The Bird exception, named after Larry Bird, is a rule included in the NBA's Collective Bargaining Agreement that allows teams to go over the salary cap to re-sign their own players. A player who qualifies for the Bird exception, formally referred to as a Qualifying Veteran Free Agent, is said to have "Bird rights."
The most basic way for a player to earn Bird rights is to play for the same team for at least three seasons, either on a multiyear deal or separate one-year contracts. The criteria are a little more complicated than that though. A player retains his Bird rights in the following scenarios:
- He changes teams via trade, rather than being waived or signing elsewhere as a free agent. For instance, Anthony Morrow is in the third year of his contract. He has been traded twice, from the Nets to the Hawks and then to the Mavericks, but will earn Bird rights at season's end because he was never waived during those three seasons.
- He finishes a third season with a team after having only played partial seasons with the club for the first two years (without signing elsewhere in between).
However, a player sees the clock on his Bird rights reset to zero in the following scenarios:
- He changes teams via free agency.
- He is selected in an expansion draft.
- He is waived and is not claimed on waivers.
- His rights are renounced by his team.
If a player has earned Bird rights, he is eligible to sign a maximum-salary contract for up to five years with 7.5% annual raises when he becomes a free agent. The maximum salary will vary depending on how long the player has been in the league, but regardless of the amount, a team can exceed the salary cap to complete the deal.
Although the Bird exception allows teams to exceed the cap, a team cannot necessarily use free cap room to sign free agents and then re-sign its own players via Bird rights. A team with a Bird free agent is assigned a "free agent amount" or cap hold worth either 190% of his previous salary (for a player with a below-average salary) or 150% of his previous salary (for an above-average salary). For players coming off a rookie-scale contract, the amounts of those cap holds are 250% and 200%, respectively.
The Hawks, for instance, will have a $12.75MM cap hold for Devin Harris on their 2013/14 books — 150% of his $8.5MM salary this season. Atlanta could clear that $12.75MM in cap space by renouncing Harris, but then would lose his Bird rights. If the Hawks wanted to re-sign him at that point, they'd have to use either cap room or a different cap exception.
Ultimately, the Bird exception was designed to allow teams to keep their star players. The CBA ensures that teams are always able to re-sign their veteran stars to maximum contracts, assuming the player is interested in returning and his team is willing to go over the cap.
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.
This post was initially published on April 17th, 2012.