All NBA players sign the league’s standard contract template. But depending upon his years of service in the league, his skill, and other factors covered by the CBA, a player’s rights under that standard contract can still vary widely. Those variations are discussed here.
uniform player contract
The Uniform Player Contract is the standard contract template between a team and each player. The template, 45-pages long, is attached to the CBA as “Exhibit A” and includes ten potential exhibits. The first 28 pages of the template are not negotiable (and players and their agents only receive a PDF of this part.) The items that players can negotiate are limited to the areas covered by the template’s ten exhibits — most notably, the amount of their compensation. Some of the other provisions players can negotiate are:
Compensation protection if the team terminates the player’s contract for (i) lack of skill, (ii) death, (iii) a basketball-related injury or other injury or illness (but a player’s compensation can only be protected for either a basketball-related injury or the other injury or illness, but not both), or (iv) mental disability.
Eliminating a player’s right to receive his base compensation when he re-injures an issue that existed before the contract was signed.
Trade bonuses, limits (or outright prohibitions) on the player being traded to another team, and sign-and-trade provisions that make the contract’s validity contingent on the successful completion of the trade.
With a number of exceptions outlined below, all contracts (or extensions) may only cover 4 seasons from the date they’re signed. Calculating the number of seasons covered by a contract (or extension) is set by these rules:
If a contract or extension is signed after training camp starts, then the current season is counted as a full season covered by the contract or extension.
If an extension is signed between the end of the playoffs and June 30, then the just-completed season is counted as a full season covered by the extension.
Standard nba contract
A Standard NBA Contract is simply any Uniform Player Contract that is not a Two-Way Contract. Every Two-Way Contract must include a team option to convert the contract to a Standard NBA Contract. This conversion option is called a Standard NBA Contract Conversion Option (and matters for two-way players because it’s the mechanism that gets them on an NBA roster full-time at an NBA salary).
ROOKIE SCALE CONTRACT
A Rookie Scale Contract is the initial Uniform Player Contract between a team and its first round draft pick. The contract must be for 2 years, with a team option for both the 3rd and 4th years. A player’s compensation under a Rookie Scale Contract is determined by the rookie salary scale.
The team option for the player’s 3rd and 4th years can be exercised from the day after the applicable season ends through the next October 31.
Extensions of Rookie Scale Contracts are discussed below.
DesignateD Veteran Player Contract
A Designated Veteran Player Contract is a contract between a team and a free agent with 8 or 9 years of service in the league that covers 5 seasons. Once signed, the player may not be traded for one year.
To be eligible for this contract, the veteran must (i) have played his entire career for the same team (or if he changed teams, did so only by trade during one of his first four seasons in the league), and (ii) met at least one of the max performance-based criteria.
The player’s salary in the first year of the contract must be at least 30% and no more than 35% of that year’s salary cap. The potential for a player with less than 10 years of service to earn 35% of the salary cap is what makes this a “super max” contract. More details about the maximum player salary for these players are available here.
No team may have more than two players under a Designated Veteran Player Contract (or a Designated Veteran Player Extension).
Renegotiations are amendments to a contract that increase (and only increase) a player’s salary during the contract’s existing term. If a player renegotiates an increase to his salary, the salary in each remaining season of the contract must also be increased over the original salary. Some of the important rules relating to renegotiations are:
For each season of the contract after the renegotiation takes place, the player’s additional salary may increase or decrease by up to 8% (instead of 5%) of the increase in salary from the renegotiation season. (The year-over-year decrease is possible as long as the player’s salary in each remaining season of the contract’s existing term is still higher than the original salary.)
Limitations on Renegotiations —
A contract covering 4 or more seasons may not be renegotiated until the third anniversary of the signing of the contract;
A contract that was already renegotiated to provide for a salary increase of more than 5% or that was already extended may not be renegotiated until the third anniversary of the signing of the original renegotiation or extension; and
A contract may not be renegotiated from March 1 through June 30.
Extensions are amendments to a contract that add seasons to the contract’s existing term. Summarized below are some of the general rules around extensions, followed by a breakdown of four categories of extensions: (1) a “regular” extension of a rookie’s Rookie Scale Contract, (2) a Designated Rookie Scale Player Extension, (3) a “regular” extension of a veteran’s contract, and (4) a Designated Veteran Player Extension.
General Rules —
Contracts covering 1 or 2 seasons (including any option year) cannot be extended.
Contracts covering 3 or 4 seasons (including any option year) may be extended on the second anniversary of being signed.
Contracts covering 5 or 6 seasons (including any option year) may be extended on the third anniversary of being signed.
Extensions of Rookie Scale Contracts — Any Rookie Scale Contract can be extended during the off-season before the rookie’s fourth year in the league (i.e., July 1 to the day before the regular season).
