Hoops Rumors Glossary

Each summer when the NBA offseason arrives, a multitude of free agents sign new contracts and teams around the league consummate dozens of trades. On some occasions, these two forms of transactions are combined into something called a sign-and-trade deal.

What is a sign-and-trade?

Sign-and-trades occur when a team re-signs its own free agent, only to immediately send him to another team in exchange for players, draft picks, and/or cash. For the most part, they function like a normal NBA trade, except one of the pieces involved in the trade is a free agent who receives a new contract as part of the deal.

In order for a sign-and-trade deal to be completed, the following criteria must be met:

• A free agent must be signed-and-traded by the team with whom he finished the most recent season. For instance, the Cavaliers could sign-and-trade Isaac Okoro this offseason, but another team couldn’t sign Okoro and immediately move him. Cleveland also wouldn’t be permitted to sign-and-trade Raul Neto, even though the Cavs were his most recent team, because he finished the 2022/23 season with the club, rather than the ’23/24 season.
• If the free agent is restricted, he can’t be signed-and-traded after he signs an offer sheet with a rival team.
• A team acquiring a player via sign-and-trade cannot be over the first tax apron upon the conclusion of the deal and becomes hard-capped at the first apron for the rest of the league year.
• A free agent can’t be signed-and-traded once the regular season is underway.
• A free agent can’t be signed-and-traded using any exception that doesn’t allow for a three-year contract.
• A player receiving a designated veteran contract can’t be signed-and-traded.

Sign-and-trade contracts must cover either three or four seasons. However, only the first year of the deal needs to be fully guaranteed.

A sign-and-trade contract can be worth any amount up to the player’s maximum salary (with 5% annual raises) for a player who has full Bird rights. However, players with Non-Bird or Early Bird rights are subject to the restrictions of those exceptions.

For example, a player who only has Non-Bird rights and is signed-and-traded would be limited to a first-year salary worth up to 120% of his previous salary, 120% of his minimum salary, or the amount of his qualifying offer (if the player is a restricted free agent)

If a sign-and-trade contract includes a signing bonus, either team can agree to pay it, though if the signing team pays it, it counts toward that club’s limit for cash included in trades for that league year, so that’s uncommon. If a trade bonus is included, it would kick in upon any subsequent trade rather than as part of the sign-and-trade transaction itself.

The benefits and challenges of the sign-and-trade

Prior to the NBA’s 2011 Collective Bargaining Agreement, a free agent could receive a five-year contract via sign-and-trade, but that’s no longer the case — the contract restrictions for players acquired via sign-and-trade are the same as those that apply to a player signing outright with a new team via cap room (four years and 5% raises).

The goal of that change was to encourage top free agents to remain with their own clubs in order to maximize their earnings, rather than allowing them to sign similarly lucrative long-term contracts while changing teams.

In more recent CBAs, including the 2023 agreement, a specific set of circumstances is often required for teams and players to be incentivized to participate in sign-and-trades. If a player wants to change teams, it often makes more sense for him to sign with the new team outright, rather than making that club give up assets to complete the acquisition. Even the player’s old team may prefer to simply let the free agent walk and claim the resulting cap space, rather than taking back unwanted assets in a sign-and-trade.

There are other potential roadblocks complicating sign-and-trade deals as well. A signed-and-traded player’s salary may be viewed differently for salary-matching purposes than it would be in a standard trade, which can compromise a team’s ability to meet those salary-matching requirements. We outline those rules in our glossary entry on base year compensation.

However, if a potential suitor is operating over the cap and under the first apron, a sign-and-trade can make sense — especially if that club wants to sign the player for more than the mid-level amount, or if the club can offer the free agent’s prior team something of value.

Sign-and-trades can also come in handy when a team needs to aggregate one more contract in a trade for salary-matching purposes, or when a team that has already used its mid-level exception wants to add a second free agent in that mid-level range.

