salary cap during the offseason. However, they would begin to count against the cap if a team decides to keep a player on an Exhibit 10 contract into the regular season, essentially converting his deal to a standard one-year, minimum-salary deal.

Although they’re not technically required to, virtually every Exhibit 10 contract also contains an Exhibit 9 clause, which provides a team protections when a player on a non-guaranteed training camp contract suffers an injury. If a team wants to sign a player to a deal that includes both an Exhibit 9 and Exhibit 10 clause, it must already be carrying at least 14 players on standard contracts.

Here are a few more notes relating to Exhibit 10 contracts:

• A team can’t carry more than six Exhibit 10 contracts at a time.
• An Exhibit 10 contract can only be converted to a two-way deal before the regular season begins.
• An Exhibit 10 contract that gets converted to a two-way deal can subsequently be converted into a standard NBA contract.
• An Exhibit 10 bonus earned by a player who ends up in the G League or on a two-way contract isn’t counted toward the NBA team’s total 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 were published in 2018 and 2019.

When an NBA team selects a player in the first round of the draft, there’s never any concern about how the player will be signed, regardless of how far over the salary cap the team might be. The rookie scale exception allows teams to sign as many first-round picks as they need to, within a predetermined salary range, without requiring cap room.

However, there hasn’t historically been a similar cap exception for second-round picks. That means clubs intent on locking up their second-rounders to three- or four-year contracts have had to use cap space or a portion of the mid-level exception to do so. If a team wanted to give its second-round pick more than the minimum salary, it would require cap room, the mid-level, or another exception such as the room or bi-annual.

In the 2023 Collective Bargaining Agreement, the NBA and NBPA addressed this issue by adding a new second-round pick exception, which looks like a win for both sides. Teams will have more freedom to sign their young players to multiyear contracts without having to worry about carving out cap room or exception money for them.

Players, meanwhile, don’t have to worry that their new team’s cap situation might force them to accept a minimum-salary contract or a two-way deal. Of course, some late second-rounders will still sign a two-way deal or for the minimum salary, but a team will no longer be able to point to its lack of spending power to explain why that’s the only offer on the table.

Like the rookie scale exception, the second-round pick exception isn’t limited to a single use. It can be deployed as many times as needed in a given league year.

The second-round exception can be used to sign a player to either a three-year contract that includes a third-year team option or a four-year contract that features a fourth-year team option. Here’s what the salary structure looks like:

Three-year deal

• The first year can be worth up to the minimum salary for a player with one year of NBA experience.
• The second and third years are worth the second- and third-year minimum salaries for a rookie.
• The third year is a team option.

As our chart of minimum salaries shows, in 2023/24, the maximum three-year salary for a contract with this structure would be about $5.9MM. Here’s the year-by-year breakdown (option year in italics):

Four-year deal

• The first year can be worth up to the minimum salary for a player with two years of NBA experience.
• The second year can be worth up to the second-year minimum salary for a player with one year of experience.
• The third and fourth years are worth the third- and fourth-year minimum salaries for a rookie.
• The fourth year is a team option.

In 2023/24, the maximum four-year salary for a contract with this structure would be nearly $8.8MM. Here’s what it looks like from year to year (option year in italics):

In any deal that uses this four-year contract structure, the salary increase or decrease between the first and second season can’t exceed 5%. For instance, a team wouldn’t be permitted to negotiate a contract that starts at the rookie minimum ($1,119,563) and jumps to $2,120,693 in year two.

Players who are signed using the second-round pick exception won’t count against a team’s cap between July 1 and July 30 of their first season. That will allow teams to preserve all the cap room they need until July 31 without having to worry about their second-rounders cutting into it. And it will position those players to sign their first NBA contracts before taking part in Summer League games.

The introduction of the second-round exception doesn’t mean that teams must use it to sign their second-round picks. They’re still permitted to use cap room or another exception to negotiate deals with those players. That would be necessary in situations where the player has the leverage to command a salary greater than the two-year veteran’s minimum.

