Hoops Rumors Glossary

Hoops Rumors Glossary: Rookie Scale

When a player like Zaccharie Risacher enters the NBA, his new team – in this case, the Hawks – can rest assured that there’s essentially no chance of him holding out for a larger contract. That’s because a first-round NBA draft pick is only eligible to sign a rookie scale contract, which limits his leverage and ensures that his draft slot will dictate how much he gets paid.

A rookie scale contract for first-rounders is always for two guaranteed seasons, with team options for the third and fourth seasons of the deal. The scale amount is strictly set by draft position for the first three years of the contract, with the amount of the fourth year determined by a percentage raise on the third-year salary, as RealGM’s rookie scale chart for 2024 picks shows.

Players are eligible to sign for as little as 80% or as much as 120% of the scale amount, though almost every player signs for the full 120%. Earlier this month, Knicks first-round pick Pacome Dadiet became the first player since 2019 to sign for just 80% of his rookie scale amount, and even that rate only applies to his rookie season — he’ll get the full 120% in years two through four.

[RELATED: Rookie Scale Salaries For 2024 First-Round Picks]

Under the NBA’s current Collective Bargaining Agreement, the rookie scale increases annually at the same rate as the salary cap. In other words, a 5% salary cap increase would mean a 5% increase to rookie scale salaries.

For the 2024/25 season, the first-year rookie scale amount for the first overall pick is $10,474,200. That number increases to $10,998,100 in year two and $11,521,700 in year three, with a 26.1% raise for year four and a 40% increase for a fifth-year qualifying offer. Risacher signed with the Hawks for 120% of that amount, meaning his contract looks like this:

Season Salary
2024/25 $12,569,040
2025/26 $13,197,720
2026/27 $13,826,040
2027/28 $17,434,636
2028/29 $24,408,490
  • Team option in italics
  • Qualifying offer in bold

The scale amounts and fourth- and fifth-year raises vary depending on draft position. Top picks earn the highest salaries, while late first-round picks get the most substantial bumps at the end of their contracts. For instance, the 30th overall pick gets an 80.5% raise between years three and four, with a qualifying offer increase of 60%.

Here are several more details relating to rookie scale contracts:

  • Only first-round picks are eligible for rookie scale contracts. Second-rounders can be signed using the second-round pick exception (or cap room or other exceptions).
  • A team doesn’t have to be under the cap to sign rookie scale contracts. Any team can give a first-rounder a full 120% rookie contract, regardless of its cap status.
  • Because 120% contracts are so common, the cap hold for a first-round pick is also 120% of the player’s rookie scale amount.
  • Bonuses can be included in rookie scale contracts as long as they don’t exceed 120% of the player’s rookie scale amount. It’s relatively common for teams to include likely incentives a player can earn for his participation in Summer League and offseason workout programs.
  • If a player hasn’t signed by January 10, his rookie scale amount begins to prorate downward each day for the remainder of the season until he signs. If there are 174 days in the regular season, the rookie scale amount would prorate downward by 1/174th per day.
  • Teams have until October 31 each year to make decisions on the team-option seasons in rookie scale contracts (or the next business day, if October 31 falls on a weekend). By October 31, 2024, teams will have to decide on the options for the 2025/26 season.
  • Players coming off rookie-scale contracts may be eligible for larger or smaller qualifying offers in their fifth year, based on whether or not they meet the “starter criteria.” We explain the starter criteria in greater detail here.
  • If a team signs a first-round pick within three years of drafting him, the rookie scale for the year in which he signs is used. For instance, Leandro Bolmaro was selected with the No. 23 overall pick in the 2020 draft but didn’t sign an NBA contract with the Timberwolves until the 2021 offseason. As a result, Bolmaro’s rookie scale contract was equivalent to what the No. 23 pick in the 2021 draft received.
  • If a first-round pick signs four or more years after being drafted and his team has cap room, he is eligible to receive a salary greater than 120% of his rookie scale amount. In practice, however, this essentially never happens.

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 and 2019.

Hoops Rumors Glossary: Traded Player Exception

Relying on the trade machine at ESPN or Spotrac is probably the simplest way for NBA fans to verify whether or not a trade will work under league rules, but it’s a worthwhile exercise to examine and understand the primary tool in the NBA’s Collective Bargaining Agreement that determines a trade’s viability — the traded player exception.

Teams with the cap room necessary to make a trade work don’t need to abide by traded player exception rules. However, if a team makes a deal that will leave its total salary more than $250K above the salary cap, the club can use a traded player exception to ensure the trade is legal under CBA guidelines.

There are two different types of traded player exceptions used in NBA deals. One applies to simultaneous trades, while the other applies to non-simultaneous deals.

In a simultaneous trade, a team can send out one or more players and can acquire more salary than it gives up. In a non-simultaneous trade, only a single player can be dealt, and the team has a year to take back the equivalent of that player’s salary (plus $250K for non-tax apron teams).

Let’s look into each scenario in greater detail….


In a simultaneous trade, different rules apply to teams whose salaries are below the first tax apron and those whose salaries are above the apron. A non-apron team can trade one or more players and take back….

  1. 200% of the outgoing salary (plus $250K), for any amount up to $7,500,000.
  2. The outgoing salary plus $7.5MM, for any amount between $7,500,001 and $29,000,000.
  3. 125% of the outgoing salary (plus $250K), for any amount above $29,000,000.

Here’s a recent example of these rules in effect:

In January, the Pacers traded Bruce Brown, Kira Lewis, and Jordan Nwora to the Raptors in exchange for Pascal Siakam.

Brown was earning $22,000,000 in 2023/24, so if Indiana had traded him on his own, the team could have taken back $29,500,000 (his salary, plus $7.5MM). However, that wouldn’t have been enough to cover Siakam’s salary of $37,893,408.

By adding Lewis ($5,722,116) and Nwora ($3,000,000) to their trade package, the Pacers sent out a total of $30,722,116. The third rule listed above applies to that figure, meaning Indiana was able to take back 125% of the outgoing amount (plus $250K), for $38,652,645 in total — that was enough to cover Siakam’s salary, making the trade legal.

For apron teams, the traded player exception rules for a simultaneous trade are simpler, but far more restrictive. A team whose salary is over either tax apron can take back no more than 100% of the outgoing salary, no matter how much – or how little – outgoing salary is involved.

