Hoops Rumors Originals

While a rule like the Gilbert Arenas provision can flatter its namesake, the late Ted Stepien, former owner of the Cavaliers, may have preferred not to go down in history as the reference point for the Ted Stepien rule. Stepien owned the Cavs in the early 1980s, and made a number of trades that left the franchise without first-round picks for several years. As a result, the NBA eventually instituted a rule that prohibited teams from trading out of the first round for consecutive future seasons.

Because the Stepien rule applies only to future draft picks, teams are still permitted to trade their first-rounders every year if they so choose, but they can’t trade out of the first round for back-to-back future seasons. For instance, since the Rockets have traded their 2018 first-round pick to Atlanta, they aren’t allowed to trade their 2019 first-rounder. Following the 2018 draft though, the Rockets will regain the right to trade that 2019 first-round pick, since their ’18 first-rounder will no longer be considered a future pick.

The Stepien rule does allow a team to trade consecutive future first-round picks if the team has acquired a first-rounder from another team for either of those years. So if Houston were to trade for a new 2018 first-rounder, that would give the Rockets the flexibility to move their 2019 pick without having to wait until after the 2018 draft.

Teams are permitted to include protection on draft picks. This can create complications related to the Stepien rule, which prevents teams from trading a first-round pick if there’s any chance at all that it will leave a team without a first-rounder for two straight years. For example, the Raptors have traded a lottery-protected 2018 first-round pick to Brooklyn. That traded 2018 pick is protected through 2023, and as long as there’s still a chance it won’t convey immediately, the Raptors are prevented from unconditionally trading any of their next few first-round picks — their 2020 first-rounder is trade-eligible, but only conditionally.

[RELATED: Trade restrictions on future draft picks by team]

Teams will have to consider the Stepien rule over the next few weeks as they mull trading draft picks in deals for immediate help. Miami, for instance, is one of the teams most significantly impacted by the Stepien rule at the moment. As part of their Goran Dragic deal with the Suns, the Heat will send their 2018 and 2021 first-round picks to Phoenix, so the Stepien rule currently prevents them from also trading their first-rounders in 2019, 2020, or 2022 — moving any of those selections would leave the team without first-round picks in consecutive future seasons.

Here are a few more rules related to trading draft picks:

• For salary-matching purposes, a traded draft pick counts as $0 until the player signs a contract.
• The “Seven Year Rule” prohibits teams from trading draft picks more than seven years in advance. For instance, during the 2017/18 season, a 2024 draft pick could be traded, but a 2025 pick could not be dealt.
• A team can add protection to a pick it has acquired as long as there wasn’t already protection on the pick. For example, when the Celtics flipped the Nets’ 2018 first-round pick to the Cavaliers, Boston could have tried to include top-three protection on the pick.

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.

An earlier version of this post was published in 2012 by Luke Adams.

This Friday marks the renewal of the annual tradition of the ultimate on-the-job tryout in professional sports. The 10-day contract has been the foot in the door for several players who’ve gone on to lengthy, successful NBA careers, like Anthony Mason, Bruce Bowen, Raja Bell, Kurt Rambis, Howard Eisley, and several others. C.J. Watson saw his first NBA action on a pair of 10-day contracts with the Warriors in 2008, and blossomed into a sought-after backup point guard. He signed a three-year, $15MM deal with the Magic in 2015.

Ten-day deals also help veterans make comebacks. Chris Andersen languished in free agency for six months after the Nuggets used the amnesty clause to get rid of him, but two 10-day contracts with the Heat in 2013 kick-started a revival for the Birdman. He wound up signing for the rest of the season that year and played a key role in Miami’s championship run. Andersen reprised that role on a guaranteed minimum-salary contract the next season, and that led the Heat to re-sign him in 2014 to a two-year, $10.375MM deal.

More recently, players like David Nwaba, Okaro White, and Yogi Ferrell jump-started their respective NBA careers last season with 10-day contracts, parlaying those deals into multiyear pacts. While those guys remain on NBA rosters, the 10-day is often a fleeting glimpse at NBA life for players on pro basketball’s fringe — the majority of last year’s signees aren’t currently in the league.

Beginning on Friday, January 5, a team can sign a player to as many as two 10-day contracts before committing to him for the rest of the season or, as in many cases, turning him away. A player can’t sign three 10-day contracts with the same team, but after signing two 10-day deals with one club, he’s allowed to sign another with a separate club.

Ten-day deals are almost always for a prorated portion of the minimum salary, though they can be worth more. A minimum-salary 10-day contract for a rookie this season is worth $46,080, or 10/177ths of the full-season rookie minimum salary. A one-year veteran would earn $74,159. A minimum-salary 10-day deal for any veteran of two or more seasons would represent a cost of $83,129 to the team.

Veterans with more than two years of NBA experience would earn more than $83,129 on a 10-day contract, but the league would pay the extra freight. However, teams gain no financial advantage if they eschew 10-day contracts with more experienced players to sign rookies or one-year veterans to 10-day deals in an effort to avoid the tax, as those deals count the same as the ones for two-year veterans when the league calculates a team’s salary for tax purposes.

Teams would have to pay slightly more if they sign a player to a 10-day contract and they have fewer than three games on their schedule over that 10-day period. In those cases, the length of the 10-day contract is extended so that it covers three games for the team. It’s rare that any team would have such a light schedule, since most play at least three games a week, but the rule sometimes comes into play around the All-Star break.

If there are fewer than 10 days left in the NBA regular season, a team can’t sign a player to a 10-day contract.

A team may terminate a 10-day contract before it runs to term if it wants to use the roster spot to accommodate a waiver claim, signing, or trade acquisition. Players whose 10-day contracts end early don’t go on waivers, so they become free agents immediately. Still, those players receive their full 10-day salaries — the contracts are fully guaranteed for the 10 days.

While clubs close to the luxury tax threshold may be wary of bringing players aboard via 10-day contracts, other teams will make liberal use of those deals, in part because they’re relatively inexpensive. A year ago, the rebuilding Mavericks and the short-handed Pelicans each signed six different players to at least one 10-day deal.

Usually, teams only have one player on a 10-day contract at a time, though they’re allowed to carry as many 10-day contracts as they have players on the inactive list. If a team has 13 players on the active list, it can carry one more 10-day contract than the number of inactive players it has, meaning that if a team has a full 15-man roster, as many as three of those players may be on 10-day deals.

Young players recently released by NBA teams, like Kay Felder and Gary Payton II, figure to draw consideration for 10-day contracts, as should notable veteran free agents, such as Jordan Crawford and Derrick Williams. G League standouts like Trey Burke, Xavier Munford, and Amile Jefferson could all find paths to the NBA via 10-day contracts. Other NBA hopefuls from the G League will make their cases to scouts at a four-day showcase which will take place later this month in Mississauga, Ontario.

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 2013, 2014, 2015, 2016, and 2017 by Luke Adams and Chuck Myron.