This has already happened a couple times in 2023/24. Second-round picks Vasilije Micic (Thunder) and Sasha Vezenkov (Kings) have reportedly agreed this offseason to three-year contracts worth $23.5MM and $20MM, respectively.

Both players are experienced EuroLeague stars who will be arriving in the NBA several years after being drafted in the second round, so their new deals will exceed what a team can offer using the second round pick exception. They’ll be signed using either cap space or the room exception.

Finally, it’s worth noting that no matter how his NBA career plays out, Kings rookie wing Colby Jones has already earned a minor claim to fame by being the first player to ever sign a contract that uses the second-round 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.

The NBA’s maximum salary is determined by a player’s years of NBA experience. Players with between zero and six seasons under their belts are eligible for a starting salary worth up to 25% of the salary cap. That figures increases to 30% for players with seven to nine years of NBA experience, and to 35% for players with 10+ years of service.

However, there are certain scenarios in which a player can achieve a higher maximum salary than his years of service dictate. When a player who would normally qualify for the 30% max becomes eligible for a starting salary worth up to 35% of the cap before he gains 10+ years of NBA experience, he can sign a Designated Veteran contract, also known as a “super-max” deal.

A player who has seven or eight years of NBA service with one or two years left on his contract becomes eligible for a Designated Veteran contract if he meets the required performance criteria.

A Designated Veteran contract can also be signed by a player who is technically a free agent if he has eight or nine years of service and meets the required performance criteria.

However, a player can’t sign a Designated Veteran deal with a new team — only his current team. If he has been traded at any time since his first four years in the NBA, he becomes ineligible for such a deal. Players like Donovan Mitchell, Domantas Sabonis, and Lauri Markkanen are no longer eligible for that reason. Even if they meet the required performance criteria, the fact that they’ve been traded in recent years disqualifies them.

Speaking of that performance criteria, here’s what it looks like. At least one of the following must be a true for a player to be eligible for a Designated Veteran contract:

• He was named to an All-NBA team in the most recent season, or in two of the last three seasons.
• He was named NBA MVP in any of the three most recent seasons.
• He was named NBA Defensive Player of the Year in the most recent season, or in two of the last three seasons.

Given the exclusivity of the MVP and Defensive Player of the Year awards, players who qualify for a Designated Veteran contract do so most often by earning All-NBA nods. For instance, Celtics wing Jaylen Brown became eligible for a super-max extension earlier this month when he was named to the All-NBA Second Team.

Brown and his Celtics teammate Jayson Tatum are the only players currently eligible to sign Designated Veteran contracts, and Brown is the only player who can do so during the 2023 offseason. Tatum has met the performance criteria but doesn’t have quite enough service time to sign a super-max extension, so he’ll have to wait until after the 2023/24 season.

As outlined above, if the Celtics were to trade Brown (or Tatum), he would no longer be super-max eligible.

Designated Veteran contracts are different than Designated Rookie contracts, which in turn are slightly different than Rose Rule deals. The Rose Rule allows players with fewer than seven years of NBA experience to qualify for contracts that begin at 30% of the cap instead of 25%, as we outline in a separate glossary entry.

Here are a few other rules related to Designated Veteran contracts:

• Even if a player qualifies for a Designated Veteran contract, his team isn’t obligated to start its extension offer at 35% of the cap. The player is eligible for a salary up to that amount, but the exact amount is still a matter for the two sides to negotiate. For example, after becoming super-max eligible, Rudy Gobert signed a contract with the Jazz that began at just over 31% of the cap.
• A Designated Veteran extension can’t exceed six years, including the number of years left on the player’s contract. So if a player signs a Designated Veteran extension when he has two years left on his current contract, he could tack on four new years to that deal.
• A player signing a Designated Veteran contract as a free agent can’t sign for more than five years.
• A Designated Veteran extension can only be signed between the end of the July moratorium and the last day before the start of the regular season.
• If a player signs a Designated Veteran contract, he is ineligible to be traded for one year.
• Under the 2017 Collective Bargaining Agreement, a team wasn’t permitted to carry more than two players on Designated Veteran contracts at a time. However, that rule won’t carry over to the 2023 CBA.