That means that if the Suns, who project to be a second-apron team in 2024/25, want to trade Nassir Little, they’ll be ineligible to take back a player earning even one dollar more than his $6,750,000 salary for next season.

A team’s position relative to the apron at the conclusion of the transaction dictates which set of rules they have to be abide by. For instance, a team whose salary sits just $2MM below the first tax apron can’t trade a $5MM player for a $10MM player, since that deal would push its salary above the apron. However, a team whose salary is $10MM below the apron could make that move.

In simultaneous transactions, the traded player exception is used to instantly complete the deal, leaving no lingering loose ends. This form of the traded player exception isn’t what we’re talking about if we say a team “has a trade exception” available to use. Those outstanding trade exceptions come as a result of non-simultaneous deals.


In non-simultaneous deals, a team can trade away a single player without immediately taking salary back in return. The team then has up to one year in which it can acquire one or more players whose combined salaries amount to no more than the traded player’s salary (plus $250K for non-apron teams).

For instance, when the Nets sent Joe Harris to the Pistons along with a pair of second-round picks last offseason, they didn’t take any salary back. That was a non-simultaneous trade from Brooklyn’s perspective, allowing the team to create a traded player exception worth Harris’ salary ($19,928,571).

The Nets subsequently had a year to use that exception to acquire one or more players whose salaries total up to $20,178,571 (Harris’ salary, plus $250K). They used a portion of it to acquire Thaddeus Young and his $8MM salary in a deal with the Raptors, leaving approximately $12MM left over. Trade exceptions expire after a year if they haven’t been used in full — the remainder of that one will expire on July 8.

A team can acquire one or more players as part of a non-simultaneous trade. For example, when the Knicks completed their OG Anunoby trade with the Raptors in December, they sent out RJ Barrett and his $23,883,929 salary, creating a non-simultaneous trade exception worth that amount and immediately taking Anunoby’s $18,642,857 salary into it. That reduced the value of the trade exception to $5,241,072.

A team can create a non-simultaneous trade exception regardless of whether its salary is under or over the tax aprons. If the Suns were to trade the aforementioned Little this offseason for a player earning $3.75MM, they would create a non-simultaneous trade exception worth $3MM and would have one year to use it.

Putting the two together:

When evaluating an NBA trade, it’s worth remembering that two teams can view the deal entirely differently and that they’re allowed to divide a single trade into multiple parts to maximize their flexibility. For example, one team could consider a trade simultaneous, while the other team breaks the transaction down into two separate trades, one simultaneous and one non-simultaneous.

Let’s take a look at a recent real-life example, examining the Anunoby trade mentioned above between the Knicks and Raptors.

From the Knicks’ perspective, the trade broke down as follows:

  • Traded Immanuel Quickley ($4,171,548) for Precious Achiuwa ($4,379,527) and Malachi Flynn ($3,873,025).
    • This trade is a simultaneous one for the Knicks, who were operating below both aprons, allowing them to take back up to 200% of Quickley’s salary, plus $250K. That figure works out to $8,593,096; Achiuwa and Flynn were earning a combined $8,252,552, making them a fit.
  • Traded RJ Barrett ($23,883,929) for OG Anunoby ($18,642,857).
    • This is a non-simultaneous trade, with the Knicks essentially creating a $23.88MM trade exception for Barrett’s outgoing salary and immediately taking Anunoby into it. As noted above, New York has until December 30, 2024 to use the remaining $5,241,072 on the exception.

Here’s how it looked from the Raptors’ perspective:

  • Traded OG Anunoby ($18,642,857) for RJ Barrett ($23,883,929).
    • In a simultaneous trade of Anunoby, the Raptors (also a non-apron team) were permitted to take back $26,142,857, which is the full amount of his salary, plus $7.5MM. That’s enough to cover Barrett’s $23.88MM salary, but not enough to take on Quickley too, since he was earning more than the $2,258,928 gap between Barrett’s salary and the amount Toronto could take back for Anunoby.
  • Traded Malachi Flynn ($3,873,025) for Immanuel Quickley ($4,171,548).
    • Because they couldn’t use Anunoby to acquire both Barrett and Quickley, the Raptors had to use Flynn’s outgoing salary in a simultaneous trade to take on Quickley. Toronto could have taken back up to $7,996,050 in salary for Flynn (200% of his salary, plus $250K), so Quickley is an easy fit.
  • Traded Precious Achiuwa ($4,379,527) for “nothing.”
    • Because Achiuwa’s salary wasn’t required for matching purposes, the Raptors moved him to the Knicks in a non-simultaneous trade, from their perspective, generating a trade exception worth his salary that they have until December 30, 2024 to use. They later used a $3MM chunk of that exception in a trade with the Pacers to take on Jordan Nwora. It’s worth noting that either Flynn or Achiuwa could have matched Quickley’s incoming salary, but teams will always use the smaller salary for matching purposes in that scenario, creating the trade exception with the bigger salary.

When a team can’t use a traded player exception:

Under the league’s current Collective Bargaining Agreement, teams above the first or second tax apron face additional restrictions related to traded player exceptions, besides not being able to take back more salary than they send out.

A team is not permitted to use a (non-simultaneous) traded player exception created during the previous offseason or regular season if its team salary will be above the first tax apron upon the conclusion of the deal. Using a TPE created during the prior year will hard-cap the team at the first tax apron for the subsequent season.

For instance, the Rockets used a trade exception they created in last October’s Kevin Porter trade to acquire AJ Griffin from the Hawks on Thursday. That means Houston’s team salary will be hard-capped at the first apron for the 2024/25 league year. If the Rockets had been operating above the first apron, that deal wouldn’t have been permitted as constructed.

Apron teams are still allowed to use newly created trade exceptions. Circling back once more to the Suns/Little example outlined above, if Phoenix traded Little today for a player earning $3.75MM, the team would be able to use the $3MM TPE generated in that deal for the rest of the offseason or ’24/25 regular season.

But the Suns can’t currently use any of the three trade exceptions they generated in July and September of 2023. If Phoenix were to move below the first tax apron during the 2024/25 league year, those exceptions would become “unfrozen” (assuming they haven’t expired) and could be used.

