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Now updated with official salary numbers.
Yes. The salary cap is put in place so that a team cannot go out and sign every free agent available for the maximum amount of money. The exact salary cap figure for the 2018/19 season is $101.869 million. The salary cap figure for the 2017/18 season was $99.093 million. A bit less than $5 million increase from the year before. Previous Salary Cap Figures and Projected Figures
Teams are allowed to exceed the salary cap in order to re-sign their own players using the "Larry Bird" family of exceptions. The luxury tax threshold is the maximum amount of money teams are allowed to have in payroll in total. The luxury tax threshold for the 2018-19 season is $123.773 million. The luxury tax threshold for the 2017-18 season was $119.266 million to correspond with the salary cap increase. The amount of taxes a team pays is based on an incremental rate based on their team salary. They pay the repeater rate if they were taxpayers in at least three of the four previous seasons.
|Team salary above tax level||Non-repeater||Repeater|
|Lower-Upper||Tax rate||Tax rate|
|$20,000,000-N/A||$3.75, and increasing $.50 for each additional $5 million||$4.75, and increasing $.50 for each additional $5 million|
So if a team is $3 million over the limit and they weren't taxpayers the previous years they pay ($3 million x $1.50) = $4.5 million.
For example, the Cleveland Cavaliers payroll was $128,498,467 for the 2016-2017 season, when the Luxury Tax limit was $113.29 million. Remember that you are not allowed to traditionally sign over the salary cap, but your payroll is still allowed to exceed the salary cap if backloaded contracts push you past the figure. Note that many contracts in the NBA are backloaded by a small percentage of raises ranging from 3% to 8% annually (the highest figure for the max Bird rights contract).
Yes. There are four avenues through which a team restricted by the salary cap can sign a free agent -- through their mid-level exception, their bi-annual exception, through Bird Rights or through a contract worth the league minimum.
The mid-level exception (MLE) is given to a team yearly to allow them to pick up a decent free agent at a moderate price while evading salary cap constraints. There are three types of mid-level exceptions.
Non-Taxpayer Mid-Level Exception is only available to teams that are not paying the luxury tax or are paying less than $6 million above the tax line. This determination is made after the exception is used, so a team below the apron cannot use this exception if doing so takes it above the apron. It cannot be used by a team that has already used the Taxpayer Mid-Level Exception or the Room Mid-Level exception. This exception may be split and given to multiple players. It may be used for contracts up to four years in length, with raises up to 5% of the salary in the first year of the contract. Signing a player to a multi-year contract does not affect a team's ability to use this exception every year -- for example, a team can use this exception to sign a player to a four-year contract, and use it again the following year to sign another player. For the 2018-19 season, it is $8.641 million.
Taxpayer Mid-Level Exception is available only to teams with a team salary $6 million or more above the tax line. This determination is made after the exception is used, so a team below the apron must use this exception rather than the Non-Taxpayer Mid-Level exception if doing so takes them above the apron. This exception cannot be used if the team has already used the Bi-Annual, Non-Taxpayer Mid-Level or the Room Mid-Level exception. Starting in 2013-14, it cannot be used if the team has received a player that season in a sign-and-trade transaction. This exception may be split and given to multiple players. It may be used for contracts up to three years in length, with raises up to 5% of the salary in the first year of the contract. Signing a player to a multi-year contract does not affect a team's ability to use this exception every year. For the 2018-19 season, it is $5.337 million.
Room Mid-Level Exception is available only to teams that drop far enough below the cap to use cap room and lose their Bi-Annual, Non-Taxpayer Mid-Level, and Taxpayer Mid-Level exceptions. This exception cannot be used if the team has already used the Bi-Annual, Non-Taxpayer Mid-Level or Taxpayer Mid-Level exceptions. This exception becomes available once the team salary drops far enough that the team loses its other exceptions, and expires following the last day of the regular season. This exception may be split and given to multiple players. It may be used for contracts up to two years in length, with raises up to 5% of the salary in the first year of the contract. Signing a player to a multi-year contract does not affect a team's ability to use this exception every year. For the 2018-19 season, it is $4.449 million.
|Season||Non-Taxpayer First-Year Salary||Taxpayer First-Year Salary||Room First-Year Salary|
|2016-17||$5.628 million||$3.477 million||$2.898 million|
|2017-18||$8.406 million||$5.192 million||$4.328 million|
|2018-19||$8.641 million||$5.337 million||$4.449 million|
|2019-20||$9.162 million||$5.659 million||$4.717 million|
The bi-annual exception (BAE) is similar to the mid-level exception and is available only to teams that are not paying luxury tax or less than $6 million above the tax line. This determination is made after the exception is used, so a team below the apron cannot use this exception if doing so takes them above the apron. It cannot be used if the team has already used the Taxpayer Mid-Level Exception or the Room Mid-Level exception. This exception may not be used two years in a row. It may be split and given to more than one player, and can be used to sign players for up to two years, with raises limited to 5% of the salary in the first season of the contract. For the 2018-19 season, it is $3.4 million.