Our list of the players who have signed Designated Veteran contracts since their inception in 2017 can be found right here.

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.

A previous version of this glossary entry was published in 2018.

Under the NBA’s old Collective Bargaining Agreement, which was in effect through the 2016/17 season, a player’s full cap hit was used for salary-matching purposes in trades, whether or not his salary was guaranteed. If a player had an $10MM salary with a partial guarantee of $1MM, his outgoing salary in a trade was the same as it would have been for a player who had a fully guaranteed $10MM contract.

That’s no longer the case, however. Now, only the guaranteed portion of a player’s contract counts for outgoing salary purposes in a trade, limiting the appeal of non-guaranteed salaries as trade chips.

This detail is crucial for determining how much salary a team can acquire in a trade — unless a team is under the cap, the amount of salary it sends out in a trade dictates how much salary it can take back. The amount of salary an over-the-cap team can acquire in a trade ranges from 125% to 175% of its outgoing salary, depending on exactly how much salary the team is sending out and whether or not the team is a taxpayer.

Under the old system, it might make sense for a cap-strapped club to trade a player with a guaranteed salary for a player earning an equivalent non-guaranteed salary — the cap-strapped club could then waive that newly-acquired player to cut costs. That’s no longer a viable strategy.

Complicating matters further is the fact that a team can’t simply circumvent the new rules by trading a player before a league year ends on June 30, then having his new team waive him once his new non-guaranteed cap hit goes into effect on July 1. After the end of the regular season, a player’s outgoing salary for trade purposes is the lesser of his current-year salary and the guaranteed portion of his salary for the following season.

Here’s a practical example: Chris Paul‘s deal with the Suns featured a fully guaranteed salary of $28.4MM in 2022/23, with only $15.8MM of $30.8MM guaranteed for ’23/24. Between the end of the Suns’ season and June 28 – which is when Paul’s full ’23/24 salary will become guaranteed – his outgoing salary for matching purposes is just $15.8MM, but his incoming salary for his new team would be $30.8MM.

Paul is far from the only player who could be affected by these trade rules this summer. Nets forward Royce O’Neale, Jazz big man Kelly Olynyk, Clippers guard Eric Gordon, Lakers center Mohamed Bamba, and Magic wing Gary Harris are among the many players who have partially guaranteed or non-guaranteed salaries for 2023/24 and won’t make great trade candidates unless those guarantees are increased.

Last offseason, when the Hawks agreed to send Danilo Gallinari to the Spurs in their trade for Dejounte Murray, Gallinari’s cap charges were $20.5MM for 2021/22 and $21.5MM for ’22/23, which should have been more than enough to account for Murray’s incoming salary ($15.4MM for ’21/22; $16.6MM in ’22/23). But Gallinari’s 2022/23 salary was only partially guaranteed for $5MM, which wouldn’t have been satisfactory to match Murray’s full cap hit, so Atlanta and San Antonio had to increase that partial guarantee in order to make the deal legal.

To paint a complete picture of exactly how these new rules work, let’s assume that a free agent signs a two-year, $24MM contract during the summer of 2023. His cap hit in each year is $12MM, but the first season of the contract is partially guaranteed for $3MM, while the second year is fully non-guaranteed. Here’s how it would count, for trade purposes, as outgoing salary:

1. From the date of the signing until the one-quarter mark of the 2023/24 season:
   • $3MM
   • Note: Due to other CBA rules, the player wouldn’t become trade-eligible until at least December 15, 2023 anyway.
2. From the one-quarter mark of the 2023/24 regular season until salaries become guaranteed on January 10, 2023:
   • A prorated amount of the salary based on the player’s earnings to date.
   • Note: The player would earn 1/174th of his $12MM salary per day; so 60 days into the season, his outgoing salary in a trade would be $4,137,931 (60/174ths of $12MM).
3. From January 10, 2024 until the 2024 trade deadline:
   • $12MM
4. From the day after the team’s 2023/24 season ends until the start of the 2024/25 regular season:
   • $0
5. From the start of the 2024/25 regular season until salaries become guaranteed on January 10, 2025:
   • A prorated amount of salary based on earnings to date.
   • Note: The player would once again earn 1/174th of his $12MM salary per day; so 10 days into the season, his outgoing salary in a trade would be $689,655 (10/174ths of $12MM).
     
6. From January 10, 2025 until the 2025 trade deadline:
   • $12MM

This change to the NBA’s trade rules hasn’t stopped teams from tacking on non-guaranteed years to the end of certain players’ contracts, since those non-guaranteed salaries still provide flexibility. However, we’re not seeing teams construct contracts with non-guaranteed cap hits solely for trade purposes like we sometimes used to.

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.

As Larry Coon explains in his invaluable CBA FAQ, the term “base year compensation” technically no longer shows up in the NBA’s Collective Bargaining Agreement, and hasn’t since 2011. A relic of past agreements, the base year compensation rule was intended to prevent teams from signing free agents to new contracts that were specifically intended to facilitate salary-matching in trades.

While the base year compensation rules have mostly been adjusted and/or removed from the CBA in recent years, there’s still one situation where they apply. Teams have to take them into account when completing sign-and-trade deals.

The BYC rules apply to a player who meets all of the following criteria in a sign-and-trade:

• He is a Bird or Early Bird free agent.
• His new salary is worth more than the minimum.
• He receives a raise greater than 20%.
• His team is at or above the cap immediately after the signing.

If the player meets those criteria and is included in a sign-and-trade deal, his outgoing salary for matching purposes is considered to be his previous salary or 50% of his new salary, whichever is greater. For the team he is being signed-and-traded to, his incoming figure for matching purposes is his full new salary.

Here are a couple specific examples to help make things a little clearer:

Let’s say the Nets want to sign-and-trade Cameron Johnson this offseason. He’s a Bird free agent, his new salary will be well above the minimum, and Brooklyn projects to be an over-the-cap team. Having made $5,887,899 in 2018/19, Johnson figures to receive a raise significantly higher than 20% — his next deal could easily start at or above $20MM. So he meets the BYC criteria.

In a scenario where he signs a deal with a $22MM starting salary as part of a sign-and-trade, Johnson’s salary for matching purposes from the Nets’ perspective would be $11MM, which is 50% of his new salary (that amount is greater than his previous salary). From his new team’s perspective, Johnson’s incoming figure would be his actual salary, $22MM.

James Harden is another top free agent who would meet the BYC criteria if he’s signed-and-traded by the Sixers this offseason. If he gets a maximum salary contract – projected to be worth $46.9MM for a player with his NBA experience – Harden’s outgoing salary for matching purposes would be $33MM, the amount he made in 2022/23 — that figure would be higher than 50% of his new salary.

Often, a team acquiring a player via sign-and-trade doesn’t have the cap room to sign the player outright, or else there would be little incentive to negotiate a sign-and-trade. That means salary-matching is required, which can be complicated by base year compensation rules.

In the scenario outlined above, the Nets wouldn’t be able to take back more than $16MM in salary in exchange for Johnson due to the league’s matching rules. That number would dip to $13.85MM if Brooklyn’s team salary is above the tax apron.

However, in order to take on $22MM in incoming salary, Brooklyn’s hypothetical trade partner – assuming they’re over the cap – would have to send out at least $17MM in order to account for those salary-matching rules themselves.

The gap between the salary-matching figures from the two teams’ perspectives complicates sign-and-trade talks, requiring both clubs to include additional pieces to make the deal work. A third team could even be necessary to make the numbers line up.

