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Hoops Rumors Glossary: Biannual Exception

The most common method over-the-cap teams use to sign free agents from other teams is the mid-level exception, but it’s not the only tool those clubs can use to squeeze an extra player onto the payroll. The biannual exception is a way to sign a player who commands more than the minimum salary and less than the mid-level.

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

The biannual exception is available only to limited number of clubs, even among those that didn’t use the biannual the season before. Teams with player salaries, cap holds and cap exceptions that add up to less than the salary cap lose their biannual exception, as well as their full mid-level exception and any trade exceptions. Additionally, teams lose access to the biannual exception when they go more than $4MM over the tax threshold, exceeding what’s known as the tax apron. So, only teams over the cap but under the tax apron can use the biannual exception.

If a team uses all or part of the biannual exception, it triggers a hard cap for that season. Clubs that sign a player using the biannual can’t go over the tax apron at any time during the season in which the contract is signed.

The biannual exception provides for a starting salary of $2.139MM in 2014/15. That’s approximately 3% greater than the starting salary in a biannual deal this past season, and the starting salary of the biannual exception will continue to rise by about 3% each year under the collective bargaining agreement. A biannual contract can be for either one or two seasons, with a raise of 4.5% for the second season. Teams also have the option of splitting the exception among multiple players, though that happens much less frequently than it does with the mid-level exception, since a split biannual deal wouldn’t entail much more than the minimum salary. The biannual exception starts to pro-rate on January 10th.

Five teams used the biannual exception in 2014/15, the same number of teams that spent it in 2013/14. The Spurs had the biannual available for use last summer when they gave Aron Baynes a one-year contract equivalent to the value of the starting salary for a biannual deal, but San Antonio used part of its mid-level instead, preserving the chance to use the biannual again this year. Here’s a list of each team that used the biannual for 2014/15 and the players to whom they committed it:

Those five teams are ineligible to sign a player via the biannual in 2015/16. That’s true for Houston even though Smith only signed a one-year contract, for Portland even if Blake opts out, for the Clippers and Kings even though Farmar and Sessions are no longer with those respective teams, and Memphis even if it waives Udrih’s partially guaranteed deal.

Earlier versions of this post appeared on April 23rd, 2012, May 1st, 2013 and May 27th, 2014.

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 and the Basketball Insiders salary pages were used in the creation of this post.

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