Here are a couple additional restrictions that apron teams face related to trade exceptions:

  • A team is not permitted to aggregate two or more player salaries for matching purposes if that team will be above the second tax apron upon the conclusion of the deal. We have many more details on salary aggregation in a separate glossary entry.
  • A team is not permitted to take back salary using a signed-and-traded player as the outgoing matching piece if that team will be above the second tax apron upon the conclusion of the deal. If a team creates a (non-simultaneous) traded player exception by sending out a player via sign-and-trade, that exception can’t be used if the team will be above the second tax apron at the conclusion of the transaction.

More notes on traded player exceptions:

  • A team’s outgoing salary for matching purposes is the guaranteed salary rather than the total salary. For example, a player with a $2MM partial guarantee on a $10MM salary would only count for $2MM for salary-matching purposes for the team trading him (the team acquiring him would still have to account for him as $10MM in incoming salary). Between the end of a team’s season and June 30, the outgoing salary for a traded player is the lesser of his full current-season salary and his guaranteed salary for the next season. We have more details on this rule in a separate glossary entry.
  • Trade exceptions created in non-simultaneous trades can’t be combined with one another, with other exceptions, or with a player’s salary; they can’t be used to sign a free agent (except in a sign-and-trade); and they can’t be traded outright to another team. However, they can be used to claim a player off waivers.
  • The salary in a sign-and-trade can sometimes be subject to base year compensation rules. In that case, the player’s outgoing salary for trade purposes is either his previous salary or 50% of his new salary, whichever is greater. For instance, when the Heat signed-and-traded Max Strus to the Cavaliers last summer, Strus’ incoming salary from Cleveland’s perspective was $14,487,684, but his outgoing salary from Miami’s perspective was just $7,243,842.
  • Teams that are under the cap before a trade and go over the cap as a result of the trade can’t create a trade exception as a result of that deal.
  • Players signed using the minimum salary exception can also be acquired using the minimum salary exception in a trade, so matching their salary using a traded player exception is not required. A tax apron team is permitted to acquire a player using the minimum salary exception without matching salaries.
  • For salary-matching purposes, future draft picks or the draft rights to an unsigned player aren’t taken into consideration. Neither is cash, which can be sent out in a trade by teams below the second apron.
  • Teams will be permitted to use the non-taxpayer mid-level, room, and bi-annual exceptions as de facto trade exceptions beginning in 2024/25. For instance, a club could trade for a player earning $10MM using the non-taxpayer mid-level exception.

The traded player exception is one of the CBA’s more complicated tools and can make it challenging for over-the-cap teams to navigate the trade market. It’s undoubtedly simpler to use an online trade machine to determine whether a deal is legal, but examining the rules and figuring out exactly how a blockbuster trade breaks down can provide rewarding insight into an NBA club’s management of its 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.

Earlier versions of this post were published in previous years.

Hoops Rumors Glossary: Waivers

When an NBA team cuts a player, he doesn’t immediately become a free agent. Instead, the player is placed on waivers, which serves as a sort of temporary holding ground as the other 29 teams decide if they want to try to add him to their roster.

A player remains on waivers for at least 48 hours after he is officially cut by his team. During that time, a team can place a waiver claim in an attempt to acquire the player. If two or more clubs place a claim, the team with the worst record takes priority (during the offseason and up until December 1, records from the previous season determine waiver order).

If a team claims a player off waivers, it assumes his current contract and is on the hook for the remainder of his salary. The claiming team also pays a $1,000 fee to the NBA office. If no claims are placed on the player, he clears waivers at 4:00 pm Central time two days after his release (or three days later, if he was cut after 4:00 pm CT) and becomes an unrestricted free agent.

While the waiver format is simple enough, not every team will have the salary cap flexibility to make a claim for any waived player it wants. There are only a handful of instances in which a club is able to claim a player off waivers:

  • The team has enough cap room to accommodate the player’s entire current-season salary.
  • The team has a traded player exception worth at least the player’s salary.
  • The team has a disabled player exception worth at least the player’s salary, and he’s in the last year of his contract.
  • The player’s contract is for one or two seasons and he’s paid the minimum salary.
  • The player is on a two-way contract.

Since most NBA teams go over the cap and sizable TPEs and DPEs are somewhat rare, the majority of players who are claimed off waivers are either on minimum-salary contracts or two-way deals. Claiming those players simply requires an open roster slot.

More often than not though, waived players go unclaimed. In that case, the player’s original team remains on the hook for the rest of his salary.

Unless the player is in the final year of his contract and is waived after August 31, his club has the option of “stretching” his remaining cap hit(s) over multiple years using the stretch provision, which we explain in a separate glossary entry. A team that waives a player and uses the stretch provision on him cannot reacquire that player until after his contract would have originally expired.

In the case of any player without a fully guaranteed contract, the non-guaranteed portion of a player’s salary is removed from a club’s cap immediately once the player is waived.

When a player is “bought out” by his club, he’s placed on waivers as part of the agreement. He and his team agree to adjust the guaranteed portion of his contract, reducing the amount owed to the player by the team, assuming he clears waivers. If he’s claimed by a new team, that buyout agreement is voided, since his new club would take on his full remaining salary.

Here are several more notes related to waiver rules:

  • Players can be waived and claimed off waivers during the July moratorium.
  • A player waived after March 1 is ineligible for the postseason if he signs with a new team.
  • A player on an expiring contract (or a contract that could become expiring as a result of an option decision) can’t be waived between the end of the regular season and the start of the next league year. He also can’t be waived at the end of the regular season if he won’t clear waivers before the date of each team’s final regular season game.
  • A player claimed off waivers can’t be traded for 30 days. If he’s claimed during the offseason, he can’t be traded until the 30th day of the regular season.
  • A player on a 10-day contract who is cut before the end of that 10-day period does not have to pass through waivers.
  • If a player is traded and then is waived by his new team, he can’t re-sign with his former club until one year after the trade or until the July 1 after his original contract would have expired, whichever is earlier.
    • Note: If a player is traded twice before being waived, he’s allowed to re-sign with the team that first traded him.
  • A player who has Early Bird or full Bird rights retains Early Bird rights if he’s claimed off waivers.
  • If a team makes a successful waiver claim, it doesn’t lose its spot in the waiver order — the 30th-ranked team at the end of a season remains atop the waiver priority list until December 1 of that year, even if that team makes multiple offseason claims.
  • A team with a full roster can submit a waiver claim and wouldn’t have to clear a spot on its roster for a claimed player until it’s determined that the claim is successful.

