2011 Nba Cba By Nate Duncan--Article Vii

Front 1

Definitions: Basketball Related Income (BRI)

VII(1)(a)

Back 1

The aggregate operating revenues of the NBA, NBA-controlled entities, and all NBA teams.

Note: This is a very broad overview. There are about 10 pages of nuance to what BRI is.

Front 2

Definitions: Projected BRI

VII(1)(c)

Back 2

1. NBAPA and NBA try to agree on Projected BRI prior to the end of the moratorium period.
2. If they can't agree, Projected BRI is the sum of:
-For all income that isn't national broadcast rights (i.e. ticket sales, local broadcast, sponsors, etc), Projected BRI is 104.5% of previous year's BRI from those sources.
-For national TV contracts, the amount of the contract that corresponds to that Salary Cap Year.
-Revenue sharing payments for that Salary Cap Year (See VII(1)(a)(8)
--Value of air time provided to NBA by broadcast partners used to promote the WNBA or any other purpose not listed in VII(1)(a)(1)(ii)(A-D)
-Contingent payments for that Salary Cap Year

Front 3

Definitions: Local Expansion Team BRI

VII(1)(d)

Back 3

BRI of an Expansion Team in it's first and second seasons not attributable to league-wide sources. E.g., ticket revenue is part of it, national broadcast contract isn't.

Front 4

Definitions: Projected Local Expansion Team BRI

VII(1)(e)

Back 4

104.5% of Local Expansion Team BRI for the preceding season.

Front 5

Definitions: Interim Projected BRI

VII(1)(f)

Back 5

A projection of BRI for a salary cap year using Estimated BRI for the previous year because BRI isn't available yet.

Front 6

"Estimated" Total Salaries/Total Benefits/BRI

VII(1)(h-k)

Back 6

All calculated using the Interim Audit Report.

Note: See Section 10, Interim Audit Report is provided by the Accountants if the Final Audit Report isn't available yet at the end of the Moratorium Period

Front 7

Calculation of Salary Cap

VII(2)(a)(1)

Back 7

44.74% of Projected BRI for the upcoming Salary Cap Year, less Projected Benefits, divided by # of teams (except expansion teams in their first 2 years).

Note: During expansion team's second year, if including the Expansion team into the calculation would increase the Salary Cap, then that becomes the Salary Cap.

Front 8

What happens if the final audit report isn't ready at the end of the moratorium period and players/NBA don't agree on the next year's cap?

VII(2)(a)(4)

Back 8

Projected BRI/benefits/etc are used to calculate the cap.

Front 9

Minimum Team Salary

VII(2)(b)(1)

Back 9

90% of the Salary Cap. $52.81 million for 2013-14, as calculated as of the team's last regular season game.

Note: Players who don't count against the cap because they are long-term injured or amnestied do count against the salary floor.

Front 10

Salary Cap for 2014-15

Back 10

$70 million

Front 11

What happens when team does not meet the minimum salary?

VII(2)(b)(2)

Back 11

The NBA forces the team to make payments equal to the shortfall to the players on that team, to be disbursed pro rata or by some other formula reasonably determined by the NBAPA.

NBAPA provides the league with the proposed disbursement 30 days after the Final Audit Report is complete, The team has to make the payment within 10 business days after receiving the proposed distribution.

Front 12

Expansion Team Salary Caps and Minimum Team Salaries

VII(2)(c)

Back 12

1st Year: 66.2/3 % of the regular salary cap, minimum salary 90% of that.
2nd Year: 80% of regular salary cap, minimum salary 90% of that.

Front 13

Designated Share

VII(12)(b)(3)

Back 13

Amount of BRI that the players get. Default is that it's 50% of BRI, but has to fall within 49-51% of BRI. Whether it's higher or lower than 50% depends depends on whether BRI exceeds (higher) or is less than (lower) projected BRI.

