2022/23 NBA Two-Way Contract Conversions

At Hoops Rumors, we track virtually every kind of transaction, including free agent signings, trades, contract extensions, waiver claims, and many more. One form of roster move that has become increasingly common in recent years is the two-way conversion, involving a player either being converted from an Exhibit 10 contract to a two-way deal, or from a two-way deal to the standard roster.

We’re going to track all of the two-way conversions (either to or from the standard roster) in 2022/23 in the space below.

Let’s dive in…

Exhibit 10 contracts to two-way contracts:

When a player signs a contract during the offseason that includes Exhibit 10 language, he gives his new team the ability to unilaterally convert his deal into a two-way contract. The deadline to convert such a deal is the day before the season begins — this year that was Monday, October 17.

A player who signs a training camp contract that doesn’t include Exhibit 10 language could still sign a two-way deal with his club as long as his camp contract doesn’t include a guarantee exceeding $50K. However, he’d have to clear waivers before inking that new two-way contract.

Here are the players who had their Exhibit 10 contracts converted into two-way deals in 2022/23:

Most of these players were invited to training camp on Exhibit 10 contracts and ultimately earned two-way slots based on their performances in camp and the preseason. However, there are a few exceptions.

Butler had his Exhibit 10 contract converted into a two-way deal early in October, then was waived by the Pelicans at the end of the preseason. It’s possible New Orleans was still negotiating with second-rounder E.J. Liddell at that point and only decided to cut Butler after Liddell agreed to accept a two-year, two-way contract.

Days was in camp with the Heat, but was waived by Miami and claimed by the Rockets, who converted his Exhibit 10 contract to a two-way deal.

Fernando’s conversion from an Exhibit 10 to a two-way was completed for procedural reasons. Doing so allowed the Rockets to negotiate a new standard contract with Fernando (as detailed below) without having to waive him.

Two-way contracts to standard contracts:

A player who is on a two-way contract can have his deal unilaterally converted a one-year, minimum-salary contract by his team (or a two-year, minimum-salary contract if the player’s two-way deal covers two years, but this is rare).

Generally though, the team’s preference is to negotiate a longer-term contract with the player in order to avoid having him reach free agency at season’s end.

When converting a player from a two-way contract to the standard roster, the team can use cap room or the non-taxpayer mid-level exception to negotiate a deal of up to four years; the taxpayer mid-level exception for a deal up to three years; or the room exception, bi-annual exception, or minimum salary exception for a two-year deal.

The player must agree to any deal that is worth more than the minimum or exceeds the number of years left on his two-way pact.

Here are the players who have been converted from two-way deals to standard contracts this year, along with the terms of their new contracts, in chronological order:

  • Jericho Sims (Knicks): Three years, $5,660,082 (story). First year guaranteed. Second year partially guaranteed ($600K). Third-year team option.
  • Bruno Fernando (Rockets): Four years, $10,869,564 (story). First year guaranteed. Second and third years non-guaranteed. Fourth-year team option.
  • Darius Days (Heat): One year, minimum salary (story). Non-guaranteed. Exhibit 10.
    • Note: Days was subsequently waived by the Heat and claimed by the Rockets, who converted him back to a two-way contract (as noted above).

The Knicks used a portion of their cap room to give Sims a three-year deal worth more than the minimum in year one, while the Rockets dipped into their non-taxpayer mid-level exception in order to go up to four years for Fernando. Days’ deal didn’t require cap room or a special exception.

Players on two-way contracts can be converted to standard deals until the last day of the regular season, so we expect to add many more players to this second list in the coming months.

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