2024 sign-and-trades

During the 2024 offseason, eight players have changed teams via sign-and-trade. Five of those players were what we’d call “traditional” sign-and-trade participants — DeMar DeRozan (Kings), Klay Thompson (Mavericks), Buddy Hield (Warriors), Kyle Anderson (Warriors), and Kris Dunn (Clippers) were each acquired by teams who didn’t otherwise have the ability to offer the salaries those players received via sign-and-trade.

DeRozan’s and Thompson’s deals exceeded the mid-level exception and were completed by teams without cap room available; Hield, Anderson, and Dunn all got contracts in the mid-level range from clubs who had already used their MLE on another player.

A sixth player, Jonas Valanciunas, could’ve been signed using the Wizards‘ mid-level exception, but the Pelicans agreed to sign-and-trade him to Washington because it was a win-win for the two teams — New Orleans received a heavily protected second-round pick and a trade exception in the deal, while the Wizards absorbed Valanciunas using a trade exception and preserved their full MLE. They used a portion of that mid-level to sign Saddiq Bey, while the remainder could prove useful later in 2024/25.

The final two sign-and-trade contract recipients of the 2024 offseason, Shake Milton and Cody Zeller, were used as salary-matching pieces in the Mikal Bridges and Dejounte Murray trades, respectively.

Because Milton and Zeller were essentially salary filler in those deals and the Nets and Hawks weren’t specifically targeting them, both players received salaries just large enough to meet the matching rules and received only one guaranteed season on their new three-year contracts.

The second apron tweak

While it has become relatively common knowledge among NBA fans that teams above the first tax apron can’t acquire a player via sign-and-trade, a new wrinkle was introduced in the 2023 CBA affecting teams above the second tax apron.

A team that sends out a player via sign-and-trade cannot take back salary – either simultaneously or non-simultaneously – in exchange for that outgoing player if that team is operating above the second tax apron. A team that takes back salary for a signed-and-traded player becomes hard-capped at the second apron for the rest of the season.

For example, when the Timberwolves – who are operating above the second apron in 2024/25 – signed-and-traded Anderson to Golden State, they were prohibited from taking back any salary using Anderson’s outgoing salary for matching purposes. Although the Wolves technically created a trade exception worth approximately $8.8MM (Anderson’s new salary) in that deal with the Warriors, they’ll be ineligible to use that exception as long as their team salary remains above the second apron.

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 2013, 2019, and 2020.

Most salary cap workarounds, such as the mid-level exception, can be used every year — or at least every other year, as in the case of the bi-annual exception. However the disabled player exception is only available under certain circumstances. Like other salary cap exceptions though, the DPE allows a team to sign a player without using cap space.

If a player is seriously injured, his team can apply for the disabled player exception to replace him. In order for the exception to be granted, an NBA-designated physician must determine that the player is “substantially more likely than not” to be sidelined through at least June 15 of that league year.

If granted, the disabled player exception allows a club to sign a replacement player for 50% of the injured player’s salary or for the amount of the non-taxpayer’s mid-level exception, whichever is lesser.

For instance, if a team is granted a disabled player exception this season for a player earning $10MM, the exception would be worth $5MM. But if the injured player is earning $30MM, the DPE would be worth the equivalent of the mid-level exception ($12,822,000 in 2024/25).

A team must formally apply for a disabled player exception and it requires the approval of the NBA. If the league-designated physician determines the player will likely be fully recovered and available before June 15, the team’s request will be denied. That happened last season when the Knicks attempted to secure a disabled player exception for Mitchell Robinson‘s ankle injury. That turned out to be the right call by the league, given that Robinson returned to action in late March.

The cutoff to apply for a DPE each season is January 15. If a team has a player go down with a season-ending injury after that date, it cannot obtain a DPE to replace him. A team must also use the exception by March 10 of the current season or it will expire (this deadline can be pushed back to the next business day if March 10 lands on a weekend).

Unlike mid-level, bi-annual, or trade exceptions, the disabled player exception can only be used on a single player, rather than spread out across multiple players. However, a team can use it in a variety of ways — the DPE can be used to sign a free agent, to claim a player off waivers, or to acquire a player in a trade.