Front 14

Designated Share: If actual BRI exceeds Projected BRI

VII(12)(b)(3)

Back 14

Designated Share = 50% of forecast BRI plus 60.5% of (actual BRI minus Projected BRI). But designated share cannot exceed 51% of actual BRI, no matter how much higher actual BRI is than projected BRI.

Front 15

Designated Share: If actual BRI is lower than Projected BRI

VII(12)(b)(3)

Back 15

Designated Share = 50% of forecast BRI minus 60.5% of (Projected BRI minus actual BRI). But designated share cannot be lower than 49% of actual BRI, no matter how much lower BRI is than Projected BRI.

Front 16

What happens to Salary Cap if Total Salaries and Benefits are less than the Designated Share?

VII(2)(d)(1)

Back 16

Salary Cap for the next year is increased by the amount of the shortfall divided by the number of Teams in the NBA during the next year.

Note: Number of teams does not include Expansion Teams in first 2 years.

Front 17

Overage

VII(12)(a)(14)

Back 17

The amount that Total Salaries and Benefits exceeds the Designated Share, if applicable.

Front 18

What happens to the next season's Salary Cap if there is an Overage the previous year?

VII(2)(d)(2)

Back 18

1. If Overage is 6% or less or Total Salaries and Benefits, nothing changes.
2. If Overage is over 6%, then the cap is reduced. (See next card.)

Front 19

Formula for Reduction of Salary Cap in event of an Overage exceeding 6%

VII(2)(d)(2)(ii)

Back 19

1. If Projected BRI for the next year is not more than 8% higher than actual BRI the previous year, OR if the Overage is more than 9%, then salary cap determined as follows:

Subtract six percent (6%) of Total Salaries and
Benefits from the Overage, then divide by number of teams in the NBA. The Salary Cap for the next year is then reduced by that amount.

2. If Projected BRI exceeds previous year's BRI by more than 8% AND the Overage is not higher than 9% of Total Salaries and Benefits, then use following formula:

(Overage - 6% of Total Salaries and Benefits) - ((Projected BRI - Previous BRI) - (8% of Previous BRI)) x 44.74%. If result is < 0, no adjustment to cap. If result is > 0, then divide by # of NBA teams. Cap is reduced by this amount.

Purpose is to even out the Overage the next year by reducing the Cap.

Front 20

If an Interim Audit report must be used to calculate the cap, effect on the Salary Cap of a difference between Interim and Final Audit report

Back 20

If the next year's salary cap is based on an Interim Audit Report, and the Audit report changes BRI and Total Salaries and Benefits so that the Salary Cap would have been changed, then the amount of the change is debited or credited from the Cap for the subsequent year.

Note: If it's the last year of the CBA, then the difference is applied to the then-current Salary Cap Year with interest from the date of the Interim Audit Report

Front 21

Timing and method of payment if Total Salaries and Benefits are less than the Designated Share.

VII(2)(e)

Back 21

Difference is paid to players within 30 days following the completion of the Audit Report.

Payment gets distributed to all players who were on an NBA roster during the year, on a proportional basis determined by the NBAPA.

NBAPA has to provide the league with its proposed distribution within 30 days after the completion of the Audit Report

Front 22

Determination of Salary: Deferred Compensation General Rule

VII(3)(a)

Back 22

Contracts with deferred compensation must specify the Season(s) in which it is earned. That compensation is included in the player's Salary for that Cap Year.

Front 23

Over 36 Contract

VII(3)(a)(2)

Back 23

Generally applies to contracts 4 or more years, one of which encompasses a season which starts after the player turns 36.

For purposes of this rule, the season is considered to start October 1, so the question is whether the player turns 36 before October 1 of that season.

Note: See exceptions.

Front 24

Zero Year

VII(3)(a)(2)(vi)

Back 24

Under the Over 36 rule, a year of salary that is either the 4th or 5th year of a contract to be paid after the player turns 36. This salary is treated as deferred salary, and therefore accelerated onto the years of the contract before the player turns 36.

Only seasons 4 and 5 of a contract that take place when a player is 36 or older can be Zero Years.