One recent example of two teams navigating base year compensation rules to complete a sign-and-trade occurred last September, when the Cavaliers sent Collin Sexton to the Jazz as part of the Donovan Mitchell blockbuster. Sexton’s first-year salary was $16.5MM, which was the amount Utah had to account for when matching salaries. But from Cleveland’s perspective, Sexton’s outgoing salary was just $8.25MM, half of that amount, since he met the BYC criteria.

In packaging Sexton with Lauri Markkanen and Ochai Agbaji, the Cavs’ outgoing salary for matching purposes was $28.6MM, which was enough to accommodate Mitchell’s $30.9MM salary. From Utah’s perspective, the three incoming players were worth $36.9MM in incoming salary when taking into account Sexton’s full cap hit. But the Jazz were permitted to take back up to approximately $38.7MM (125% of Mitchell’s salary, plus $100K), so the deal worked for both sides.

The base year compensation concept doesn’t surface all that often, due to the specific criteria that must be met. However, it looms large over sign-and-trade attempts involving free agents who receive significant raises, reducing the likelihood of teams finding a deal that can be legally completed.

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 salary information from Basketball Insiders was used in the creation of this post.

Previous versions of this post were published in 2019 and 2022.

The Mavericks have a little less than $104MM in guaranteed money committed to player salaries for 2023/24. However, even though next season’s salary cap is expected to come in at $134MM, Dallas won’t begin the 2023 offseason with $30MM+ in cap room to spend.

In fact, the Mavericks technically won’t open the new league year with any cap space at all. Each of Dallas’ own free agents will be assigned a free agent amount – or “cap hold” – until the player signs a new contract or the Mavericks 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 the rights to its own 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: 300% of the player’s previous salary if prior salary was below league average; 250% of previous salary if prior salary was above league average.
• Bird player: 190% of previous salary (if below league 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.
• Two-way player: One-year veteran’s minimum salary.

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.

No cap hold can exceed the maximum salary for which a player can sign. For example, the cap hold for a Bird player with a salary above the league average is generally 150% of his previous salary, as noted above. But for someone like Mavericks star Kyrie Irving, whose cap charge was $39,204,557 this season, 150% of his previous salary would be nearly $59MM, well beyond his projected maximum salary.

Instead, Irving’s cap hold will be equivalent to the maximum salary for a player with 10+ years of NBA experience. If we assume a cap of $134MM, that figure works out to $46.9MM.

One unusual case involves players on rookie contracts whose third- or fourth-year options are declined. The amount of their declined option becomes their cap hold, and if the player’s team wants to re-sign him, his starting salary can’t exceed that amount.

For instance, the Jazz declined Udoka Azubuike‘s 2023/24 fourth-year option last fall. As a result, Utah won’t be able to offer Azubuike a starting salary this offseason worth more than $3,923,484, the amount of that option. That figure will also be his cap hold.

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. It applies even if the player is traded after his option is declined, but only to the club the player is part of at season’s end. Any team besides the Jazz could offer Azubuike a starting salary greater than $3,923,484 this offseason.

If a team holds the rights to fewer than 12 players, cap holds worth the rookie minimum salary are assigned to fill out the roster. So, even if a front office chooses to renounce its rights to all of its free agents and doesn’t have any players under contract, the team wouldn’t be able to fully clear its cap. An incomplete roster charge in 2023/24 projects to be worth $1,102,929, meaning a team without any guaranteed salary or any other cap holds would have closer to $121MM in cap room than $134MM due to its 12 rookie minimum holds.

A player who has been selected in the draft but has not yet officially signed his rookie contract only has a cap hold if he was a first-round selection. A cap hold for a first-round pick is equivalent to 120% of his rookie scale amount, based on his draft position. An unsigned second-round pick doesn’t have a cap hold.

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 example, the Warriors are still carrying cap holds on their books for retired players like David West and Matt Barnes, who never signed new contracts since playing for Golden State.