If a team uses its disabled player exception to take on salary in a trade, it can acquire a player making up to 100% of the DPE amount, plus $100K. For example, a $5,000,000 DPE could be used to trade for a player making $5,100,000.

A free agent signed using the DPE can only be offered a rest-of-season deal, while a player acquired via trade or waiver claim using the DPE must be in the final year of his contract. Essentially, the purpose of the exception is to give the team some flexibility to replace an injured player for the rest of the season, but not beyond the current season.

The team must have room on its roster to sign the replacement player — the disabled player exception doesn’t allow the club to carry an extra man beyond the usual limits.

In the event that a team is granted a disabled player exception, uses it to acquire a player, and then has its injured player return ahead of schedule (ie. before the end of the season), the team is allowed to carry both players.

However, if a team has an unused disabled player exception and then trades its injured player, the team would lose the exception. The same is true if the injured player returns to action before the DPE has expired or been used.

Most disabled player exceptions ultimately go unused. For instance, the Nuggets were granted a DPE due to DaRon Holmes‘ season-ending Achilles tear, but because he’s earning just $3,065,640 as a rookie, the exception is worth only $1,532,820, 50% of that amount. It doesn’t hurt for a team to have that tool as its disposal, but it will be difficult for Denver to do much with that.

More sizable disabled player exceptions can come in handy, most frequently in trades, where they can allow sometimes allow a team to generate a new trade exception with an outgoing contract rather than using it to match the incoming salary.

For example, after being granted a $12,405,000 DPE in the wake of Ja Morant‘s season-ending shoulder injury last season, the Grizzlies made a trade with Houston that sent out Steven Adams ($12.6MM) and brought back Victor Oladipo‘s expiring $9.45MM contract. Rather than using Adams’ outgoing salary as a salary-matching piece to acquire Oladipo, Memphis used its DPE to take on Oladipo’s deal, generating a new $12.6MM trade exception for Adams’ salary.

Notably, the Grizzlies had also been granted a separate $6.3MM disabled player exception for Adams after losing the big man to a season-ending knee injury, but they were forced to forfeit that DPE when they traded Adams away.

Note: This is a Hoops Rumors Glossary entry. Our glossary posts 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, 2017, and 2022.

For NBA teams looking to open up cap room, simply waiving a player isn’t as effective as it is in the NFL, where salaries are often non-guaranteed and most or all of a player’s cap charge can frequently be wiped from a team’s books. Still, the NBA’s Collective Bargaining Agreement does feature a rule that allows teams to spread a player’s cap hit over multiple seasons. This is called the stretch provision.

The stretch provision ensures that any player waived with more than $500K in guaranteed salary remaining on his contract will have the payment schedule of that money spread across multiple years. That schedule is determined as follows:

• If a player clears waivers between the start of the league year and August 31, his remaining salary is paid over twice the number of years remaining on his contract, plus one.
  • Note: A player must be waived by August 29 at 4:00 pm Central time in order to clear waivers on August 31.
• If a player clears waivers between September 1 and the end of his league year, his current-year salary is paid on its normal schedule, with any subsequent years spread over twice the number of remaining years, plus one.
• If a player in the final year of his contract clears waivers after September 1, the stretch provision does not apply.

While the new payment schedule for a waived player is non-negotiable, teams get to decide whether or not to apply the stretch provision to that player’s cap charges as well. A team can stick to the original schedule for cap hit purposes, if it so chooses.

Word broke on Wednesday that the Suns are waiving and stretching Nassir Little, providing a useful real-life example for how the stretch provision functions. Little’s cap hits prior to his release are $6.75MM in 2024/25, $7.25MM in ’25/26, and $7.75MM in ’26/27.

Here’s what that contract would look like if it were waived without applying the stretch provision to the cap hits; if it were stretched before August 31; or if it were stretched after August 31:

As this chart shows, it typically makes sense to waive and stretch a player’s contract in July or August if the team is looking to generate immediate cap flexibility for the current season and isn’t as concerned about the impact in future seasons.

