Salary caps, bird rights, moratorium, etc.

The NBA’s Free Agent Moratorium period begins Thursday at 6 pm EST.

If you don’t know what that means, here’s a small FAQ we’ve put together. This helps free agents better understand some of the terms that should be attacked as soon as they get a hint.

Note: Details of all collective bargaining agreements are provided by Larry Coon’s CBA FAQ.

Important date

Before jumping into the term, there are some important dates to remember:

June 30: NBA Free Agent Moratorium Period Starts 6:00 pm ET

July 6: 12:01 pm End of Moratorium Period at ET

July 7-17: Las Vegas NBA Summer League

October 19: NBA regular season begins

What is the Moratorium period? Why can’t the transaction be official until July 6th?

The Moratorium period was first established in 1999 to pursue free agents and give teams the opportunity to prevent transactions under the agreed table prior to the start of free agents.

Therefore, transactions heard during this period cannot be formally closed until 12:01 pm EST on July 6th.

The June 30th-July 6th timeline is a full week for those who enjoy the drama offered by the NBA’s off-season. Rumors and deals are rushing in at this time of the year, so they can’t stop updating their Twitter timeline and it’s a lot of fun.

What is the maximum contract? How is it determined? How is it different from “Super Max”?

Simply put, the biggest deal sounds exactly like that. A contract has been signed that gives the player the maximum amount allowed under the rules of the collective bargaining agreement.

But it’s the “permitted under CBA rules” that things start to get a little trickier.

There are three tiers of maximum salary that a player is eligible for, which is determined by service hours. In the first tier, players with an NBA service period of 0-6 years can order up to 25% of the team’s cap on their starting salary. On the other hand, in the second layer, 30% of players are 7-9 years old, and in the third layer, the upper limit is 35%, which is a service of 10 years or more.

An important thing to keep in mind when discussing maximum salary is the term “starting salary”.

The reason this is specifically mentioned is that the maximum salary is associated with the salary cap only in the first year of the transaction. For multi-year contracts, players will continue to receive year-over-year salary increases. These salary increases are associated with the initial value. Usually up to 5 percent, and up to 8 percent for special cases such as when used by a team. Larry Bird’s exception for re-signing players (more on this in the next question).

And for the “Supermax” contract, the actual name of this transaction is called “Designated Veteran Extension / Contract” and its nickname is “Supermax”.

Basically, with this type of transaction, 30% of tier players have the opportunity to leap directly into the 35% range, even if they haven’t played in the league for 10 years, provided they meet certain urgent criteria. You can get it.

First, a player can only qualify as a “designated veteran player” if he meets any of the following:

• Players have been named to the All-NBA’s First, Second, or Third Team in both the most recent season or the two seasons preceding the most recent season.

• Players have been selected as the Defensive Player of the Year in both the most recent season or the two seasons preceding the most recent season.

• This player has been named the NBA’s Most Valuable Player in one of the last three seasons.

In addition to the “Super Max Contract”, there is also a “Designated Veteran Extension” which is basically a “Super Max Contract Extension”.

In addition to the performance goals mentioned above, players typically need to continuously complete eight or nine seasons with a rookie contracted team in order to be eligible for a designated veteran contract, but an extension. If you have 7 or 8 seasons under their belt.

Therefore, the only difference between an extension and a contract is that the player may qualify for the former sooner.

Finally, in Supermax, this kind of payroll jump isn’t just for experienced players, it’s also officially called the “fifth year, up to 30% standard”. Rookie-scale transactions, more commonly referred to as the “Derrick Rose Rule”.

More specifically, this Derrick Rose rule is an addendum to what is called a “designated newcomer extension / free agent contract after a newcomer-scale contract.”

Players with newcomer-sized contracts, usually in their fourth year, apply for an extension of up to 25% of the cap in the first year of the contract. However, as with the specified veteran extension, if the player achieves any of the lofty goals referenced above (as if Rose earned an MVP in 2011), the player becomes an extension. Eligible to sign and jump to 30. -Faster percent tier than usual.

What are bird rights?

This is one of the most common sources of confusion. To understand what “bird rights” are, you first need to understand how exceptions work in the NBA.

The exception is the mechanism of the softcap system, such as the NBA’s CBA, which allows the team to function and move beyond the salary cap. The term “bird rights” comes from “Larry Bird’s exception”.