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. If and when the Warriors want to maximize their cap room, they’ll renounce West and Barnes, but they’ve remained over the cap – and haven’t needed to remove those holds – since those players became free agents in 2017.

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 by Luke Adams and Chuck Myron.

There are many NBA players technically on maximum salary contracts, but most of those players didn’t earn identical salaries this season, making the league’s “maximum salary” something of a misnomer. While each NBA player has a maximum salary that he can earn in a given season, that number varies from player to player, with a handful of factors playing a part in determining the exact figure.

The primary factor in determining a player’s maximum salary is his years of service. If a player has been in the NBA for no more than six years, he can earn up to 25% of the salary cap in the first year of his deal. Players with seven to nine years of experience can earn up to 30%, while veterans with 10 or more years in the NBA are eligible for up to 35% of the cap. In 2022/23, the salary cap is $123,655,000, meaning the maximum salaries are as follows:

The figures above explain why Zach LaVine, who signed a maximum salary contract with the Bulls last July following his eighth NBA season, earned a salary of $37,096,500 this season. But they don’t explain why Suns star Devin Booker, who is also in that 7-9 year window and is on a max contract of his own, made just $33,833,400.

The reason Booker’s maximum salary is a few million shy of LaVine’s is that those league-wide maximum salary figures only apply to the first year of a multiyear contract.

When a player signs a maximum contract, he can receive annual raises of up to either 8% or 5%, depending on whether he signs with his previous team or a new team. So by the third, fourth, or fifth year of his contract, he could be earning significantly more or less than his updated max for that season, depending on the rate the salary cap has been increasing and whether or not he has moved into a new “years of service” group.

Booker signed his first maximum salary contract extension in 2018 and it went into effect in 2019/20, when he had fewer than six years of NBA experience. Although he has received annual 8% raises since then, those raises haven’t been enough to keep up with the annual cap growth and with his move into the 7-9 year window. As a result, he earned about $3.26MM less than his actual max in 2022/23, despite being on a “max contract.”

Booker signed a new contract extension last summer that will go into effect in 2024/25, at which point he’ll receive a major pay bump and surpass LaVine’s annual earnings.

Here are a couple more ways a player’s usual maximum salary can fluctuate:

• A free agent’s maximum salary is always at least 105% of his previous salary. For example, Warriors star Stephen Curry is earning $48,070,014 this season. He’s under contract for three more years, but if he were eligible for free agency this offseason, he’d be eligible to receive a starting salary of up to $50,473,515 (105% of this year’s salary), even though that figure will easily exceed 35% of the 2023/24 cap.
• In certain situations, players eligible for new contracts can earn the maximum salary for the level above the one they’d typically fall into. A player receiving a designated rookie extension can earn up to 30% of the cap instead of 25% if he meets certain criteria. A veteran can become eligible to earn up to 35% of the cap instead of 30% if he meets the same criteria, which are related to MVP, Defensive Player of the Year, or All-NBA honors.

A player who signs a maximum salary contract can receive a trade kicker as part of his deal, but he can’t cash in on that bonus for any amount beyond his maximum salary in a given league year. For instance, Bradley Beal‘s max salary contract with the Wizards features a 15% trade kicker, but if he had been traded this season, he wouldn’t have been eligible to receive that bonus, since he was already earning his maximum salary of $43,279,250.

Similarly, a maximum salary player whose team finishes the season below the minimum salary floor isn’t eligible to receive a share when the team distributes that money to its players, since his max salary for that year can’t be exceeded.

The current figures for maximum salaries in 2023/24 are as follows, based on the NBA’s projection of a $134MM salary cap:

These figures will apply to players who previously signed maximum salary extensions that will go into effect in ’23/24, including Ja Morant, Zion Williamson, Darius Garland, and Nikola Jokic.

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 previously published by Luke Adams and Chuck Myron.