By waiving and stretching Little now, the Suns will trim over $3.6MM from their 2024/25 cap, generating significant short-term savings in projected luxury tax penalties, since they’re operating so far into tax territory. However, Little will remain on their books through 2031 instead of 2027.

Phoenix is utilizing the stretch provision in order to create salary and tax savings. In other cases, stretching one or more players can allow a team to duck below the luxury tax line or to create additional cap room.

Back in the summer of 2022, for example, the Trail Blazers waived and stretched Eric Bledsoe and Didi Louzada, which allowed them to sneak below the tax line. The Pacers, meanwhile, waived and stretched Nik Stauskas, Juwan Morgan, and Malik Fitts in order to carve out a little extra cap room in order to sign Deandre Ayton to a maximum-salary offer sheet.

If a club waiving a guaranteed contract in July or August isn’t seeking immediate cap relief, it generally makes more sense to apply the player’s full current salary to the current salary-cap year, rather than stretching it.

The Hornets took that route when they waived Davis Bertans in July, applying his remaining $5.25MM in guaranteed money entirely to the 2024/25 cap. If they’d stretched it, they could’ve carried $1.75MM for each of the next three seasons, creating an extra $3.5MM in cap room this summer, but they had no immediate use for that cap room and decided it’d be better to clear Bertans from their books in one year, rather than in three years.

There are a few more key rules related to the stretch provision worth noting.

Buyouts:

While the stretch provision regulates when money is paid out, it doesn’t prevent teams and players from negotiating a reduced salary as part of a buyout agreement.

For instance, let’s say a player who has an $18MM expiring contract for 2024/25 agrees in August to give up $3MM in a buyout. As a result of that buyout agreement, his team could stretch his remaining salary and end up with cap hits of $5MM for three seasons (through ’26/27) rather than $6MM.

Non-guaranteed money/years:

Non-guaranteed money isn’t subject to the stretch provision, since a team isn’t obligated to pay the non-guaranteed portion of a contract once it waives a player. However, non-guaranteed years (not counting team options) are taking into account when determining how many years the contract is spread across.

This rule can come in handy when a club decides to waive a player who has one or two non-guaranteed years tacked onto the end of his contract. When the Blazers waived Louzada in August of 2022, he had three years left on his deal, but only his 2022/23 salary of $1,876,222 was guaranteed — the $4,023,212 owed to him for the two seasons beyond that one was fully non-guaranteed.

That means that when they waived Louzada, the Blazers only owed him just $1,876,222 but were able to stretch that figure across seven seasons (twice the three years remaining on his contract, plus one). As a result, Portland is carrying tiny $268,032 cap charges for Louzada on its books through the 2028/29 season.

The stretch limit:

A team isn’t permitted to stretch a player’s salary if the portion of the team’s salary made up of waived players projects to exceed 15% of the salary cap in any future seasons.

For instance, with a $154,647,000 salary cap projected for 2025/26, a team carrying $24MM in dead money for that season wouldn’t have been permitted to use the stretch provision while waiving a player on an expiring contract prior to August 31, 2024. This rule doesn’t come into play often, since it’s extremely rare for a team to carry that much dead money on its books for a future season.

The delayed stretch:

Under the current Collective Bargaining Agreement, if a team waives a player with multiple years of guaranteed money left on his contract and doesn’t utilize the stretch provision at the time of his initial release, the team could still choose to deploy the stretch provision on the contract in a future season.

For instance, when the Cavaliers bought out Ricky Rubio in January 2024, they initially took on cap hits of $3,722,327 for 2023/24 and $1,274,015 for ’24/25, opting not to use the stretch provision. However, prior to the August 31, 2024 deadline, the Cavs decided to stretch the final-year salary owed to Rubio, turning that $1,274,015 into three annual cap hits of $424,672, running through the ’26/27 season.

