After long weeks of negotiations, the players’ union and the NBA have agreed on the amount of the salary cap, which will be the same as last season, namely $ 109.14 million (the luxury tax at $ 132.6 million ), which means that the max contracts will be the same. However, players will be tapped 10% of their salary, in anticipation of losses (If need be to reduce salaries by more than 10%, losses will be spread over the coming season as well as the next two, and players will not can never suffer a deduction of more than 20% in a single season). Note that the figures in this article do not take into account the 10% which will be deducted.
You should know that the NBA collective agreement governs these contracts and its principles are very complex (Don’t forget to watch our big tutorial on the subject). Regarding max contracts, this is what interests us above all, they depend first of all on the player’s seniority in the league. There are 3 categories
- 0 to 6 years in the league
- 7 to 9 years in the league
- more than 10 years in the league
Since the CBA 2011, contracts can no longer last more than 5 years. Depending on how the player is signed, the limitation may be even lower (for example, a player signed with the BI-Annual Exception can only sign for two years). To encourage players to stay on their starting team, the contract period offered by a team other than the original one is only 4 years. In addition, NBA contracts are progressive, that is to say that the salary of a player increases from one year to the next. Here again, this increase is strictly controlled, and cannot exceed 8%. Also to encourage players to stay on their starting team, this percentage is only available for players who re-sign at the same location; if they sign for another team, this increase is only 5%.
Then the exceptions come into play when the team must exceed the salary cap to re-sign its player (to find out everything, take a look here):
1.Les exceptions « Bird »
These exceptions are available for all teams: those who are below the salary cap and who have no choice but to exceed it to resign a player, and those who are already above the salary cap.
- Larry Bird Exception: it is the best known, and the most used. It allows a team to resign one of its players who have reached the end of their contract, even if it must exceed the salary cap for this. For this, the player must be under contract for at least three years, without having been cut or having changed teams as a free agent. On the other hand, having been exchanged does not lose what are called “Bird Rights”.
- Early Bird Exception: as the name suggests, this exception is a weakened version of the previous one. The principle is the same, but the condition is this time two years of contract, and the salary is more tightly controlled: it must not exceed 175% of the previous salary, nor the average salary of the league. The signed contract must be at least two years old.
- Non-Bird Exception: this exception concerns all players not eligible for the previous two, or whose teams did not want to activate these two to extend them. Again, the salary is regulated: no more than 120% of the previous salary, no more than 120% of the minimum wage.
2. The other exceptions
Mid-Level Exception: it is one of the most used, called MLE. It allows you to sign one or more free agents while being above the salary cap, but can only be used once a year (unlike Bird Exceptions). Its amount depends on the financial situation of the team:
- Mid-Level Exception: It is $ 9,258 million and makes it possible to offer up to 4 years of contract for teams that do not exceed the “apron” of the luxury tax, that is to say a limit located $ 6 million above. the amount of the tax ($ 132.6 million).
- Mini Mid-Level Exception: It is $ 5,718 million and can offer up to 3 years of contract for teams who exceed this famous apron.
- Finally, a third version, called Room Exception, is available for teams below the salary cap. This was a novelty of the CBA 2011, which allows teams to exceed the salary cap after using their space below the cap. It is for a maximum of 2 years for $ 4,767 million.
Bi-Annual Exception (BAE): like the MLE, it allows a franchise to sign one or more players for a certain sum, $ 3,623 million in this case (and for a maximum of two years). But the difference is that it can only be used one year out of two, and that it is only available for teams under the famous “apron”. It can only be used with the $ 9,258m version of the MLE, not with the other two.
3. Les contrats Super Max (Designated Veteran Player contracts ou extensions)
After this little recap, it should be noted that there is something new in the collective agreement signed three years ago, the arrival of Designated Player contracts or extensions concerning players who have been in the NBA for less than 10 years) , of which this summer, only 2 players are eligible (according to performance criteria, MVP, All-NBA Teams, defender of the year …) to the signing of a super max extension: Rudy Gobert and Giannis Antetokounmpo. Their extension would start in 2021-22.
No other player is eligible for signing a 5-year super max contract, with from the 1st year and despite less than 10 years of experience in the league, a salary of up to 35% of the salary cap (up to there you had to have at least 10 years of experience to have 35% of the salary cap). Other NBA players who have between 7 and 9 years of seniority in the NBA cannot claim a salary higher than 30% of the salary cap. Here’s what it would have been like if a player had been:
- 38.199 million dollars in 2020/21
- $ 41.255 million in 2021/22
- $ 44.311 million in 2022/23
- $ 47.367 million in 2023/24
- 50,423 million dollars in 2024/25
The other teams could not offer better than 140.791 million dollars over 4 years.
4. Max contracts
As for the grid below on the 1st line where you can read 6 years or less, that corresponds to seniority in the NBA.
For example in the case of DeMar DeRozan (who can decline his player option and become a free agent), who has 11 years of experience in the NBA, can sign a max contract of 5 years for 221.554 million dollars with the Spurs against only 4 years and 164.256 million dollars with another team.
A player like Anthony Davis, who has been in the NBA for 8 years, can sign him a contract of 189.904 million dollars over 5 years with the Lakers and 140.791 million dollars over 4 years with another team.
Here are these different contracts depending on the situation of the player and the team.
For a player who re-signs with his team (8% increase, up to 5 years of contract)
| Year | 6 years or less | 7-9 years | + 10 years |
|---|---|---|---|
| 2020/21 | $27,285,000 | $32,742,000 | $38,199,000 |
| 2021/22 | $29,467,800 | $35,361,360 | $41,254,920 |
| 2022/23 | $31,650,600 | $37,980,720 | $44,310,840 |
| 2023/24 | $33,833,400 | $40,600,080 | $47,366,760 |
| 2024/25 | $36,016,200 | $43,219,440 | $50,422,680 |
| Total | $158,253,000 | $189,903,600 | $221,554,200 |
For a player who signs with a new team (5% increase, up to 4 years contract)
| Year | 6 years or less | 7-9 years | + 10 years |
|---|---|---|---|
| 2020/21 | $27,285,000 | $32,742,000 | $38,199,000 |
| 2021/22 | $28,649,250 | $34,379,100 | $40,108,950 |
| 2022/23 | $30,013,500 | $36,016,200 | $42,018,900 |
| 2023/24 | $31,377,750 | $37,653,300 | $43,928,850 |
| Total | $117,325,500 | $140,790,600 | $164,255,700 |
5. Minimum contracts
They depend on seniority in the league
| Years of experience | Salary |
|---|---|
| 0 | $898,310 |
| 1 | $1,445,697 |
| 2 | $1,620,564 |
| 3 | $1,678,854 |
| 4 | $1,737,145 |
| 5 | $1,882,867 |
| 6 | $2,028,594 |
| 7 | $2,174,318 |
| 8 | $2,320,044 |
| 9 | $2,331,593 |
| 10+ | $2,564,753 |
6. Les Two-Way contracts
Also note the salary scale for Two-Way contracts, these contracts that teams can offer to two players who can both belong to a G-League team and to the NBA franchise, which avoids signing multiple contracts. . Eligible players must be under 4 years old in the NBA and these contracts are for a maximum of 2 years. Note that a player with a two-way contract cannot spend more than 45 days with the NBA team from the start of the G-League regular season.
For an ultra complete tutorial on free agency it’s here
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