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 past years.

Hoops Rumors Glossary: July Moratorium

NBA free agents come off the board in rapid succession as soon as the league-wide 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 several exceptions to that rule. The following moves are permitted between July 1 and July 6:

  • A team can sign a first-round draft pick to his rookie scale contract.
  • A team can sign a second-round draft pick using the second-round pick exception.
  • 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 one-day 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 team can exercise its third- or fourth-year team option on a rookie scale contract.
  • A second-round pick can accept a required tender (a one-year contract offer) from his team.

Under older Collective Bargaining Agreements, 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.

Several years ago, 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 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. That rule will also apply this year to free agents who reach agreements with their own teams during the exclusive negotiating period between the end of the NBA Finals and June 30.

However, if an extension-eligible veteran agrees to a new deal with his current team, he can officially complete that extension during that six-hour period on June 30, before the moratorium goes into effect — Thaddeus Young (Raptors) and Gary Harris (Magic) took this route in 2022, formally finalizing their new contracts as extensions on the evening of June 30 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. For instance, due to the COVID-19 pandemic, the moratorium period instead occurred in November in 2020 and in August in 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.

Hoops Rumors Glossary: Base Year Compensation

The term “base year compensation” no longer shows up in the NBA’s Collective Bargaining Agreement and hasn’t since 2011. A relic of past agreements, the base year compensation rule was intended to prevent teams from signing free agents to new contracts that were specifically intended to facilitate salary-matching in trades.

While the base year compensation rules have, for the most part, been adjusted and/or removed from the CBA, there’s still one situation where they apply. Teams have to take them into account when completing sign-and-trade deals.

The BYC rules apply to a player who meets all of the following criteria in a sign-and-trade:

  • He is a Bird or Early Bird free agent.
  • His new salary is worth more than the minimum.
  • He receives a raise greater than 20%.
  • His team is at or above the cap immediately after the signing.

If the player meets those criteria and is included in a sign-and-trade deal, his outgoing salary for matching purposes is considered to be his previous salary or 50% of his new salary, whichever is greater. For the team he is being signed-and-traded to, his incoming figure for matching purposes is simply his new full salary.

Here are a couple specific examples to help make things a little clearer:

Let’s say the Knicks want to sign-and-trade OG Anunoby this offseason. There’s no indication they do, but the likely salary gap between his current contract and his next one make him a good example of a base year compensation player. Anunoby is a Bird free agent, his new salary will be well above the minimum, and New York projects to be an over-the-cap team. Having made $18,642,857 in 2023/24, Anunoby figures to receive a raise significantly higher than 20% — his next deal could easily start above $30MM. So he meets the BYC criteria.

In a scenario where he signs a deal with a $38MM starting salary as part of a sign-and-trade, Anunoby’s salary for matching purposes from the Knicks’ perspective would be $19MM, which is 50% of his new salary (that amount is greater than his previous salary). From his new team’s perspective, Anunoby’s incoming figure would be his actual salary, $38MM.

On the other hand, if Anunoby were to get a starting salary worth $35MM from a new team, his outgoing salary for matching purposes would be $18,642,857, the amount he made in 2023/24, because that figure would be higher than 50% of his new salary ($17.5MM).

Often, a team acquiring a player via sign-and-trade doesn’t have the cap room to sign the player outright, or else there would be little incentive to negotiate a sign-and-trade. That means salary-matching is required, which can be complicated by base year compensation rules.

In the first Anunoby scenario outlined above, the Knicks wouldn’t be able to take back more than $26.5MM in salary in exchange for the forward due to the league’s matching rules. That number would dip to $19MM if New York’s team salary is above the tax apron. However, in order to take on $38MM in incoming salary, New York’s hypothetical trade partner – assuming they’re over the cap – would have to send out at least $30.2MM in order to account for those salary-matching rules themselves.

The gap between the salary-matching figures from the two teams’ perspectives would complicate sign-and-trade talks, requiring the two clubs to include additional pieces or get a third team involved to make the numbers work.

There were a few examples last summer of teams navigating base year compensation rules to complete sign-and-trade deals. For instance, when the Celtics signed-and-traded Grant Williams to the Mavericks, he met the BYC criteria when he received a raise far above 20%, getting $12,405,000 in the first year of his new contract.

That meant Dallas had to match his incoming $12.4MM salary (and did so sending out Reggie Bullock‘s $11MM+ salary to San Antonio in the three-team deal), but for Boston’s purposes, Williams’ outgoing cap figure was just $6,202,500, half of his new salary. The Celtics didn’t take back any players in the three-team swap, but created a trade exception worth that amount.

The Heat took a similar path when they signed-and-traded Max Strus to the Cavaliers. Strus’ first-year salary on his new deal with Cleveland was $14,487,684, which was the amount the Cavs had to account for when they salary-matched, but it only counted as $7,243,842 in outgoing salary for the Heat, who created a trade exception worth that amount.

In order to legally acquire Strus, the Cavs sent out Cedi Osman ($6,718,842) and Lamar Stevens (whose deal featured a $400,000 partial guarantee). They were permitted to take back up to 200% of that outgoing salary, plus an extra $250K. It’s no coincidence that if you take those two cap figures ($7,118,842), double them ($14,237,684) and add that $250K cushion, the end result is $14,487,684, Strus’ exact salary.

The base year compensation concept doesn’t surface all that often, due to the specific criteria that must be met. However, it looms large over sign-and-trade attempts involving free agents who receive significant raises, reducing the likelihood of teams finding a deal that can be legally completed.

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.

Previous versions of this post were published in 2019, 2022, and 2023.

Hoops Rumors Glossary: Ted Stepien Rule

While a rule like the Gilbert Arenas provision can flatter its namesake, the late Ted Stepien, former owner of the Cavaliers, may have preferred not to go down in history as the reference point for the Ted Stepien rule.

Stepien, who owned the Cavs in the early 1980s, made a series of trades that left the franchise without first-round picks for several years. To avoid having its teams end up in similar situations going forward, the NBA eventually instituted a rule that prohibited a club from trading out of the first round for consecutive future seasons. It’s now informally known as the “Stepien rule,” even though the Cavs owner isn’t explicitly mentioned in the league’s Collective Bargaining Agreement.