Rubio’s contract just had two years left on it at the time of his release, but if it had covered, say, four seasons, the Cavaliers could have made the decision to stretch his leftover salary at any time until August 31, 2026.

A contract can only be stretched once, so after stretching JaVale McGee‘s remaining salary across five seasons in 2023, the Mavericks wouldn’t be permitted to “re-stretch” it in a future season.

This delayed stretch rule only applies to contracts that have been terminated since the start of the 2023/24 league year.

Re-signing a stretched player:

Finally, it’s important to clarify that when a team applies the stretch provision to a player’s cap hits, that team becomes ineligible to re-sign the player for the original remaining term of his contract.

For example, after they stretch Little’s contract, the Suns won’t be able to re-sign him until July 2027, which is when his contract originally would’ve expired. That restriction doesn’t apply when a team waives a player and doesn’t stretch his remaining guaranteed salary.

If a team waives a player without stretching his remaining salary, then re-signs or reacquires him before his original contract would have expired, that team isn’t permitted to use the stretch provision on his new deal.

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 2013, 2017, and 2023.

There are a number of ways that NBA teams without salary cap space are able to add players. When we discuss trades and free agency at Hoops Rumors, we’ll often refer to these salary cap “exceptions.”

In case you’re wondering what exactly we mean when we mention a “Non-Bird exception” or a “bi-annual exception,” we’ve compiled a brief overview for reference. The NBA’s salary cap exceptions found in the latest Collective Bargaining Agreement are listed below, along with links to more extensive glossary entries on each exception.