Regular Extensions —
A regular extension of a Rookie Scale Contract may add up to 4 new years to the player’s contract (for a total of 5 years when the remaining year is included, as these contracts can only be extended just before the fourth year of the contract, between the end of the moratorium period in July through the day before the regular season season starts).
The player’s salary in the first year of the extended term can be any amount up to his applicable maximum annual salary. Salary may increase (or decrease) in the extended term by up to 8% (instead of 5%) of the salary in the first year of the extension.
Designated Rookie Scale Player Extension —
A “Designated Rookie Scale Player Extension” adds 5 new years to the player’s Rookie Scale Contract (for a total of 6 years when the remaining year is included). To sign this extension, the player must be a qualifying veteran free agent at the time his Rookie Scale Contract ends. Players signed under this rule must have a first year salary in the extended term of at least 25% of that year’s salary cap.
No team may have more than two players under a Designated Rookie Scale Player Extension, and only one of these players may be acquired through a trade. (The latter rule around trades, which does not apply to veterans, is what prevented the Boston Celtics from trading for Anthony Davis at the 2018-19 trade deadline when they already had acquired Kyrie Irving through a trade.)
Extensions of Veteran Contracts —
Regular Extensions — Unless a veteran’s contract is going to be extended during the last season of his contract, the extension can only be negotiated and entered into during the off-season (i.e., July 1 to the day before the regular season).
A regular extension of a veteran’s contract may cover 5 years (including the years remaining on the original contract when the extension is signed).
The player’s salary in the first year of the extension may be up to the greater of: (i) 120% of the player’s salary in the last year of the original contract, and (ii) 120% of the estimated average player salary in the year the extension is signed. Salary may increase (or decrease) in the extended term by up to 8% (instead of 5%) of the salary in the first year of the extension.
Designated Veteran Player Extension — A “Designated Veteran Player Extension” may cover 6 years (including the years remaining on the original contract). A veteran’s contract may only be extended using this rule after the third anniversary of the signing of the original contract and these extensions may only be negotiated and entered into during the off-season (i.e., July 1 to the day before the regular season).
To be eligible for this extension, the veteran must (i) have only one or two seasons remaining on his current contract, (ii) be entering his 8th or 9th season in the league, (iii) played his entire career for the same team (or if he changed teams, did so only by trade during one of his first four seasons in the league), and (iv) have met at least one of the max performance-based criteria.
If eligible for this extension, the player’s salary in the first year of the extension must be at least 30% and no more than 35% of that year’s salary cap. The potential for a player with less than 10 years of service to earn 35% of the salary cap is what makes this a “super max” contract. Salary may increase (or decrease) in the extended term by up to 8% (instead of 5%) of the salary in the first year of the extension. More details about the maximum player salary for these players are available here.
Once signed to a Designated Veteran Player Extension, the player may not be traded for one year.
No team may have more than two players under a Designated Veteran Player Extension (or a Designated Veteran Player Contract).
The CBA permits two types of contract options — (1) an option to extend the term and (2) an option to terminate it early.
An option is the right to extend a contract for additional seasons. Depending on how the contract is negotiated, this option can run in favor of the team or the player.
An early termination option is the right to end a contract early. Early termination options can only run in favor of the player. An early termination option may only follow, at the earliest, the end of the fourth season covered by the contract.
Both an option and an early termination option must be exercised on or before the June 30 preceding the option year (or, in certain cases, by June 25 if not exercising the option would cause the player to become a restricted free agent).
For a first round pick, the Required Tender must (i) be given to the player by the July 15 after the draft, (ii) give the player until at least the first day of the upcoming regular season to accept it, and (iii) and satisfy the Rookie Scale Contract requirements. (The timing provisions are more complicated if a player does not sign with the team that drafted him, because a team can preserve its draft rights.)
For a second round pick, the Required Tender must (i) be given to the player by two weeks before the September 5 after the draft, (ii) give the player until at least the following October 15 to accept it, (iii) cover 1 season, and (iv) pay at least the applicable minimum annual salary.
If a team does not timely make a Required Tender to its draft rookie, then the draft rookie will become a rookie free agent (on July 16 for a first round pick and on September 6 for a second round pick). Once made, a Required Tender may only be withdrawn if the player agrees to the withdrawal (and if it’s withdrawn, the player immediately becomes a rookie free agent).
It cannot exceed 2 seasons in length. It cannot be extended or renegotiated. It cannot include an option or an early termination option. It cannot contain any bonuses. It cannot be signed after January 15 of any season.
