There is a difference between being a basketball player and being an NBA basketball player, and it basically comes down to the fact that playing in the NBA is a job. And as it is with all other jobs, playing in the NBA means that you need to sign a contract. Do not get distracted by the big flashy salary numbers that NBA players get, and know that there is a lot that they have to live up to if they want to take that kind of money home.
What is the standard NBA contract? A standard NBA contract, also known as a Uniform Player Contract, consists of the agreed, non-negotiable terms and agreements set forth by the current collective bargaining agreement (CBA) between the NBA and the NBA Players Association. Various “exhibits” can be added to the contract as per the team’s and/or player’s request, while some exhibits are mandatorily included in contracts. A standard NBA contract cannot be longer than 4 years.
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What is a rookie contract?
A rookie contract is the first contract that an NBA player signs when they enter the league. There was a time in the NBA when rookies could sign contracts of any salary amount and length, which led to monster contracts such as Glenn Robininson’s 10-year, $68 million contract as the 1st overall pick in the 1994 NBA Draft, the biggest rookie contract ever. The very next season, the NBA implemented a rookie scale, which basically means that for first round picks, the amount of salary you earn is directly correlated to where the player was picked in the draft (top picks get more money, while picks at the end of the round get less money). The rookie scale is not applicable to second-round draft picks, who can sign for any amount they are offered.
The rookie contract is 4 years long, but with certain caveats. After 2 years, the team has an option to extend the rookie’s contract for a 3rd year (known as a team option). After the 3rd year, there is another team option to extend the contract for a 4th year. After completing 4 years, the rookie becomes a restricted free agent (their current team has the right to match any offer received during free agency, of which then the rookie has to stay with his current team if offer is matched, or can sign a contract with any other team if the team declines to match the offer).
What is a maximum contract?
A maximum contract is a contract (or an extension) that allows for players to earn the maximum salary, which is dependent on the player’s experience and certain other performance bonuses (ex: winning the MVP award). Players with 0-6 years of experience in the NBA are able to sign max contracts worth 25% of the salary cap, players with 7-9 years of experience can sign contracts worth 30% of the salary cap, and players with more than 10 years of experience can sign contracts worth 35%.
What are the exhibits in an NBA contract?
Exhibits are like clauses that can be negotiated into a contract on top of the non-negotiable, standard terms of a uniform player contract. There are 10 main exhibits that can be added to a contract, but its important to note there are are further details and types of clauses within these exhibits that can also be included or replaced.
Exhibit 1 highlights the player’s contract length, options, salary, and bonuses, and is mandatory to be included in a contract. Exhibit 2 is another mandatory exhibit that lists the compensation protection for a player should he be subject to injury, illness, or even death. Exhibit 3 is a provision that protects teams if a player has a prior injury that if it is re-injured/aggravated, teams do not have to pay guaranteed salary. Exhibit 4 is for the “trade kicker”, which is basically a bonus for a player if they are traded. Exhibit 5 is known as the “Love of the Game”, which allows players to participate in non-NBA basketball activities.
Exhibit 6 is another exhibit that is almost always included, and that refers to a physical exam administered right when a player signs a contract, and offers teams protection if players do not pass the physical exam. Exhibit 7 is an interesting language replacement for a clause in the uniform player contract (which cannot be altered or removed), that gives players an opportunity to challenge the clause in question (a player’s conditioning level) by administering an individual physician to decide the ruling. Exhibit 8 refers to sign-and-trades, which is a particular type of trade that allows players to sign a contract with their current team in free agency then get immediately traded to another team (this allows the player to get maximum salary and the team to receive compensation for a player leaving in free agency).
Exhibits 9 and 10 are clauses that hardcore NBA fans may be familiar with, as they are often associated with a specific type of contract. Exhibit 9 refers to non-guaranteed, one season training camp contracts for players during the preseason. Exhibit 10 contracts, which are usually paired with Exhibit 9 contracts, refers to a team’s flexibility in converting a player’s contract into a two-way contract (so that they can play for both the team and the team’s G League affiliate).
What happens when an NBA contract expires?
Contracts have a fixed length, but quite often teams and players (and the player’s agents) start working on a contract extension before the initial contract expires. If an extension isn’t offered before contract expiry, a player becomes a free agent, either a restricted free agent or unrestricted free agent (the difference is that unrestricted free agents can sign with whoever).
Contracts are long and complex pieces of paper, but they hold up the NBA together. Without a standard player contract, the NBA, the teams, and the players would all have different standards and different requirements that would make things a huge mess for everyone involved.