• Bird Exception: If a player has been on the same team for three years (not necessarily full seasons), his team can re-sign him for up to the player’s maximum salary. Generally, a player who changes teams via trade retains his Bird rights, but he loses them if he signs with a new team as a free agent. A Bird player can sign for up to five years with maximum annual raises of 8%.
  • For further reference: Hoops Rumors Glossary: Bird Rights
• Early Bird Exception: If a player has been on the same team for two years (not necessarily full seasons), his team can re-sign him for up to 175% of his previous salary or 105% of the average player salary from the previous season, whichever is greater. Early Bird contracts must be for at least two seasons (no more than four), with maximum annual raises of 8%.
  • For further reference: Hoops Rumors Glossary: Early Bird Rights
• Non-Bird Exception: If a player finishes a season with a team without having earned Bird or Early Bird rights, his team can re-sign him for 120% of his previous salary, 120% of the applicable minimum salary, or – if he’s a restricted free agent – the amount of his qualifying offer. A Non-Bird player can sign for up to four years with maximum annual raises of 5%.
  • For further reference: Hoops Rumors Glossary: Non-Bird Rights
• Non-Taxpayer Mid-Level Exception: A team operating below the first tax apron can offer a player a contract for up to four years with maximum annual raises of 5% using the mid-level exception. The MLE amount for 2024/25 is $12,822,000; it will increase annually at the same rate as the salary cap. This exception, which can be used on one or multiple players, can also be used to acquire players via trade or waiver claim.
  • For further reference: Hoops Rumors Glossary: Mid-Level Exception
• Taxpayer Mid-Level Exception: A team operating below the second tax apron can offer a player a contract for up to two years with a maximum second-year raise of 5% using the mid-level exception. The taxpayer MLE amount for 2024/25 is $5,168,000; it will increase annually at the same rate as the salary cap. This exception, which can be used on one or multiple players, can only be used to sign players, not to acquire them via trade or waiver claim.
  • For further reference: Hoops Rumors Glossary: Mid-Level Exception
• Room Exception: If a team uses room under the cap to sign players, it forfeits its full mid-level exception and receives this exception, which isn’t available to teams above the cap. After using its cap room, a team can offer a player a contract for up to three years with maximum annual raises of 5%. The room exception amount for 2024/25 is $7,983,000; it will increase annually at the same rate as the salary cap. This exception, which can be used on one or multiple players, can also be used to acquire players via trade or waiver claim.
  • For further reference: Hoops Rumors Glossary: Mid-Level Exception
• Bi-Annual Exception: A team can offer a player a contract for up to two years with a maximum raise of 5% using the bi-annual exception. However, it’s only available to teams that operate over the cap and below the first tax apron. The bi-annual exception amount for 2024/25 is $4,668,000; it will increase annually at the same rate as the salary cap. This exception, which can be used on one or multiple players, can also be used to acquire players via trade or waiver claim. As its name suggests, the bi-annual exception can only be used every other year.
  • For further reference: Hoops Rumors Glossary: Bi-Annual Exception
• Minimum Salary Exception: A team can offer a player a contract for up to two years worth the applicable minimum salary. A team can also use this exception to trade for minimum-salary players, as long as their contracts don’t cover more than two seasons and never included a salary above the minimum. There is no limit to the number of players a team can acquire using this exception.
  • For further reference: Hoops Rumors Glossary: Minimum Salary Exception
• Rookie Scale Exception: A team can sign its first-round draft picks for up to 120% of the rookie salary scale amount or as little as 80% of the rookie salary scale amount. The rookie salaries for 2024 first-round picks can be found right here. The rookie scale increases annually at the same rate as the salary cap.
  • For further reference: Hoops Rumors Glossary: Rookie Scale Exception
• Second-Round Pick Exception: A team can sign a second-round pick to a three- or four-year contract with a team option on the final year. A contract signed using the second-round exception can exceed the applicable rookie minimum in the first year (or the first two years, for a four-year deal), but not in the final two years. The details for second-round pick exception signings in 2024/25 can be found right here.
  • For further reference: Hoops Rumors Glossary: Second-Round Pick Exception
• Disabled Player Exception: If a player suffers an injury deemed more likely than not to sideline him through the following June 15, a team can be granted this exception by the league. It can be used to sign a replacement player for one year, and is worth 50% of the disabled player’s salary or the amount of the non-taxpayer mid-level exception, whichever is lesser. It can also be used to acquire a player via trade or waiver claim if he’s in the final year of his contract. This exception, which must be applied for between July 1 and January 15, can only be used once and is forfeited if not used by March 10 (or the next business day, if March 10 falls on a weekend).
  • For further reference: Hoops Rumors Glossary: Disabled Player Exception
• Traded Player Exception: Any team can replace a traded player – or traded players – simultaneously (in the same transaction) with one or more players whose total salaries amount to no more than 100% of the outgoing salary. For teams operating below the tax aprons, the incoming value can increase to as high as 200% of the outgoing salary (plus $250K), depending on the amount of that salary. Alternately, both non-taxpaying and taxpaying teams can replace a traded player non-simultaneously (within one year) with one or more players whose total salaries amount to no more than 100% of the traded player’s salary.
  • For further reference: Hoops Rumors Glossary: Traded Player Exception

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.

Earlier versions of this post were published in 2012 and 2018.

The NBA’s maximum salary is determined by a player’s years of NBA experience. Players with between zero and six seasons under their belts are eligible for a starting salary worth up to 25% of the salary cap. That figure increases to 30% for players with seven to nine years of NBA experience, and to 35% for players with 10+ years of service.

However, there are certain scenarios in which a player can achieve a higher maximum salary than his years of service dictate. When a player who would normally qualify for the 30% max becomes eligible for a starting salary worth up to 35% of the cap before he gains 10+ years of NBA experience, he can sign a Designated Veteran contract, also known as a “super-max” deal.

A player who has seven or eight years of NBA service with one or two years left on his contract becomes eligible for a Designated Veteran contract extension if he meets the required performance criteria. A Designated Veteran contract can also be signed by a player who is a free agent if he has eight or nine years of service and meets the required performance criteria.

However, a player can’t sign a Designated Veteran deal with a new team — only his current team. Additionally, if he has been traded at any time since his first four years in the NBA or previously changed teams via free agency at any point in his career, he becomes ineligible for such a deal.