Front 25

Purpose of Over 36 Rule

VII(3)(a)(2)

Back 25

To prevent older players from signing at a lower salary for more years, then collecting salary after they have retired and effectively inflating their salary while they're actually playing. More of an issue under the old CBAs where there were longer contracts.

By accelerating the years 4 and 5 salary onto the first 3 years, the league effectively prevents those players from earning any more money than they could have under a 3 year contract, so there is no reason to do a contract longer than 3 years.

Front 26

Exceptions to Over 36 Rule

VII(3)(a)(2)(ii, iv)

Back 26

Note: With Qualifying Veteran Free Agents, exceptions only apply if they re-sign with their old team.

Chart via Larry Coon, CBAFAQ.com

Exception 1: If a Qualifying Veteran Free Agent is re-signed by his prior team to 4 year deal and is 33 or 34, Over 36 rule doesn't apply.

Exception 2: 33 or 34 year old Qualifying Veteran Free Agents who sign 5 year deals with Prior Team. Only the 5th year is a zero year--according to general language of the rule the 4th and 5th years would be.

Front 27

Allocation of Zero Years' Salary to each of first 3 years of contract under over 36 rule

VII(3)(a)(2)(I)

Back 27

Zero years are allocated pro rata to each of first 3 years based on salary for those years.

Example: player signs 4 year, 21 million contract. Salaries starting in year 1 are $4.5, $5.0, $5.5, $6 million. The 6 million gets allocated over the first 4 years in proportion to the salaries for those years.

So, $4.5 million is 30% of the salary for first 3 years, so 30% of the $6 million year 4 salary is allocated to year 1, i.e. $1.8 million. $2 million allocated to year 2, $2.2 million allocated to year 3.

Front 28

What is player's Salary attributable to each year as the Over 36 contract continues?

VII(3)(a)(2)(iii)

Back 28

After the first year of an Over-36 contract, the player's Salary for thta year is determined by taking the next 3 years of the contract and averaging them.

Note: Assuming player has not been waived.

This basically has the effect as they go along of shifting salary back onto the Zero Year(s), so the player's cap hit goes down each year.

Example: Player signs 4/$24 million Over 36 contract paying $6 million each year. Original cap hit for first 3 years is $8 million per year ($6 million for last year shifted onto first 3 years). But after first year, you take the average of the next 3 years as the cap hit. So the remaining salary to be paid $18 million, spread over 3 years is $6 million. So cap hit goes down after first year.

Front 29

Special exceptions for calculating a player's age:

VII(3)(a)(2)(ii, vii)

Back 29

1. MORATORIUM BIRTHDAY: If player's birthday is during the Moratorium period, and he signs a contract by the fifth day after the Moratorium period, then he's treated as if his birthday hasn't happened yet. E.g. player turns 34 during the Moratorium period and signs a 5 year deal immediately after, he's still treated as if he's 33.

2. Qualifying Veteran Free Agent 32 YEAR OLDS who enter into an Over 36 Contract prior to October 1, but who turn 33 before October 1 ("start of season under Over 36 Rule") are considered to be 33 at the time he enters into the contract. NOTE: I don't think this makes a difference anymore b/c rules for 32 and 33 year old Qualifying Veteran Free Agents are the same with shorter contracts under new CBA.

Front 30

Effect of new CBA contract length on Over 36 rule

VII(3)(a)(2

Back 30

Doesn't matter as much now because the only way there can be more than 1 Zero Year on a contract is if a 35 y/o Qualifying Veteran Free Agent signs a 5 year deal w/ his new team.

Front 31

What constitutes a signing bonus?

VII(3)(b)(1)

Back 31

1. Regular signing bonus, earned upon signing of the contract.
2. Trade kicker bonus.
3. Payments in excess of the Excluded International Player Payment (buyouts to international teams)

Front 32

How do signing bonuses count against the cap?

VII(3)(b)(2)

Back 32

General rule: Signing bonuses are spread over the guaranteed years of the contract in proportion to the guaranteed base compensation earned in those years.