Because the Stepien rule applies only to future draft picks, teams are still permitted to trade their first-rounders every year if they so choose, but they can’t trade out of the first round for back-to-back future drafts.

For instance, since the Mavericks have traded their 2024 first-round pick to New York, they aren’t currently permitted to trade their 2025 first-rounder. Following the 2024 draft, Dallas would regain the right to trade that 2025 first-round pick, since the ’24 first-rounder will no longer be considered a future pick.

The Stepien rule does allow a team to trade consecutive future first-round picks if the team has acquired a separate first-rounder from another team for either of those years. So if Dallas were to trade for another team’s 2025 first-rounder next week, that would give the Mavericks the flexibility to move their own 2025 pick immediately, without having to wait until after the 2024 draft.

Teams are permitted to include protection on draft picks. This can create complications related to the Stepien rule, which prevents teams from trading a first-round pick if there’s any chance at all that it will leave a team without a first-rounder for two straight years.

For example, the Trail Blazers owe their lottery-protected 2025 first-round pick to Chicago — it will only convey if it falls outside of the top 14. That traded 2025 pick is protected through 2028, and as long as there’s still a chance it won’t convey immediately, the Blazers are prevented from unconditionally trading any of their next few first-round picks.

Portland could trade a conditional 2027 first-round pick, but a team acquiring that pick would have to be OK with the fact that it would be pushed back by one year every time the protected pick Portland has traded to Chicago doesn’t convey.

There are a handful of ways for teams to work around the Stepien rule. Phoenix is one team that has taken advantage of those workarounds in recent years. When the Suns acquired Kevin Durant at the 2023 deadline, they gave up first-round picks in 2023, 2025, 2027, and 2029. The Stepien rule prevented them from surrendering their 2024, 2026, or 2028 picks at that time, but remember, a team just needs to control one first-round pick in every other future draft — not necessarily its own pick.

That means the Suns were also able to include “swap rights” to their 2028 first-rounder in the deal for Durant and swap rights for their 2024, 2026, and 2030 first-rounders in a subsequent trade for Bradley Beal. Phoenix has actually traded swap rights twice on a couple of those future picks, putting them in line to receive the least favorable of three separate first-rounders. Giving up swap rights is a way for teams to extract value from a future first-round pick without moving out of that year’s first round.

The Suns will be able to work around the Stepien rule again this summer if they so choose by trading their 2024 first-rounder after a selection has been made. As noted above, once a pick has been used to draft a player, it’s no longer subject to the Stepien rule. Phoenix could agree to move its 2024 first-rounder prior to the draft, select a player on behalf of its trade partner, then officially finalize the deal after the draft.

Here are a few more rules related to trading draft picks:

  • The “Seven Year Rule” prohibits teams from trading draft picks more than seven years in advance. Once the 2024/25 league year begins on July 1, a 2031 draft pick can be traded, but a 2032 pick cannot be dealt.
  • The Seven Year Rule applies to protections on picks as well. If a team wants to trade a lottery-protected 2031 first-rounder this July, it can’t roll those protections over to 2032. That’s why, typically, the further into the future a traded pick is, the less likely it is to be heavily protected.
  • A team can add protection to a pick it has acquired as long as there wasn’t already protection on the pick. For instance, Brooklyn currently controls Phoenix’s unprotected 2025 first-round pick. If the Nets want to include that selection in a trade, they would be permitted to put, say, top-four protection on it.
  • Beginning in 2024/25, a team that finishes the season with a team salary above the second tax apron will lose the right to freely trade its first-round pick seven years out — that pick would become “frozen.” For example, if the Suns finish next season above the second apron, their 2032 first-rounder can’t be traded. If the team stays below the second apron for at least three of the subsequent four seasons, its pick becomes “unfrozen” and is once again tradable; if not, it remains frozen and is moved to the end of the first round for that draft.
  • For salary-matching purposes, a traded draft pick counts as $0 until the player signs a contract.

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 version of this post were published in previous years.

Hoops Rumors Glossary: Maximum Salary

There are many NBA players technically on maximum-salary contracts, but most of those players didn’t earn identical salaries this season, making the league’s “maximum salary” something of a misnomer. While each NBA player has a maximum salary that he can earn in a given season, that number varies from player to player, with a handful of factors playing a part in determining the exact figure.

The primary factor in determining a player’s maximum salary is his years of service. If a player has been in the NBA for six seasons or fewer, he can earn up to 25% of the salary cap in the first year of his deal. Players with seven to nine years of experience can earn up to 30%, while veterans with 10 or more years in the NBA are eligible for up to 35% of the cap. In 2023/24, the salary cap was $136,021,000, meaning the maximum salaries are as follows:

Years in NBA Salary
0-6 $34,005,250
7-9 $40,806,300
10+ $47,607,350

The figures above explain why Fred VanVleet, who signed a maximum-salary contract with the Rockets last July following his seventh NBA season, earned a salary of $40,806,300 this season. But they don’t explain why Timberwolves big man Karl-Anthony Towns, who was also in that 7-9 year window and is on a max contract of his own, made just $36,016,200.

The reason Towns’ maximum salary is a few million shy of VanVleet’s is that those league-wide maximum salary figures only apply to the first year of a multiyear contract.

When a player signs a maximum contract, he can receive annual raises of up to either 8% or 5%, depending on whether he signs with his previous team or a new team. So by the third, fourth, or fifth year of his contract, he could be earning significantly more or less than his updated max for that season, depending on the rate the salary cap has been increasing and whether or not he has moved into a new “years of service” group.

Towns signed his first maximum-salary contract extension in 2018 and it went into effect in 2019/20, when he had fewer than six years of NBA experience. Although he has received annual 8% raises since then, those raises haven’t been enough to keep up with the annual cap growth and with his move into the 7-9 year window. As a result, he earned about $4.8MM less than his actual max in 2023/24, despite being on a “max contract.”

Towns signed a new contract extension in 2022 that will go into effect in 2024/25, so he’ll receive a major pay bump heading into next season and will comfortably surpass VanVleet’s annual earnings at that time.