Named after the legendary Boston Celtics forward, there are three bird exceptions. The usual “Larry Bird Exceptions”, “Early Bird Exceptions”, and “Non-Bird Exceptions”.

For simplicity, we will only focus on the exceptions of regular Larry Bird. This is because the term “bird rights” actually comes from.

This exception allows the team to re-sign their free agent beyond the salary cap if the team owns the player’s bird rights. In order for a team to own a player’s bird rights, the player must play for three seasons without clearing the exemption or changing clubs as a free agent. It doesn’t matter if the player has signed a three-year contract or three separate one-year contracts. As long as the player stays on the team for three seasons, the team retains the player’s bird rights.

In addition, when players with bird rights are traded, those bird rights are carried with them.

A team that owns a player’s bird rights has certain advantages over a rival squad.

Teams that own the player’s bird rights can offer a maximum period of additional years (a total of 5 years compared to the 4 years that a team that does not own the player’s bird rights can provide) and a higher annual salary increase. ..

The standard year-over-year maximum salary increase that the NBA team can offer under a free agent contract is 5%, but if you re-sign a player using the Larry Bird exception, the team can offer up to 8% salary increase. ..

What are player options, club options, and eligible offers? How do they work?

Let’s look at each of these “option clauses” individually.

Team options: Also known as a “club option,” this usually allows the team to manage the final year of the contract. For example, if a player signs a three-year contract with a team option, that means that after three years it is the organization’s responsibility to get the final year of the contract and decide whether to move forward with the player. ..

Normally, the option year is only one year, but there are special exceptions to newcomer-sized contracts that offer club options in the third and fourth years.

Player options: As the name implies, this gives the player the right to be an unlimited free agent by choosing to call or not call the option.

Like team options, you can only attach one option year to a contract (there are no special circumstances for player options like team options for rookie scale contracts).

Eligible offers: This isn’t an option clause, but it’s a bit similar, so I’ll explain it anyway.

Eligible offers are a mechanism that allows a team to turn a free agent into a restricted free agent and is a permanent offer with a one-year warranty.

If the player is a restricted free agent, this means that the player’s team retains the right to retain the player by matching contracts that may be signed with other teams.

The most common occurrence of restricted free agents occurs when a player has just completed the fourth year of a rookie-scale contract and has not previously signed a contract extension.

The last day a team can make eligible offers to players eligible for a restricted free agent will be Wednesday.

Player early termination option: Finally, there is another type of option clause. It is a player early termination option (ETO). This works as it sounds like players can terminate their contracts early.

This is very similar to a player’s option, but less stable for a player to exercise the option to stay in the club when an unlimited free agency is not as attractive as when the contract was first signed. Become.

What is a rookie-scale contract?

The Rookie Scale contract was established in 1995 to determine the salary of the first draft topic according to the exact scale according to the draft position, and the money is very closely tied to the salary cap. ..

These contracts are always five-year contracts with team options in the third and fourth years, and in the fifth year they are eligible offers to provide clues to the player’s limited free agents.

What is a salary cap? How does luxury tax work?

According to the company, next season’s salary cap is expected to be around $ 122 million. Shams Charania of Athletic The standard amount of luxury tax is $ 149 million, and the tax apron is about $ 155.12 million.

The number of salary caps is the most important thing to remember, but it’s also good to know what the tax threshold and apron are.

As mentioned earlier when discussing exceptions, exceptions are a mechanism by which a team can function and move beyond the salary cap. Due to these exceptions, almost all NBA teams are constantly working beyond the league’s salary cap, treating the luxury tax base as a deterrent to actual spending.

There are various layers of “intermediate level exceptions”, with the highest intermediate level exceptions for non-taxpayers. This is sometimes referred to as a “perfect mid-level exception.” Not only is it most appreciated, but it also allows the team to offer contracts for up to four years.

For a team to be subject to this exception, the team must be below the luxury tax apron after the transaction. This rule applies even if the team decides to split the mid-level exception into multiple players.

With the taxpayer’s mid-level exception, it works much like its brother, but is of much lower value, and the team can only offer contracts for up to three years. As with non-taxpayers, teams can split their value and sign multiple players.

However, if used, the team is likely to move over the apron, so the club will be hard capped to the apron value for the rest of the season. That is, no additional moves can be made beyond the apron under any circumstances. Year.