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Bi-Annual Exception

Last week, we looked at what it means for an NBA player to earn Bird rights, Early Bird rights, or Non-Bird rights. The Bird exceptions allow teams to sign their own free agents, but they can't be used to sign other teams' free agents. If an over-the-cap team wants to sign a free agent, one cap exception available to them is the bi-annual exception.

As its name suggests, the bi-annual exception can only be used every other year. Even if a team uses only a portion of the BAE amount, it becomes unavailable the following year.

The bi-annual exception is available only to a select few clubs — teams whose player salaries and cap exceptions add up to less than the salary cap ($58.04MM this season) lose their bi-annual exception as well as their full mid-level exception and any trade exceptions. They must use their cap room to sign players. Additionally, taxpaying teams lose access to the bi-annual exception. Only teams over the cap but under the tax line can use the BAE.

For the 2011/12 season, the amount of the bi-annual exception was capped at $1.9MM. The largest contract a player could receive using the BAE was for two years, with a raise of 4.5%, adding up to a total of about $3.89MM for two seasons. Teams also have the option of splitting the exception among multiple players, perhaps signing one player for $1MM and another for $900K.

The starting salary for the bi-annual exception will grow 3% annually, so next year it will be worth $1.957MM. The BAE also becomes pro-rated starting on January 10th, so a team wouldn't be able to offer the full amount after that date.

While the bi-annual exception isn't worth a significant amount, it provides over-the-cap teams a way of offering players a salary above the minimum without dipping into their mid-level 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. Larry Coon's Salary Cap FAQ was used in the creation of this post.

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