Any free agent can sign to a team for the league minimum for up to two years. The worth of this contract is determined by the player's seniority in the league. The contract may not contain a bonus of any kind. A table of how years in the NBA translates to the worth of a minimum salary can be found here. Teams can offer players minimum salary contracts even if they are over the cap. There is no limit to the number of players that can be signed or acquired using this exception.This exception can also be used to acquire minimum salary players via trade. This exception begins to reduce in value after the first day of the season. For example, if there are 170 days in the season, then this exception reduces in value by 1/170 of its initial value each day. So if a team signs a minimum salary player 90 days into the season, it can pay the player only 80/170 of the minimum salary.
This rule is named after Larry Bird, as the story goes that the Celtics back in the day were the first team to be allowed to go over the salary cap to sign a player to a lucrative contract. Essentially, if a player spends a few years with a team and then enters free agency, his former team can offer the free agent more years and more money than any other team and exceed the salary cap in order to do so. It is very important to note that Bird rights are transferable in trades, but not Early Bird rights. There are three types of Bird Rights.
Non-Bird Rights: Players who were on the team for the entire previous season (Example: Aron Baynes). You are allowed to offer the player up to 120% of his expiring amount. The contract can be for 1-4 years.
Early Bird Rights: Players who were on the team for parts of the past 2 seasons. Trades transfer bird rights. (Example: Kevin Durant). You are allowed to offer the player up to 175% of his expiring amount. The contract can be for 2-4 years.
Bird Rights: Players who were on the team for parts of the past 3 seasons. Trades transfer bird rights. (Example: Trevor Ariza). You are allowed to offer the player up to their maximum salary. The contract can be for 1-5 years.
A cap hold is a theoretical salary placeholder that exists for teams that are expected to sign in the future, such as Bird Rights free agents or unsigned first round draft picks. This is done in the interest of fairness so that, as an example, a team cannot go and sign big name free agents, remain $1 under the salary cap, and then sign their Bird Rights free agent to a max contract. Cap holds remain part of a team’s payroll until the team either signs the cap held player or renounces the rights to that player. For counting of cap holds you only need to count the players that you intend to re-sign, for each type of right the value is different. A players cap hold cannot be more than their maximum salary.
|Non-Bird||120% of expiring|
|Early-Bird||130% of expiring|
|Bird, making above league average||150% of expiring|
|Bird, making below league average||190% of expiring|
|Bird, coming off rookie scale and above average||250% of expiring|
|Bird, coming off rookie scale and below league average||300% of expiring|
|1st round picks||120% of the rookie scale|
Sometimes players and teams decide to divorce each other. They do this by mutually agreeing that: the team will waive the player, if the player clears waivers, the player's guaranteed salary will be reduced or eliminated, and in contracts signed or extended under the previous CBA, the payment schedule for the remaining salary may be shortened or lengthened. Any guaranteed salary still owed to the player as the result of a buyout continues to be included in team salary, just as with any waived player
After the player clears waivers, he and his former team are free to go their separate ways. There is a quid-pro-quo between the player and team regarding contractual obligation and salary -- in exchange for gaining his freedom, the player agrees to give the team a break on the remaining salary he is owed.
However, on January 10 all contracts become guaranteed for the remainder of that season. Although compensation protection ensures the player is paid after he is waived, the compensation protection does not kick-in if the player is waived after January 10, because the player does not lose any salary. Even though the team and player can mutually agree to reduce or eliminate the player's compensation protection, he is still owed his full salary if waived after January 10. The exception is that in the last season of a player's contract a team and player can choose to eliminate the protection that kicks-in on January 10.
July 6th. Until then, starting July 1st, free agents are allowed to meet with suitors.
There are two types of free agents – restricted free agents, and unrestricted free agents. Restricted free agents can accept contract offers from other teams, but their previous team has a chance to match said offer and keep the free agent. First round draft picks become restricted free agents after teams pick up their fourth year of their rookie contract and offer a qualifying offer at the rookie-scale amount at its conclusion. For all other players to become restricted free agents, he must be at most a three-year NBA veteran and his previous team must have made him a qualifying offer for either 125% of his previous season’s salary or $200,000 (whichever is higher). Unrestricted free agents are more traditional and may sign with whatever team that they please.