Here are a couple more ways a player’s usual maximum salary can fluctuate:

  • A free agent’s maximum salary is always at least 105% of his previous salary. For example, Lakers star LeBron James earned $47,607,350 this past season. If he were to decline his player option for 2024/25 in order to sign a new contract, he’d be eligible to receive a starting salary of up to $49,987,718 (105% of this year’s salary), even though that figure projects to exceed 35% of the ’24/25 cap ($49,350,000).
  • In certain situations, players eligible for new contracts can earn the maximum salary for the level above the one they’d typically fall into. A player coming off his rookie scale contract can earn up to 30% of the cap instead of 25% if he meets certain performance criteria. A veteran can become eligible to earn up to 35% of the cap instead of 30% if he meets the same criteria, which are related to MVP, Defensive Player of the Year, or All-NBA honors.

Because a player can receive a raise of up to 40% in the first year of a veteran extension, there are some instances when a player who signs an extension not necessarily designed to be a maximum-salary contract sees the first-year salary in his new deal adjusted downward based on that year’s cap. Clippers forward Kawhi Leonard is one example. His new extension, which will begin in 2024/25, calls for a first-year salary of $52,368,085, which is a raise in the neighborhood of 15% on this season’s $45,640,084 salary.

However, because next year’s league-wide maximum salary for players with 10+ years of NBA experience projects to be $49,350,000 (which would be more than a 5% raise for Leonard), he can’t exceed that figure. That $49.35MM figure will be the value of his 2024/25 salary if the cap comes in at $141MM, as estimated. And Kawhi’s three-year extension, which was originally said to be worth over $152MM, will actually end up closer to $149MM.

A player who signs a maximum-salary contract can receive a trade kicker as part of his deal, but he can’t cash in on that bonus for any amount beyond his maximum salary in a given league year. For instance, Trae Young‘s max-salary contract with the Hawks features a 15% trade kicker, but if he had been traded this season, he wouldn’t have been eligible to receive that bonus, since he was already earning his maximum salary of $40,064,220.

A player on a maximum-salary deal that includes a trade kicker can potentially cash in on that bonus if he’s dealt later in that contract. For example, Brandon Ingram is on a max contract, but – like Towns – was earning well below his actual max in 2023/24, year four of that five-year deal. If he had been moved by the Pelicans this season, he would’ve been eligible to take advantage of his trade kicker. That remains true for Ingram going forward.

A maximum-salary player whose team finishes the season below the minimum salary floor isn’t eligible to receive a share when the team distributes that money to its players, since his max salary for that year can’t be exceeded.

The current figures for maximum salaries in 2024/25 are as follows, based on the NBA’s projection of a $141MM salary cap:

Years in NBA Salary
0-6 $35,250,000
7-9 $42,300,000
10+ $49,350,000

These figures will apply to players who previously signed maximum salary extensions that will go into effect in ’24/25, including Towns, Devin Booker, Anthony Edwards, Tyrese Haliburton, LaMelo Ball, and Jaylen Brown.

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 previously published by Luke Adams and Chuck Myron.

Hoops Rumors Glossary: Minimum Salary Exception

The minimum salary exception is something of a last resort for capped-out teams looking to add players, as well as for players seeking NBA contracts, but it’s one of the most commonly used cap exceptions.

As its name suggests, the minimum salary exception allows an over-the-cap team to sign a player to a minimum-salary deal. A contract signed using the minimum salary exception can be a one- or two-year deal, but can’t cover more than two seasons.

Teams can use the exception multiple times in a league year, giving clubs that have used all of their cap room and other exceptions an avenue to fill out their rosters. The exception also accommodates teams’ acquisitions of minimum-salary players via trade, as players signed via the minimum salary exception don’t count as incoming salary for salary-matching purposes.

Players are entitled to varying minimum salaries based on how long they’ve been in the NBA. In 2023/24, a player with no prior NBA experience was eligible for a $1,119,563 minimum salary, while a player with 10 or more years of experience was eligible for $3,196,448.

[RELATED: NBA Minimum Salaries For 2023/24]

Under the NBA’s current Collective Bargaining Agreement, the minimum salary is adjusted each season to reflect the year-to-year salary cap change. If the cap increases by 5%, so will minimum salaries. If the cap doesn’t change from one season to the next, neither will minimum salaries.

Our minimum-salary estimates for 2024/25, based on a projected salary cap of $141MM, can be found right here.

There’s a wide disparity between the minimum salary for rookies and for long-tenured players, with a minimum-salary veteran of 10+ seasons earning nearly three times as much as a rookie making the minimum next season. The NBA doesn’t want those pricier deals to discourage clubs from signing veterans, however, so the league reimburses teams for a portion of a minimum-salary player’s cost if he has three or more years of experience, as long as the contract is a one-year deal.

For example, when the Bucks signed 11-year veteran Jae Crowder to a one-year pact for 2023/24 using the minimum salary exception, he locked in a salary of $3,196,448, but the team’s cap hit was just $2,019,706, equivalent to the minimum salary for a player with two years of NBA experience. The league will reimburse the Bucks for the difference between Crowder’s salary and cap hit ($1,176,742).

Many salary cap exceptions can only be used once each season. When a team uses its full mid-level exception to sign one or more players, the club can no longer use that exception until the following league year. Unlike the mid-level and other cap exceptions though, the minimum salary exception can be used any number of times in a single season.

The Suns, for instance, used the minimum salary exception to sign Eric Gordon, Damion Lee, Keita Bates-Diop, Drew Eubanks, Chimezie Metu, Bol Bol, and Yuta Watanabe last offseason. They also used it during the season to add Thaddeus Young and Isaiah Thomas on rest-of-season contracts.

While many exceptions begin to prorate midway through the regular season, the minimum salary exception prorates beginning after opening night. If a season is 174 days long and a player signs a minimum-salary deal after 25 days have passed, he would only be paid for 149 days.

An extreme example of a prorated minimum salary occurred when the Clippers signed Kai Jones to a minimum-salary contract on the final day of the 2023/24 season. Last year’s rookie minimum for a player like Jones – with two years of NBA experience – was $2,019,706, so he received 1/174th of that amount: $11,608.

In cases where a veteran player signs a one-year contract using the minimum salary exception midway through a season, his cap hit is prorated in the same way that his salary is.

