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, as most NBA fans know. 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. Still, there are other criteria. A player retains his Bird rights in the following scenarios:
- He changes teams via trade. This wrinkle is fairly well-known. For instance, soon-to-be free agent Courtney Lee is in the fourth and final year of his contract, but he’s been traded twice since he signed, from the Celtics to the Grizzlies in 2014 and from the Grizzlies to the Hornets this year. He nonetheless retains his Bird rights for the offseason ahead because he hasn’t been waived.
- He finishes a third season with a team after having only signed for a partial season with the club in the first year. Troy Daniels signed a contract with the Rockets in February 2014 and re-signed with the team the following summer to a two-year contract. He’s been traded twice and is now with the Hornets, just like Lee, but that doesn’t matter. He’ll still have Bird rights this summer.
- He signed for a full season in year one or two but the team waived him, he cleared waivers, and didn’t sign with another team before re-signing with the club and remaining under contract through a third season. Eric Moreland will have Bird rights next summer if he remains under contract through next season, even though he cleared waivers from the Kings this past summer. That’s because Sacramento re-signed him to a two-year deal about a month later.
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 waived and is not claimed on waivers (except as in scenario No. 3 above).
- His rights are renounced by his team. However, his Bird rights are restored if he re-signs with that team without having signed with another NBA team. The Mavericks renounced Dirk Nowitzki‘s rights before re-signing him two years ago, but they’d still have his Bird rights in the unlikely event Nowitzki opts out of his contract this summer.
- He is selected in an expansion draft.
If a player is waived and claimed off waivers, and he would have been in line for Bird rights at the end of the season, he would retain only Early Bird rights, unless he was waived via the amnesty provision.
When a player earns Bird rights, he’s eligible to re-sign with his team on a maximum-salary contract for up to five years with 7.5% annual raises when he becomes a free agent, regardless of how much cap room the team has. The maximum salary will vary for each player depending on how long he’s been in the league, but regardless of the amount, a team can exceed the salary cap to complete the deal.
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), up to the maximum salary amount. For players coming off rookie scale contracts, the amounts of those cap holds are 250% and 200%, respectively.
The Pistons, for instance, will have a cap hold of nearly $8.18MM for Andre Drummond on their 2016/17 books — 250% of his approximately $3.272MM salary this season. Detroit could renounce Drummond and clear an extra $8.18MM in cap space, but the Pistons would lose his Bird rights if they did that, which would force them to use either cap room or a different cap exception to re-sign him. That won’t happen. Instead, Detroit plans to use his Bird rights and his cap hold strategically, committing its cap space on either outside free agents, trades or both while Drummond’s $8.18MM cap hold remains on the books. The Pistons intend to circle back and use Bird rights to sign Drummond to a maximum-salary contract, or match a max offer sheet, with a salary likely in excess of $20MM for next season.
Ultimately, the Bird exception was designed to allow teams to keep their best players. The CBA ensures that teams are always able to re-sign them to contracts up to the maximum salary, 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.
Versions of this post were initially published in 2012, 2013, 2014 and 2015.