A Two-Way Contract cannot be signed by a player that has (or may have during its term) 4 or more years of service (for example, a player with 3 years of service cannot sign a 2-year Two-Way Contract). Nor can a player sign a Two-Way Contract that would result in the player being under a Two-Way Contract for any part of more than 3 seasons with the same team (for example, a player that just completed a 2-year Two-Way Contract cannot then sign another 2-year Two-Way Contract with that team).
All Two-Way Contracts must include the Standard NBA Contract Conversion Option. This option (once exercised) must provide for (i) salary equal to the player’s applicable minimum player salary, and (ii) a term that matches what’s remaining on the original Two-Way Contract. This option may only be exercised between July 1 and the team’s last regular season game for each season covered by the Two-Way Contract.
Like a Summer Contract (discussed below), the two-way salary in a Two-Way Contract does not count towards a team’s team salary (so a team does not need to have room or a salary cap exception to sign, acquire, or convert a player to a Two-Way Contract).
Summer Contract — A Summer Contract’s primary importance is that it doesn’t count towards a team’s team salary. These contracts can only (i) be signed from July 1 until the day before the regular season and (ii) include compensation of $2,000 per week (pro rata), as well as per diem, lodging, transportation, and a disability insurance policy. These contracts cannot include any compensation protection. Teams must terminate Summer Contracts before the first day of the regular season, unless they have room to sign the player or are able to use the minimum player salary exception. Any Summer Contract that is not terminated before the first day of the regular season is then included in that team’s team salary.
Non-Guaranteed Training Camp Contract — A Non-Guaranteed Training Camp Contract allows teams to terminate a player’s contract prior to the first day of the regular season and pay minimal amounts to that player. If the player is healthy but is cut anyways, he will receive the $2,000 weekly pay (pro rata) that players under Summer Contracts received. If the player is injured and cut, he will only receive $6,000.
These contracts must (i) cover 1 season, (ii) provide for the minimum player salary (with no bonuses of any kind) or two-way salary without any compensation protection, and (iii) include an Exhibit 9 to the Uniform Player Contract.
At the time this contract is signed, a team must have at least 14 players under contract without an Exhibit 9. At the same time, no team may have more than 6 players under a Non-Guaranteed Training Camp Contract.
Exhibit 10 Contract — A Uniform Player Contract that includes an Exhibit 10 allows teams to waive a player, but then pay that waived player a bonus of between $5,000 to $50,000 if they timely sign a contract with the team’s G league affiliate and play with that G league team for 60 days. The Exhibit 10 also allows teams to convert the contract to a Two-Way Contract prior to the first day of the regular season (without waiving the player) — this is called a “two-way player conversion option.” If a team converts the contract to a Two-Way Contract, then the bonus is converted into compensation protection. And because the Exhibit 10 allows the contract to be converted into a Two-Way Contract, the Exhibit 10 also includes the Standard NBA Contract Conversion Option.
These contracts must (i) cover 1 season (ii) provide for the minimum player salary (with no bonuses of any kind other than the Exhibit 10 bonus) without any compensation protection (other than in connection with the two-way player conversion option), and (iii) include an Exhibit 10 to the Uniform Player Contract.
No team may have more than 6 players under contract with an Exhibit 10.
A player’s contract can include both an Exhibit 9 and an Exhibit 10, but if the team exercises the two-way player conversion option, then the Exhibit 9 is effectively deleted.
10-Day Contract — A 10-Day Contract is one that has a term equal to 10 days or 3 games, whichever is longer. These contracts can only be signed on or after January 5 of any season, and cannot extend past the end of the regular season. The player’s salary in a 10-day Contract is pro-rated and cannot be less than his applicable minimum player salary. Terminating these contracts does not require following the waiver procedure. A team can only enter into a 10-Day Contract with the same player twice in any season. More importantly, a team can only sign a limited number of 10-day contracts, depending on the size and makeup of the team’s active and inactive lists.
Rest-of-Season Contract — A Rest-of-Season Contract is one that is entered into at any time after the first day of the regular season and only provides compensation for the remainder of the season. The player’s salary is pro-rated and cannot be less than his applicable minimum player salary.
Over 38 Contract — An Over 38 Contract is any contract that covers 4 or more seasons where the player is 38 years old or will turn 38 years old during the contract’s term. These contracts are relevant in that they have unique salary cap implications. Essentially, salary for the last year of a 4 or 5-year contract with a player that is 35 or older is re-allocated over prior seasons. Salary in this final year is basically treated like deferred compensation and attributable to prior salary cap years. So why does the CBA do this? As RealGM explains here, the Over 38 Contract rules are designed to prevent teams from pushing an older player’s salary into the final years of his contract (i.e., later salary cap years) in order to fit that player under the team’s then-current salary cap room.