When Young signed with the Suns on February 20, 2024, there were 55 days left in the ’23/24 season. He earned a rest-of-season salary of $1,010,371 (55/174ths of his full-season minimum of $3,196,448), while his cap hit was $638,413 (55/174ths of $2,019,706, the minimum salary for a player with two years of experience).

When a player signs a two-year contract using the minimum salary exception, his second-year salary is locked in as part of that agreement. Depending on the amount of the second-year cap increase, he may end up making more or less than the amount he would have earned if he’d instead signed two consecutive one-year minimum contracts.

On a two-year, minimum-salary deal, the player’s second-year salary is worth 105% of the first-year minimum for a player with the same years of NBA experience.

For example, a rookie signing a two-year minimum-salary deal in 2023/24 would be assured of $1,891,857 in ’24/25, once he has one year of NBA experience under his belt — that’s 5% more than the minimum for a player with one year of NBA experience in ’23/24 ($1,801,769).

Finally, it’s worth noting that the minimum salary exception can be used to claim a player off waivers in the same way that it can be used to trade for a player. However, in the case of both trades and waiver claims, a minimum-salary player can’t be acquired using the minimum salary exception if his contract is for more than two years or if his salary exceeded the minimum in any previous year of the contract.

When the Wizards waived Isaiah Livers in April, he was earning a minimum salary for 2023/24 ($1,836,096). But Livers was in the third year of his contract and had earned more than the minimum in his first season of that deal — both of those factors made him ineligible to be claimed using the minimum salary exception, so if a team had wanted to claim him, it would have needed to use cap room or a trade exception.

Here are a few more notes on the minimum salary exception:

  • Players signed using the minimum salary exception are eligible for trade bonuses, but not incentive bonuses. A minimum-salary player with a trade bonus cannot be acquired in a trade using the minimum salary exception unless he waives that bonus.
  • When a minimum-salary player is traded during the season, any reimbursement from the NBA is split between his two teams. It’s prorated based on the number of days he spends with each club.
  • If a minimum-salary player with a non-guaranteed salary is waived before he exceeds the minimum for a two-year veteran, his team won’t be reimbursed for any portion of his salary.
  • Every 10-day contract is worth a prorated minimum salary. The NBA also reimburses teams for a portion of the 10-day minimum salary for veterans with three or more years of experience.

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 and the Basketball Insiders salary pages were used in the creation of this post.

Earlier versions of this post were published in previous years by Luke Adams and Chuck Myron.

Hoops Rumors Glossary: Qualifying Offer

Players eligible for restricted free agency don’t become restricted free agents by default. In order to make a player a restricted free agent, a team must extend a qualifying offer to him — a player who doesn’t receive one becomes an unrestricted free agent instead.

The qualifying offer, which is essentially just a one-year contract offer, varies in amount depending on a player’s service time and previous contract status.

If a player reaches free agency with three or fewer years of NBA service time under his belt, his qualifying offer is worth whichever of the following amounts is greater:

  • 135% of his prior salary; or 125% of his prior salary, if he signed his contract before the 2023/24 league year
  • His minimum salary, plus $200K.

For instance, after earning $2,019,706 this season, Spurs big man Sandro Mamukelashvili projects to have a minimum salary worth $2,168,944 in 2024/25. Adding $200K to that figure works out to $2,368,944, whereas 135% of his prior salary is $2,726,603. His qualifying offer will be worth the greater amount ($2,726,603).

Let’s use Lakers guard Max Christie as another example — he earned a $1,719,864 salary in 2023/24. Unlike Mamukelashvili, Christie signed his contract prior to this season, so to determine his qualifying offer, we’d start by calculating 125% of that amount, which works out to $2,149,830. On the other hand, his projected minimum salary ($2,093,637) plus $200K would be $2,293,637.

Christie’s projected minimum could vary a little depending on where exactly the 2024/25 salary cap ends up, but it’s a safe bet his QO will be determined based on that amount rather rather than the 125% figure.

The qualifying offer for a former first-round pick coming off his rookie scale contract is determined by his draft position. Under the previous CBA, the qualifying offer for a first overall pick was 130% of his fourth-year salary, while for a 30th overall pick it was 150% of his previous salary — QOs for the rest of the first-rounders fall somewhere in between. Those numbers will increase to 140% and 160%, respectively, under the new CBA, beginning when the 2023 draft class reaches restricted free agency in 2027.

The full first-round scale for the draft class of 2020, whose first-rounders will be hitting free agency this summer, can be found here, courtesy of RealGM.

A wrinkle in the Collective Bargaining Agreement complicates matters for some RFAs-to-be, since a player’s previous usage can impact the amount of his qualifying offer. Certain players who meet – or fail to meet – the “starter criteria,” which we break down in a separate glossary entry, become eligible for higher or lower qualifying offers. Here’s how the starter criteria affects QOs:

  • A top-14 pick who does not meet the starter criteria will receive a same qualifying offer equal to 120% of the amount applicable to the 15th overall pick.
    • Note: In 2024, the value of this QO will be $7,744,600.
  • A player picked between 10th and 30th who meets the starter criteria will receive a qualifying offer equal to 120% of the amount applicable to the ninth overall pick.
    • Note: In 2024, the value of this QO will be $8,486,620.
  • A second-round pick or undrafted player who meets the starter criteria will receive a qualifying offer equal to 100% of the amount applicable to the 21st overall pick.
    • Note: In 2024, the value of this QO will be $5,216,324.

Pistons center James Wiseman is one example of a player who falls into the first group, since he didn’t meet the starter criteria this year. The No. 2 overall pick in 2020, Wiseman will be eligible this offseason for a QO worth $7,744,600 instead of $15,815,870.

Conversely, Raptors guard Immanuel Quickley (a former No. 25 overall pick) met the starter criteria and will now be eligible for a QO worth $8,486,620 instead of $6,128,004.

[RELATED: How Starter Criteria Will Impact QOs For Potential 2024 RFAs]

A qualifying offer is designed to give a player’s team the right of first refusal. Because the qualifying offer acts as the first formal contract offer a free agent receives, his team then receives the option to match any offer sheet the player signs with another club.

A player can also accept his qualifying offer, if he so chooses. He then plays the following season on a one-year contract worth the amount of the QO, and becomes an unrestricted free agent at season’s end, assuming he has at least four years of NBA experience. A player can go this route if he wants to hit unrestricted free agency as early as possible, or if he feels like the QO is the best offer he’ll receive. Accepting the qualifying offer also gives a player the right to veto trades for the season.