Two, again: a player option and a team option. A player with a player option can decide whether or not he would like to enable the final year of his contract. If he refuses, he becomes an unrestricted free agent. A player with a team option must wait for his team to decide whether or not they would like the player to return for his final year of the contract. Team options are very rare outside of rookie contracts.
Before 2005 it was sometimes possible to sign restricted free agents to offer sheets their original teams couldn't match. This happened when a player was an Early Bird or Non-Bird free agent (see question number 25) and the team didn't have enough cap room to match a sufficiently large offer. For example, Gilbert Arenas was Golden State's second round draft pick in 2001, and became an Early Bird free agent in 2003. Golden State could only match an offer sheet (or sign Arenas directly) for up to the amount of the Early Bird exception, which was about $4.9 million at the time. Washington signed Arenas to an offer sheet with a starting salary of about $8.5 million, which Golden State was powerless to match
Teams are now limited in the salary they can offer in an offer sheet to a restricted free agent with one or two years in the league. The first-year salary in the offer sheet cannot be greater than the Non-Taxpayer Mid-Level exception. Limiting the first-year salary in this way enables the player's original team to match the offer sheet by using the Early Bird exception or Non-Taxpayer Mid-Level exception. The second-year salary in such an offer sheet is limited to the standard 5% raise. The third-year salary can jump considerably -- it is allowed to be as high as it would have been had the first-year salary not been limited by this rule to the Non-Taxpayer Mid-Level exception2. The salary in the fourth season may increase (or decrease) by up to 4.1% of the salary in the third season. The offer sheet can only contain the large jump in the third season if it provides the highest salary allowed in the first two seasons, it is fully guaranteed, and it contains no bonuses of any kind.
The highest-paying contract that a team can pay a player. This, again, is a function of a player's service time. Projected for the 2018-19 season players with 0-6 years may earn 25% of the cap ($25,250,00 annually), a player with 7-9 years may earn 30% of the cap ($30,300,000 annually), and a player with 10+ years may earn 35% of the cap ($35,350,000 annually).
Each team in the NBA can nominate a maximum two player to a "Designated Player" contract extension. A Designated Player is eligible for a 5-year contract extension, instead of being held to the standard 4-year restriction. Teams can assign to players on rookie contracts, their own veteran contracts (who meet the requirements), or players on those deals acquired in trades.
Under the 5th Year 30% Max Criteria, more commonly known as the Derrick Rose Rule, a first round draft pick who completed all four years of his rookie contract, a second round draft pick, or an undrafted player with four years of service may receive a maximum contract worth 30% of the salary cap annually by meeting certain criteria: named to an All-NBA team at least twice, voted as a starter in the All-Star game at least twice, or be named MVP at least once.
Under the new CBA, the criteria has changed, players who come off rookie contracts at the end of the 2017–18 season, or later, must meet any of the following criteria to qualify: named to an All-NBA team (at any level) in the player's fourth season (or in two of the three seasons between his second and fourth seasons), named as a Defensive Player of the Year in the player's fourth season (or in two of the three seasons between his second and fourth seasons), or named as MVP in any season from the player's second onward.
The Designated Veteran Player Extension (DVPE), also known as the Kevin Durant Rule, allows teams to create Designated Player contracts for their own veteran players, officially known as the "Designated Veteran Player Extension" (DVPE), came to be called the "Kevin Durant Rule" because it was seen as a reaction to a wave of veteran superstars leaving their teams in free agency, capped off by Durant's departure from the Thunder to the Golden State Warriors in the 2016 offseason. The 2011 CBA allowed all of the teams that were trying to lure Durant to offer him the same initial salary of $26.5 million.
For a veteran player to qualify for such an extension, he must be entering his eighth or ninth season in the NBA, and have either: made the All-NBA team (at any level) in either the season immediately before signing the extension (or two of the three previous seasons), been named NBA Defensive Player of the Year in either the season immediately before signing the extension (or two of the three previous seasons), or been named NBA MVP at least once in the previous three seasons. Additionally, the team offering the extension must have originally drafted the player, or obtained him in a trade while he was on his rookie contract.
A summer contract is typically used for training camp invitees (usually undrafted free agents) because the player's salary is not included in team salary until the first day of the regular season. In other words, it is a "make-good" contract -- the player must make the team's opening day roster in order to receive his salary and for his contract to be included in team salary. If the player is a veteran free agent who last played for that team, the contract must be for one season at the minimum salary. In all other cases, there are no special limits to the salary or number of years.