Other rules:
1. If contract contains an ETO, bonus is only spread over years before the ETO.
2. If contract is totally nonguaranteed, or not guaranteed beyond that year, then the signing bonus is allocated to the year in which it is earned. (Note: This would be the year player is traded in the case of a trade bonus.)

Note: If a year is only partially guaranteed, then only the guaranteed amount counts for allocation purposes. E.g., 2 year $2 million contract, $1 million guaranteed first year and $250k guaranteed second year. 80% of signing bonus allocated to year 1.

Front 33

Exception to proration rule: Signing bonuses for extensions by teams under the cap

VII(3)(b)(3)

Back 33

Teams under the cap may pay signing bonuses on extension prior to the first day of the first year covered by the extension. How this gets allocated depends on whether the current contract and extension are guaranteed or not.

Note: Such an extension counts as a Renegotiation, and is subject to such rules. See VII(7).

Front 34

Signing bonuses for extensions by under the cap team: Allocation If current contract and extension are both nonguaranteed

VII(3)(b)(ii)(A)

Back 34

All of the signing bonus from the extension is allocated to the current salary cap year (the one before the extension even kicks in)

Front 35

Signing bonuses for extensions by under the cap team: Allocation If either current contract or extension are guaranteed.

VII(3)(b)(ii)(A)

Back 35

Allocated in the normal fashion, proportionate to the base compensation over the guaranteed years.

Front 36

Payment of signing bonuses on extensions for teams that are over the cap

VII(3)(b)(ii)(A)

Back 36

Bonus can't be paid any sooner than the first day of the first Cap Year covered by the extension. Bonus is allocated in proportion to the base compensation over the guaranteed years of the contract.

Front 37

Cap charge for interest on a loan to a player

VII(3)(c)(1)

Back 37

If the loan has a lower interest rate than the Target Rate, then the difference between the loan interest rate and the Target Rate is imputed on the remaining balance of the loan and added to the player's cap charge.

Front 38

Definition of Target Rate

VII(3)(c)(1)

Back 38

Prime rate +1%. Prime rate is that reported in WSJ "Money Rates" column.

Exception: Target rate must be between 7% and 9%.

Front 39

Maximum amount of loan made to a player per year

VII(3)(c)(2)

Back 39

No loan (along with any other outstanding loans) can exceed the amount of the player's guaranteed Salary for that Salary Cap year.

E.g., if a player's salary is $1 million per year guaranteed, the loan amount cannot exceed $1 million, even if he has more guaranteed money remaining on his contract.

Front 40

What is the method for repaying loans to players?

VII(3)(c)(2)

Back 40

Must be repaid from future guaranteed salary in equal annual amounts.

Note: Does not include salary due after an ETO.

Example: Player has a 5 year/$5 million contract all guaranteed. He gets his max loan of $1 million before the first season. $200,000 per year is then taken out of his pay for each year of his contract to repay the loan.

If he has an ETO after the 4th year, or the 5th year is nonguaranteed, then $250,000 per year has to be taken out to repay the loan.

Front 41

Reduction in maximum loan amount if part of guaranteed salary already paid that season

VII(3)(c)(2)

Back 41

If the amount of a player's remaining guaranteed salary for that season is less than the Annual Allocable Repayment Amount (i.e., amount to be taken out of player's salary per season as repayment), then the Maximum loan amount is reduced by the difference.

Example: Player has 5 year/$5 million fully guaranteed contract. Gets a loan in year one with only $100k guaranteed left to be paid that year. Normally maximum loan is $1 million b/c that's how much he makes that year. But, because the $100k remaining is less than the annual allocable amount of $200k ($1 million/5 years on contract), then the $100k difference between the two is subtracted from the max loan amount. So max loan amount is $900k.

Front 42

Annual allocable repayment amount

VII(3)(c)(2)

Back 42

The amount of a player loan to be repaid each year out of his future salary. Calculated by taking loan amount divided by number of years with guaranteed money remaining.