That means players like Donovan Mitchell, Lauri Markkanen, and Jalen Brunson would have had no path to becoming eligible for Designated Veteran deals with their current teams, but Brandon Ingram (who was traded during his first four seasons) could become eligible if he remains with the Pelicans and meets the performance criteria.

Speaking of that performance criteria, here’s what it looks like. At least one of the following must be a true for a player to be eligible to sign a Designated Veteran contract:

• He was named to an All-NBA team in the most recent season, or in two of the last three seasons.
• He was named NBA MVP in any of the three most recent seasons.
• He was named NBA Defensive Player of the Year in the most recent season, or in two of the last three seasons.

Given the exclusivity of the MVP and Defensive Player of the Year awards, players who qualify for a Designated Veteran contract do so most often by earning All-NBA nods.

Celtics forward Jayson Tatum was the only player eligible to sign a Designated Veteran contract this offseason. Tatum actually met the performance criteria a year ago by making his second consecutive All-NBA team, but he only had six years of NBA service at the time. He was able to sign his super-max extension this offseason once he registered his seventh year of service.

Tatum was named an All-NBA first-teamer again in 2024, but would have been eligible even if he’d missed out on an All-NBA spot this year, since his nods in 2022 and 2023 ensured he’d made an All-NBA team in at least two of the past three seasons.

Thunder guard Shai Gilgeous-Alexander and Mavericks guard Luka Doncic are following in Tatum’s footsteps. Both players have made All-NBA teams in each of the past two seasons but still have just six years of service under their belts. They’ll meet the service time criteria next summer and will be eligible to sign Designated Veteran contract extensions in July 2025 whether or not they earn All-NBA honors in 2024/25.

As outlined above, if the Thunder were to trade Gilgeous-Alexander or the Mavericks were to trade Doncic, they would no longer be super-max eligible. But obviously those 2024 MVP finalists aren’t going anywhere in the next year.

While the Designated Veteran rule allows players with fewer than 10 years of NBA experience to qualify for contracts that begin at 35% of the cap instead of 30%, the “Rose Rule” allows players with fewer than seven years of service to qualify for contracts that begin at 30% of the cap instead of 25%.

Those are technically two separate rules, and we’ve discussed the Rose Rule at greater length in a separate glossary entry. However, they’re closely linked, and both types of contracts are sometimes referred to a “super-max” deals.

Here are a few other rules related to Designated Veteran contracts:

• Even if a player qualifies for a Designated Veteran contract, his team isn’t obligated to start its extension offer at 35% of the cap. The player is eligible for a salary up to that amount, but the exact amount is still a matter for the two sides to negotiate. For example, after becoming super-max eligible in 2020, Rudy Gobert signed a contract with the Jazz that began at just over 31% of the cap.
• A Designated Veteran extension can’t exceed six years, including the number of years left on the player’s contract. So if a player signs a Designated Veteran extension when he has two years left on his current contract, he could tack on four new years to that deal.
• A player signing a Designated Veteran contract as a free agent can’t sign for more than five years.
• A Designated Veteran extension can only be signed between the end of the July moratorium and the last day before the start of the regular season.
• If a player signs a Designated Veteran contract, he is ineligible to be traded for one year.
• Under the 2017 Collective Bargaining Agreement, a team wasn’t permitted to carry more than two players on Designated Veteran contracts at a time. However, that rule didn’t carry over to the 2023 CBA and that limit no longer applies.

Our list of the players who have signed Designated Veteran contracts since their inception in 2017 can be found right here.

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 glossary entry were published in 2018 and 2023.

It’s common practice in the National Football League for a team to renegotiate its contract with a player, but we hear far less about the concept in the NBA. So can an NBA team actually renegotiate a contract with one of its players?

The answer is almost always no, and it’s a firm no if the follow-up question is whether the sides can renegotiate the value of the contract downward. Unlike NFL teams, an NBA club can’t create extra cap flexibility by renegotiating a contract to push present-day cap hits into future years.

