Hoops Rumors Glossary: July Moratorium

The NBA’s annual free agent frenzy begins each July 1st, but most of the deals that happen as July begins can’t become official until a little more than a week passes. The league office uses this period of time, known as the July Moratorium, to complete its audit, which establishes figures like the salary cap, luxury tax threshold and average salary. Free agents are allowed to negotiate with clubs during the moratorium, and they can agree to terms on new contracts, but they are unable to officially sign new deals until the moratorium ends.

The specific dates vary from season to season, but for 2015, the moratorium will last from July 1st to July 8th. As of July 9th, teams can resume business as usual. Still, it’s an odd time for the league to bar formal moves, as teams cut deals during the moratorium at a faster pace than at any other time during the year, even though they can’t file the paperwork. Most agreements made during the moratorium usually withstand the time that passes before they can be consummated, but the moratorium nonetheless leads to awkward situations in which teams can agree to landmark signings and trades but can’t say much about them until days later.

Usually, a deluge of formal announcements follows the end of the moratorium as teams get caught up, though that wasn’t the case in 2014. Much of the league hung on the free agency of LeBron James, until James finally gave word of his choice to rejoin the Cavaliers on July 11th, after the moratorium had already ended. An unusually languid July quickly descended into the usual chaotic deal-making for the next few days, though in this case, it was unencumbered by the moratorium.

Still, there was some business that teams had already accomplished by that point. A few types of signings and acquisitions are permitted during the moratorium. A first-round draft pick can sign a rookie scale contract with the team that drafted him. A second-round draft pick can accept a required tender, which is a one-year, non-guaranteed contract offer for the minimum salary that allows the team to retain its rights to the player. A restricted free agent can accept a qualifying offer from his team. A free agent can sign a minimum-salary contract for one or two seasons. Also, teams are able to claim players off waivers, providing they were waived during the final two days in June.

When the July moratorium ends, all free agents can officially sign contracts. Additionally, the new salary cap figures for the year take effect, and the seven-day period for using the amnesty clause begins.

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.

Earlier versions of this post were initially published on May 16th, 2012, May 13th 2013 and June 18th, 2014.

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