So 5 year, $5 million contract. Max loan is $1 million, annual allocable repayment amount is $200k per year.

Front 43

Maximum annual allocable repayment amount.

VII(3)(c)(2)

Back 43

The annual allocable repayment amount on the maximum possible loan the player could get (which is determined by his guaranteed salary in a given year.)

Front 44

Loans made to minimum salaried players.

VII(3)(c)(3)

Back 44

Are not allowed.

Front 45

Forgiveness of loans to players

VII(3)(c)(4)

Back 45

This is deemed a Renegotiation for the cap year in which it occurs, subjecting it to the rules governing Renegotiations in VII(7)

Front 46

General rule of whether incentives (aka Performance Bonuses) are included in a player's salary cap charge

VII(4)(d)(1)

Back 46

They are included if the player or team's performance the preceding year would have triggered them.

Front 47

If NBAPA or the team believes the performance the year before doesn't accurately predict the likelihood of earning a performance bonus

VII(4)(d)(1)

Back 47

Either can request that a jointly selected basketball expert determine whether it is very likely the bonus wlil be earned.

Note: NBA will want to say bonus is likely, because a bonus included in Salary but not actually earned reduces the amount they have to pay out. NBAPA has the opposite incentive. It wants a player's cap charge to be lowered so other players can get that money.

Front 48

Procedure for Expert determining whether bonus is very likely to be earned

VII(4)(d)(12)

Back 48

1. Expert conducts a hearing within 5 business days, and renders a determination within 5 business days after that.
2. Party initiating the proceeding has the burden of proof.
3. To uphold challenge, Expert must find that player is very unlikely to earn bonus (NBAPA challenge) or very likely to earn bonus (NBA challenge).
4. No party can mention whether the bonus would or wouldn't be included under the default rule.
5. Expert's opinion is unappealable.
6. Costs of Expert borne equally by the parties.

Front 49

Procedure when default likely/unlikely status can't be calculated b/c player is a rookie, didn't play last year, or is acquired by an Expansion Team

VII(4)(d)(3)

Back 49

NBAPA and NBA try to agree on whether bonus is likely to be earned. If there is no agreement, an Expert conducts a hearing on whether bonus is likely or unlikely to be earned.

Note the difference in standard of proof from the normal challenge where the player did play last year. Expert determines whether bonus is likely or unlikely to be earned, not VERY likely or unlikely to be earned. And there's no burden of proof because no side is bringing the challenge.

Note: For player acquired by Expansion Team, this procedure only applies to incentives based on team performance.

Note: Team-based performance incentives is a very good reason players don't want to be traded to a bad team.

Front 50

How is team salary affected while the Expert hearing procedure is occurring?

VII(4)(d)(4)

Back 50

Full amount of any disputed bonuses are included in team salary until Expert makes a decision.

Front 51

Procedure if the NBAPA and the NBA can't agree on an Expert?

VII(4)(d)(5)

Back 51

Challenge may be filed with the Grievance Arbitrator. (See Article XXXI Sections 2 through 7 and 15)

Front 52

Inclusion of incentives based on physical condition, academic achievement, or extra promotional appearances in Team Salary

VII(4)(d)(6)

Back 52

All are automatically included in Salary

Front 53

Definition of Excluded International Player Payment Amounts

VII(4)(e)(1-2)

Back 53

Amount that NBA teams can pay as a buyout to international teams that doesn't count against the salary cap. $575,000 for 2013-14 year and goes up $25k each year.

Front 54

How do buyouts in excess of the Excluded International Player Payment Amounts count against the cap?

VII(4)(e)(1)

Back 54

They count as Salary (in the form of a signing bonus) to the player.

Front 55

Timing of Excluded International Player Payment Amount payments

VII(4)(e)(3)

Back 55

1. Can be paid in single or multiple installments.
2. Can be used whenever a team signs a new player, except it can't be used more than once every 3 years on the same player.
3. The Excluded International Player Payment Amount is deemed used as of the date the Team enters into a contract with the relevant player, regardless of when the payment(s) to the international team takes place.