For NBA teams looking to open up cap room, simply waiving a player isn’t as effective as it is in the NFL, where salaries are often non-guaranteed and most or all of a player’s cap charge can frequently be wiped from a team’s books. Still, the NBA’s Collective Bargaining Agreement does feature a rule that allows teams to spread a player’s cap hit over multiple seasons. This is called the stretch provision.

The stretch provision ensures that any player waived with at least $250K in guaranteed salary remaining on his contract will have the payment schedule of that money spread across multiple years. That schedule is determined as follows:

• If a player is waived between July 1 and August 31, his remaining salary is paid over twice the number of years remaining on his contract, plus one.
• If a player is waived between September 1 and June 30, his current-year salary is paid on its normal schedule, with any subsequent years spread over twice the number of remaining years, plus one.
• If a player in the final year of his contract is waived between September 1 and June 30, the stretch provision does not apply.

While the new payment schedule for a waived player is non-negotiable, teams get to decide whether or not to apply the stretch provision to that player’s cap charges as well. A team can stick to the original schedule for cap hit purposes, if it so chooses.

Rather than singling out a specific active player, we’ll use a hypothetical contract to create a clearer picture of what these rules look like. Let’s say there’s a player earning $19MM this season, $20MM in 2023/24, and $21MM in ’24/25 who has become a candidate to be waived.

Here’s what that contract would look like if it were waived without applying the stretch provision to the cap hits; if it were stretched before August 31; or if it were stretched after August 31:

Because this hypothetical player wasn’t waived and stretched before August 31, 2022, his salary for the current year can no longer be stretched. Stretching his contract last July or August would have resulted in cap hits of about $8.57MM spread across seven seasons (through 2028/29 and including ’22/23).

As this chart shows, it typically makes sense to waive and stretch a player’s contract in July or August if the team is looking to generate immediate cap flexibility for the current season and isn’t as concerned about the impact in future seasons. If this hypothetical player were stretched in July 2023, his team would trim nearly $12MM off its ’23/24 cap, but would remain on the hook for payments through 2028.

We saw a couple real-life examples of this philosophy at play last summer, when the Trail Blazers waived and stretched Eric Bledsoe and Didi Louzada and the Pacers waived and stretched Nik Stauskas, Juwan Morgan, and Malik Fitts.

Portland was looking to reduce its team salary for the current year in order to sneak below the luxury tax line, while Indiana wanted to carve out a little extra cap room in order to sign Deandre Ayton to a maximum-salary offer sheet.

In each of those cases, the club sought immediate cap relief. That wasn’t the case for the Spurs, who waived Danilo Gallinari last July and decided not to apply the stretch provision to his $13MM cap charge for 2022/23, since they had no specific use for that extra cap room. It made more sense for San Antonio to take the hit this season and keep Gallinari’s money off their future cap sheets.

There are a couple more key rules related to the stretch provision worth noting.

First, while the stretch provision regulates when money is paid out, it doesn’t prevent teams and players from negotiating a reduced salary as part of a buyout agreement.

For example, let’s say a player who has an $18MM expiring contract for 2023/24 agrees this July to give up $3MM in a buyout. As a result of that buyout agreement, his team could stretch his remaining salary and end up with cap hits of $5MM for three seasons (through ’25/26) rather than $6MM.

Second, non-guaranteed money isn’t subject to the stretch provision, since a team isn’t obligated to pay the non-guaranteed portion of a contract once it waives a player.

This rule can come in handy when a club decides to waive a player who has one or two non-guaranteed years tacked onto the end of his contract. For instance, when the Blazers waived Louzada last August, he had three years left on his deal, but only his 2022/23 salary of $1,876,222 was guaranteed — the $4,023,212 owed to him for the two seasons beyond this one was fully non-guaranteed.

That means that when they waived Louzada, the Blazers only owed him just $1,876,222 but were able to stretch that figure across seven seasons (twice the three years remaining on his contract, plus one). As a result, Portland will carry tiny $268,032 cap charges for Louzada on its books through the 2028/29 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 was used in the creation of this post.

Earlier version of this post were published in 2013 and 2017.