Qualifying Offers

Players eligible for restricted free agency don’t become restricted free agents by default. In order to make a player a restricted free agent, a team must extend a qualifying offer to him. The qualifying offer, which is essentially just a one-year contract offer, varies in amount depending on a player’s service time and previous contract status.

If a player has played three seasons or less in the NBA, his qualifying offer will be worth 125% of his prior salary, or his minimum salary plus $200K, whichever is greater. For instance, after making $473,604 this season, Pablo Prigioni will be eligible for a qualifying offer worth $988,872 for next year — calculated by adding $200,000 to his minimum salary for next season ($788,872). Tiago Splitter‘s 2012/13 salary, meanwhile, was $3,944,000, so his qualifying offer will be worth 125% of that figure, or $4,930,000.

The qualifying offer for a player coming off his rookie scale contract is determined by his draft position. The qualifying offer for a first overall pick is 130% of his fourth-year salary, while the QO for a 30th overall pick is 150% of his previous salary. The full first-round scale for the class of 2009, who will be hitting free agency this summer, can be found here, courtesy of RealGM.

A pair of examples for this season, based on RealGM’s chart: 2009 fourth overall pick Tyreke Evans, coming off a fourth-year salary of $5,251,825, must be extended a qualifying offer of $6,927,157 (a 31.9% increase) to become a restricted free agent. 28th overall pick Wayne Ellington will be eligible for a qualifying offer of $3,103,733, a 49.0% increase on this season’s $2,083,042 salary.

A wrinkle in the new Collective Bargaining Agreement complicates matters — as of last summer, a player’s previous performance can affect the amount of his qualifying offer. The new CBA identifies the “starter criteria” as starting 41 games or playing 2000 minutes per season, and rewards players for meeting those criteria. A player meets the starter criteria if he compiles at least 41 starts or 2,000 minutes in the season prior to his free agency, or averages at least that many starts or minutes over the two seasons before he becomes a free agent. Here’s how the starter criteria affect qualifying offers:

  • A top-14 pick who does not meet the starter criteria will receive a same qualifying offer equal to 120% of the amount applicable to the 15th overall pick.
  • A player picked between 10th and 30th who meets the starter criteria will receive a qualifying offer equal to 120% of the amount applicable to the ninth overall pick.
  • A second-round pick or undrafted player who meets the criteria will receive a qualifying offer equal to 100% of the amount applicable to the 21st overall pick.

You can find examples of free-agents-to-be to whom these conditions apply right here.

A qualifying offer is designed to give a player’s team the right of first refusal. Because the qualifying offer acts as the first formal contract offer a free agent receives, his team then receives the option to match any offer sheet the player signs with another club.

A player can also accept his qualifying offer, if he so chooses. He then plays the following season on a one-year contract worth the amount of the QO, and becomes an unrestricted free agent at season’s end. A player can go this route if he wants to hit unrestricted free agency as early as possible, or if he feels like the QO is the best offer he’ll receive. Accepting the qualifying offer also gives a player the right to veto trades for the season.

For instance, Brandon Jennings has strongly hinted on multiple occasions that he would prefer not to sign a long-term contract with the Bucks. If he’s serious about that stance, and is concerned about the Bucks matching a long-term offer sheet from a rival club, he could accept his one-year qualifying offer from Milwaukee this summer. Because he met the starter criteria in 2012/13, his QO will be worth $4,531,459. Accepting that one-year deal would make him an unrestricted free agent in the summer of ’14.

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 Storyteller’s Contracts were used in the creation of this post.

This post was initially published on May 3rd, 2012.

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