Note: Excluded International Player Payments don't count towards minimum team salary.

Note: NBA has to provide NBAPA with written notice of EIPP within 2 days of receiving notice itself.

Front 56

How much do minimum salary contracts count against the cap?

VII(4)(f)

Back 56

Cap charge for minimum salary is lesser of 1) minimum salary or 2) portion of minimum salary that is not reimbursed out of the league-wide benefits fund. (See IV(6)(k)(2))

Note: This is why teams want to do one-year minimum salary contracts rather than extending it past one year, so they can reduce the salary cap charge if part of the minimum contract is paid through the fund.

Front 57

Calculation of Salary for Restricted Free Agents with 1-2 years of service who sign an offer sheet including maximum amount (MLE) in years 1 and 2 of offer sheet.

VII(4)(h)

Back 57

Their salary is deemed to be the average of the contract over all the years of the deal if the offer sheet is not matched.

So, 3 year max offer sheet to 1-2 year restricted free agent is MLE for first 2 years, then maximum salary the third (and potentially fourth) years. If Prior Team doesn't match, cap hit is average of all the years of the contract. If Prior Team does match, cap hit is equal to amounts actually paid each year, i.e. it goes up to the max after 2 years.

Note: This is the Omer Asik/Jeremy Lin situation from summer 2012.

Front 58

Calculation of Salary for contracts that predate 2011 CBA

VII(4)(i)

Back 58

It is still calculated under the rules in effect at the time it is signed.

Front 59

Computation of Team Salary: waived players

VII(4)(a)(1)(i)

Back 59

Salaries paid or to be paid to waived players count as team salary, unless the stretch provision is used. See VII(7)(d)(5) for calculation of team salary with respect to stretch provision.

Front 60

Computation of Team Salary: Retired Players

VII(4)(a)(1)(iI)

Back 60

Amounts paid or to be paid to a retired player under their contract count as part of team salary. The aggregate amount paid to retired players is allocated pro rata over the remaining years of the contract in proportion to the guaranteed salary remaining on the contract for each of those years.

Front 61

Computation of Team Salary: Grievances for present/future cap year salary--If Grievance is resolved prior to expiration of relevant Salary Cap Year

VII(4)(a)(1)(iii)(A)(1)

Back 61

If a player initiates a Grievance over compensation that the team says is not owed, 50% of the disputed amount is included in Team Salary for the Salary Cap Year the amount was supposed to be paid.

Once the Greivance is resolved, if the award is more than the 50% of the amount sought, it is that additional amount is added to the relevant Salary Cap Year. If it's below the 50% amount, then there's a subtraction in team salary.

Front 62

Computation of Team Salary: Grievances for present/future cap year salary--If Grievance is resolved after expiration of relevant Salary Cap Year

VII(4)(a)(1)(iii)(A)(2)

Back 62

The difference between the awarded Grievance amount and the 50% of the sought amount is added or subtracted to Team Salary for the year in which the Grievance is resolved.

Front 63

Computation of Team Salary: Grievances for present/future cap year salary--Effect on luxury tax payment if Grievance is resolved prior to expiration of relevant Salary Cap Year

VII(4)(a)(1)(iii)(A)(2)

Back 63

If, by splitting the disputed Grievance amount over 2 years, the team ends up paying less luxury tax than it would have had to if the Grievance amount were all paid in the year it was originally scheduled, then it owes additional tax. Vice-versa if the team ended up having to pay more as a result of the Grievance.


Note: This is an issue if the team is over the luxury tax in the original season but not in the season the Grievance is settled, or vice-versa.

Front 64

Computation of Team Salary: Grievances for present/future cap year salary--League mechanism for luxury tax payment/refund if Grievance is resolved prior to expiration of relevant Salary Cap Year

VII(4)(a)(1)(iii)(A)(2)

Back 64

NBA sets aside the amount of luxury tax paid by the team that is attributable to the 50% allocation in that Salary Cap Year.

