Hoops Rumors Glossary: July Moratorium

NBA free agents begin coming off the board in rapid succession as soon as the negotiating period opens on June 30 at 6:00 pm Eastern time. However, most of those deals can’t become official right away, due to what’s known in the league’s Collective Bargaining Agreement as the “moratorium period.” We know it colloquially as the July moratorium.

The July moratorium – which lasts from 12:01 am Eastern time on July 1 until 12:00 pm 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 isn’t the only example of this, but it’s certainly the most memorable one from the last decade. 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, as 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 permitted 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 five-year, fully guaranteed 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 once 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 before 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.

In recent years, the NBA moved the start of its free agency negotiating period forward by six hours, opening that window at 6:00 pm ET on June 30 instead of at 12:01 am ET on July 1. Although the July moratorium still doesn’t technically begin until July 1, free agents who reach agreements quickly can’t officially sign on June 30, since their old contracts haven’t technically expired yet.

However, if an extension-eligible veteran agrees to a new deal with his former team, he can officially complete that extension on the evening of June 30, before the moratorium goes into effect — Thaddeus Young (Raptors) and Gary Harris (Magic) took this route this year, formally finalizing their new contracts last Thursday before the moratorium period began.

Finally, it’s worth noting that while we refer to this period at the start of free agency as the “July” moratorium, it doesn’t always take place in July. In recent years, due to the COVID-19 pandemic, the moratorium period has instead occurred in November (2020) and August (2021).

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 previous years.

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