However, renegotiations are allowed to make an NBA contract more lucrative, and they can happen as long as a specific set of circumstances are in place:

• Only contracts that cover four or more seasons can be renegotiated, though that rule doesn’t apply to rookie scale deals — even though they run for four years, they can’t be renegotiated.
• Renegotiations can only occur after the third anniversary of a contract signing, an extension, or a previous renegotiation (assuming the previous renegotiation increased the salary in any season by 5% or more).
• Perhaps most importantly, teams can’t renegotiate any contracts if they’re over the cap, and they can only increase the player’s salary in the current season by the amount of cap room they have (or to the player’s maximum salary).

If a renegotiation happens at the same time as an extension, the player’s salary can increase or decrease by as much as 40% from the last season of the existing contract to the first season of the extension. Following the first year of the extension, raises (or pay cuts) are limited to 8% annually.

Here are a few other rules related to contract renegotiations:

• Teams can’t renegotiate contracts between March 1 and June 30, so the last day of February is always the deadline to complete renegotiations in a given league year.
• Renegotiations can’t occur as part of a trade. If a player is traded, he’s ineligible to renegotiate his contract for the next six months. Similarly, if a player renegotiates his contract, he’s ineligible to be traded for six months.
• In order for a signing bonus to be included in a renegotiation, the contract must be extended as well.
• Two-way contracts can’t be renegotiated.

Renegotiating a contract to include a significant raise for the current season can be a clever way of incentivizing a long-term extension for a player who would otherwise reach free agency. Contract renegotiations are rare, due to the specific series of requirements necessary to pull them off, but we’ve seen a few completed within the past 13 months.

Domantas Sabonis renegotiated and extended his contract with the Kings last July, while Jordan Clarkson did the same with the Jazz. Jonathan Isaac also completed a renegotiation and extension with the Magic earlier this month.

The Clarkson and Isaac deals were prime examples of how teams can use their cap room in a current season to “overpay” a player in the short term in order to get him on more favorable terms in future seasons.

Clarkson, for instance, entered the 2023/24 league year on an expiring $14,260,000 base salary. The Jazz used their cap space to renegotiate that figure up to $23,487,629, then negotiated a 40% pay cut for the first season of a two-year extension, so Clarkson will earn $14,092,577 in ’24/25 and $14,285,714 in ’25/26. Simply offering that two-year, $28.38MM extension may not have been enough to get Clarkson to sign, but increasing his current-year salary by more than $9MM helped incentivize him to put pen to paper.

The Magic made a similar move with Isaac this summer, bumping his current salary all the way up to $25MM, then having it decline by 40% to $15MM for the first season of a four-year extension.

Sabonis, meanwhile, had a $19.4MM base salary in 2023/24 as he entered the final year of his current contract. The Kings didn’t have the cap room necessary to bump him up to his maximum salary of $40,806,300, but they were able to renegotiate his ’23/24 salary up to $28MM. From there, they gave Sabonis a 40% raise in year one of his extension, starting his new four-year deal at $39.2MM (plus incentives) in ’24/25.

This year’s top remaining renegotiation candidate is Jazz forward Lauri Markkanen, who is on an expiring $18,044,544 contract and will become eligible for a renegotiation as of August 6. Markkanen’s maximum salary for 2024/25 would be $42,176,400 and Utah is the only NBA team that has the cap room necessary to give him that $24MM+ raise.

If the Jazz and Markkanen do renegotiate his contract on or after August 6, it will be interesting to see what the terms of his extension look like. He has a case for a maximum-salary contract, but if Utah is essentially giving him $24MM+ in free, up-front money before the extension begins, the team may have some leverage to ask him to take less than his max.

I certainly wouldn’t expect the Jazz to try to negotiate a 40% pay cut for year one of a Markkanen extension like they did with Clarkson, but even a modest dip would make the forward’s contract more team-friendly down the road.

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 2015, 2017, and 2022.

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:

• 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.

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….

Simultaneous:

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.

Non-simultaneous:

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.

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.

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.