Hoops Rumors Glossary: July Moratorium

The NBA’s annual free agent frenzy begins each July 1, and the league’s top available players rarely take more than three or four days to reach agreements with teams once the calendar turns to July. However, most of those deals can’t become official right away, due to a Collective Bargaining Agreement rule known as the July moratorium.

The July moratorium – which lasts from 12:01am eastern time on July 1 until 12:00pm on July 6 – essentially puts a freeze on most transactions for several days at the start of the new league year. NBA 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 same goes for trades — two teams can agree to terms on a deal, but can’t formally put it through until at least July 6.

While nearly every agreement reached during the July moratorium eventually gets finalized, the unofficial nature of those initial deals can occasionally wreak havoc on the league’s free agent market. DeAndre Jordan‘s 2015 free agency was a perfect example of this. Jordan initially agreed to terms with the Mavericks during the July moratorium, but before the moratorium ended and the two sides could make it official, the Clippers changed Jordan’s mind and convinced him to re-sign with L.A.

Because Jordan and the Mavs had only reached an informal verbal agreement, there was nothing Dallas could do to stop him from reversing course during the moratorium. Still, this sort of about-face is rare, since it can result in fractured relationships between players, agents, and teams.

While most NBA transactions can’t be completed during the moratorium, there are a handful of exceptions to that rule. The following moves are allowed between July 1 and July 6:

  • A team can sign a first-round pick to his rookie scale contract.
  • A team can sign a player to a one- or two-year minimum salary contract.
  • A restricted free agent can sign a qualifying offer from his current team.
  • A restricted free agent can sign a maximum-salary contract with his current team.
  • A restricted free agent can sign an offer sheet with a new team; the 48-hour matching period would begin after the moratorium ends.
  • A team can sign a player to a two-way contract, convert a two-way contract into a standard NBA deal, or convert an Exhibit 10 deal into a two-way contract.
  • A team can waive a player or claim a player off waivers.
  • A second-round pick can accept a required tender (a one-year contract offer) from his current team.

Under the old Collective Bargaining Agreement, the NBA finalized the salary cap at some point during the July moratorium, and the new cap would take effect once the moratorium ended. However, the current CBA calls for the salary cap for the new league year to be set by the start of July, with the new figure going into effect immediately on July 1. This gives teams more clarity on exactly how much room they have available as they negotiate with free agents during the moratorium.

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 published in 2012, 2013, 2014, and 2015 by Luke Adams and Chuck Myron.

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