If you're wondering why you never hear about NBA rookies holding out for more money, or signing for massive salaries, your answer can be found within the Collective Bargaining Agreement. A first-round NBA draft pick is only eligible to sign a rookie scale contract, which limits a rookie's leverage and means his draft slot will dictate how much he gets paid.
A rookie scale contract for first-rounders is always for two guaranteed seasons, with team options for the third and fourth seasons of the deal. The scale amount is strictly set by draft position for the first three years of the contract, with the amount of the fourth year determined by a percentage raise on the third-year salary. Players are eligible to sign for as little as 80% or as much as 120% of the scale amount, with most players signing for the full 120%.
For instance, in 2011/12, the first-year rookie scale amount for the first overall pick was $4,286,900. That number increases to $4,479,800 in year two and $4,672,700 in year three, with a 26.1% raise for year four and a 30% raise for a fifth-year qualifying offer. No. 1 pick Kyrie Irving signed for 120% of that amount, meaning his contract looks like this:
The scale amounts and fourth-year and fifth-year raises vary depending on draft position. For example, the 15th overall pick in 2011 had a first-year scale amount of $1,443,300, while his fourth-year raise is 53.3% and his raise for a qualifying offer is 39.8%.
Here are a few more details relating to rookie scale contracts:
- A team does not have to be under the cap to sign rookie scale contracts. Any team can give a first-rounder a full 120% rookie contract, regardless of its cap status.
- If a player hasn't signed by January 10th, his rookie scale amount becomes prorated each day for the remainder of the season, until he signs.
- Teams have until October 31st each year to make decisions on the team-option seasons in rookie scale contracts. By October 31st, 2012, teams will have to decide on the options for the 2013/14 season. Decisions on 2012/13 options would have been made by October 31st, 2011, if not for the lockout — as it was, teams received an extension until January 25th, 2012, to make decisions.
- Players coming off rookie-scale contracts may be eligible for larger or smaller qualifying offers in their fifth year, based on whether or not they meet certain "starter criteria." I explained this in greater detail here.
- Only first-round picks are eligible for rookie scale contracts.
- If a team signs a first-round pick within three years of drafting him, the rookie scale for the year in which he signs is used. For instance, even though the Raptors drafted Jonas Valanciunas in 2011, if he signs in 2012 after spending a season in Europe, he'll be signed using the 2012/13 rookie scale for a No. 5 pick.
For a full list of the rookie scale figures under the current Collective Bargaining Agreement, check out Larry Coon's complete breakdown 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.