Two-Way contracts are designed to allow players to fluidly transition between the G-Leauge and NBA. Instead of having to sign 10-day contracts, players can sign these instead. He can spend up to 45 days with a NBA team. Every team is allowed to sign up to two players to this type of contract. These contracts don't count against the 15-man roster, so in total teams now have 17 roster spots. The requirements for signing are that the player must have 3-years or less NBA experience. Players can sign either one-year or two-year year contracts. Except players entering with three years of service who can only sign a one-year deal. At the end of the contract, the NBA team will have the right to tender a qualifying offer to the player.
If you are interested in learning more about this new feature of the CBA, I made a more in-depth post exlpaining how it works here.
Any of 25 existing teams with a G-League affiliate can pay up to $50,000 for training camp invitations for players. Each team gets a max of four affiliate players, who can then be assigned to their G-League affiliate with a $26,000 salary from the affiliate team. Unlike the two-way, the NBA team doesn't have exclusive rights to the affiliate player, so they can sign to anywhere in the league. The new addition of affiliate players was created to entice players to try the G-League rather than go overseas. Players are more likely to go to the G-League as a result since they have a chance to make $76,000 (or $69,500 for Level B) to stay in the U.S. and have a better shot to play in NBA.
The main restrictions that exist in trades are clauses that give a player vetoing rights to a trade such as the loss of Early Bird rights or a no-trade clause in a contract (i.e. Lebron James, Carmelo Anthony). Other than that, trades are fair game as long as salaries can be reasonably matched for teams above the salary cap.
What this means is that teams above the cap (or teams below the cap but would end up more than $100,000 over the cap following a trade) cannot acquire more than 125% plus $100,000 they trade away. So if I'm the Nets and I want to trade for Kevin Durant I would have to give up enough money in the trade (125% of all the contracts I'm sending over plus $100,000) to either match KD's salary, or give up so much salary that absorbing Durant’s contract would actually save me money.
Ah, the golden question. This is where people can dream up the wildest of scenarios. A sign-and-trade is when a free agent's former team signs the player then trades said player to another team for assets such as picks, players, etc. This is useful because it allows teams that are over the cap to acquire free agents who would otherwise demand contracts too large to allow the team to sign them. Moreover, a team cannot sign-and-trade for a player if they are at the luxury tax apron, or will be pushed over following the SNT. They can still, however, acquire assets if another team sign-and-trades for their former player. Furthermore, a maximum Bird Rights contract cannot be awarded to a player involved in a sign-and-trade. Said player would have to settle for the non-Bird Rights maximum contract.
Consider the case of Players A, B, and C. A and B are on my team, C is on another team. I trade A to a different team for no salary compensation. Say I get a second round pick in return or something. I then get a trade exception worth player A's contract. Say it's worth $10. I want to trade for Player C. Now suppose my team and player C's team are both over the salary cap, so there's little wiggle room in terms of negotiating contracts for a trade. I want to trade for Player C. His contract is worth $7. I can trade Player A's trade exception, Player B, whose contract is worth, say $1, to player C's team and get Player C. Why? Because the trade exception allows me to basically ignore the amount of Player C's contract that would prevent me from trading for him, since I'm over the salary cap. Heck, I could even do a draft pick and Player A's trade exception for Player C. So long as the contract I'm trading for doesn't exceed Player A's original value.
If I got any information wrong, didn't explain something well enough, or if you think I should include anything else in the FAQ let me know! If you have any specific questions, drop them below. I'll try to answer as many as I can.
GAME TIME: 7:30 PM PST
GOLDEN STATE WARRIORS vs. CHARLOTTE HORNETS
TV: NBATV, ESPN3
Radio: Warriors Mobile App
Location: Thomas & Mack Center, Las Vegas, Nevada
|G||Shannon Scott||Josh Magette|
|G||Dwayne Bacon||Kendrick Nunn|
|F||J.P. Macura||Rion Brown|
|F||Miles Bridges||J.P. Tokoto|
|C||Willy Hernangomez||Marcus Derrickson|
|GSW||Jordan Bell||F||Sore Left Shoulder (Out)|
|GSW||Jacob Evans||F||Resting (Out)|
|GSW||Jordan Howard||G||Left Knee Strain (Out)|
|GSW||Damian Jones||C||Sprain Knee (Out)|
|CHA||Devonte' Graham||G||Knee Swelling (Out)|
|CHA||Malik Monk||G||Fractured Right Thumb (Out)|
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