Hornets forward Miles Bridges was the most noteworthy restricted free agent to accept his qualifying offer during the 2023 offseason. As a result, he’ll be an unrestricted free agent in 2024.

Here are a few more details related to qualifying offers:

  • A team that issues a qualifying offer can unilaterally withdraw that offer anytime up until July 13.
  • A player who receives a qualifying offer has a deadline of October 1 to accept it. He and the team can agree to extend that deadline.
  • A different set of rules applies to players coming off two-way contracts. For most of those players, the qualifying offer would be equivalent to a one-year, two-way salary, with a small portion (known as the “maximum two-way protection amount”) guaranteed. For 2024/25, that partial guarantee will be worth approximately $78K.
  • A player who is coming off a two-year, two-way deal; has already been on two-way deals with his current team for at least two seasons; or has accumulated four years of NBA service would be eligible for a qualifying offer equivalent to a standard, minimum-salary NBA contract, with a small portion (known as the “two-way QO protection amount”) guaranteed. For 2024/25, that partial guarantee projects to be worth approximately $93K.

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.

Hoops Rumors Glossary: NBA Draft Lottery

The NBA’s draft lottery, which takes place annually between the end of the regular season and the draft, is the league’s way of determining the draft order and disincentivizing second-half tanking. The lottery gives each of the 14 non-playoff teams – or whichever clubs hold those teams’ first-round picks – a chance to land one of the top four selections in the draft.

Although the top four picks of each draft are up for grabs via the lottery, the remaining order is determined by record, worst to best. The league’s worst team isn’t guaranteed a top-four spot in the draft, but is tied for the best chance to land the first overall pick and will receive the fifth overall selection at worst.

The first four picks are determined by a draw of ping-pong balls numbered 1 through 14. Four balls are drawn, resulting in a total of 1,001 possible outcomes. 1,000 of those outcomes are assigned to the 14-non playoff teams — for instance, if balls numbered 4, 7, 8, and 13 were chosen, that combination would belong to one of the 14 lottery teams. The 1,001st combination remains unassigned, and a re-draw would occur if it were ever selected.

The team whose combination is drawn first receives the number one overall pick, and the process is repeated to determine picks two, three, and four. The 14 teams involved in the draft lottery are all assigned a specific number of combinations, as follows (worst to best):

  1. 140 combinations, 14.0% chance of receiving the first overall pick
  2. 140 combinations, 14.0%
  3. 140 combinations, 14.0%
  4. 125 combinations, 12.5%
  5. 105 combinations, 10.5%
  6. 90 combinations, 9.0%
  7. 75 combinations, 7.5%
  8. 60 combinations, 6.0%
  9. 45 combinations, 4.5%
  10. 30 combinations, 3.0%
  11. 20 combinations, 2.0%
  12. 15 combinations, 1.5%
  13. 10 combinations, 1.0%
  14. 5 combinations, 0.5%

If two lottery teams finish the season with identical records, each team receives an equal chance at a top-four pick by averaging the total amount of outcomes for their two positions. For instance, if two teams tie for the league’s fourth-worst record, each club would receive 115 combinations and an 11.5% chance at the first overall pick — an average of the 125 and 105 combinations that the fourth- and fifth-worst teams receive.

If the average amount of combinations for two positions isn’t a whole number, a coin flip determines which team receives the extra combination. For example, if two clubs tied for the league’s third-worst record, the team that wins the coin flip would receive 133 of 1,000 chances at the first overall pick, while the loser would receive 132. The coin flip also determines which team will draft higher in the event that neither club earns a top-four pick.

The table below displays the odds for all 14 lottery teams. Each figure in the table represents a percentage rounded to one decimal place. Seeds are listed in the left column (the NBA’s worst team is the first seed), while the picks are noted along the top row.

Seed 1 2 3 4 5 6 7 8 9 10 11 12 13 14
1 14 13.4 12.7 12 47.9
2 14 13.4 12.7 12 27.8 20
3 14 13.4 12.7 12 14.8 26 7
4 12.5 12.2 11.9 11.5 7.2 25.7 16.7 2.2
5 10.5 10.5 10.6 10.5 2.2 19.6 26.7 8.7 0.6
6 9 9.2 9.4 9.6 8.6 29.8 20.6 3.7 0.1
7 7.5 7.8 8.1 8.5 19.7 34.1 12.9 1.3 >0
8 6 6.3 6.7 7.2 34.5 32.1 6.7 0.4 >0
9 4.5 4.8 5.2 5.7 50.7 25.9 3 0.1 >0
10 3 3.3 3.6 4 65.9 19 1.2 >0 >0
11 2 2.2 2.4 2.8 77.6 12.6 0.4 >0
12 1.5 1.7 1.9 2.1 86.1 6.7 0.1
13 1 1.1 1.2 1.4 92.9 2.3
14 0.5 0.6 0.6 0.7 97.6

The NBA’s lottery format was changed in 2019 and that year’s draft was the first one to use the new system. Previously, only the top three spots were determined via the lottery and the odds were weighted more heavily in favor of the league’s worst teams.

Beginning in 2021, the NBA’s lottery underwent another small change when the league introduced the play-in tournament. The lottery now includes the 10 teams that miss out on the playoffs and the play-in tournament, plus the four clubs that are eliminated in the play-in portion of the postseason.

That means a team can finish the regular season ranked seventh or eighth in its conference, but if that club is eliminated in the play-in tournament, it will be in the lottery. Conversely, a team that finishes ninth or 10th in its conference during the regular season and then wins a pair of play-in games to earn a playoff spot will be a non-lottery team.

Once the 14 lottery teams are determined, their lottery odds are still dictated by their regular season records, so the play-in losers won’t necessarily be the 11-14 “seeds” in the lottery. For example, in 2022, the 34-48 Spurs ended up with better lottery odds than the 37-45 Knicks or 35-47 Wizards, even though San Antonio participated in the Western Conference play-in tournament while New York and Washington didn’t qualify for the East’s play-in.

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.

Information from Tankathon.com and Wikipedia was used in the creation of this post. Earlier versions of this post were published in past years.