After the Grievance is resolved, the NBA pays any applicable refund if the Grievance is settled for less than the 50% amount.

Front 65

Computation of Team Salary: Grievances for prior cap year salary

VII(4)(a)(1)(iii)(B)

Back 65

If the player wins, the Grievance amount is added to the present Salary Cap Year (in which the Grievance was resolved).

Note: Luxury tax rules work the same as for Grievances for compensation in present or future cap years. If team has to pay more or less as a result of having it count in the year Grievance is resolved, then it owes/is refunded the relevant amount.

Note: League procedure for facilitating payment of potential tax refund is the same as when Grievance is for current or future cap year (see card above)

Front 66

Computation of Team Salary: Grievances for multiple cap year salary

VII(4)(a)(1)(iii)(C)

Back 66

The aggregate amounts payable to the player are allocated to each relevant season in proportion to the amount that was in dispute for each season.

Exception: The Grievance Arbitrator makes his own allocation.

Front 67

Rules to avoid game-playing with Grievances to increase cap room or reduce luxury tax payments.

VII(4)(a)(1)(iii)(D)

Back 67

1. Team must notify NBA by fax or email immediately when oral or written agreement to resolve Grievance is reached. Failure to do so can be considered cap circumvention under Article XIII.
2. If a team tries to create a Grievance or delay its resolution to create more cap room or reduce tax payments, it WILL be considered cap circumvention.

Front 68

Calculation of Team Salary: Effect of oral or written agreement to sign a contract that has yet to be formally reduced to a Uniform Player Contract

VII(4)(a)(1)(iv)

Back 68

It becomes part of Team Salary immediately.

Note: This also includes contracts that are contingent upon passing a physical.

Note: Does not apply if the player is re-signing with his old team, hasn't been renounced and the new contract is less than his cap hold (aka free agent amount). Then they have to wait until UPC is formally in effect for new salary to replace the cap hold in Team Salary.

Front 69

Calculation of Team Salary: Cap Hold for Unrestricted Veteran Free Agents

VII(4)(a)(2)(i)

Back 69

For Unrestricted Veteran Free Agents who last played for a team, cap hold is included in Team Salary until he is renounced, signs with another team, or is re-signed formally to a new UPC.

Front 70

Calculation of Team Salary: Salary Cap amount for Restricted Free agents

VII(4)(a)(2)(ii)

Back 70

Greater of:
A. His normal cap hold
B. Qualifying offer (if tendered)
C. Salary in a First Refusal Exercise Notice (i.e., matching of an offer sheet by another team to the RFA)

Front 71

Calculation of Team Salary: Offer Sheets to RFAs

VII(4)(a)(3)

Back 71

Are included in Team Salary until matched. See XI(5)(b)

Front 72

Calculation of Team Salary: Unsigned First Round Picks

VII(4)(a)(4)

Back 72

Unsigned First Rounders are generally included in Team Salary at 100% of the Rookie Scale amount. See VII(4)(f)

Exceptions: If player signs with a non-NBA team, then that amount isn't included as of either the first day of the Regular Season or the day he signs with the non-NBA team, whichever is later. He then comes back on the following July 1 or whenever his contract ends or he's released from it, whichever is earlier.

Exception to Exception: If player and team both state in writing player won't sign with team that year, then he's off the books immediately. He automatically comes back on the next July 1 at 100% of that season's rookie scale amount.

Front 73

Calculation of Team Salary: Cap Holds for having fewer than 12 players

VII(4)(a)(5)

Back 73

If team has less than 12 players under contract between July 1 and start of the season, there is a cap hold for the rookie minimum included for that roster slot. See VII(4)(f)

Front 74

Calculation of Team Salary: Consideration to Retired Players

VII(4)(a)(6)

Back 74

If a retired player is given some consideration that qualifies as cap circumvention, that amount is included in Team Salary. (See Article XIII(5))

Front 75

Calculation of Team Salary: Inclusion of Salary Cap Exceptions

VII(4)(a)(7)

Back 75

Any Exception deemed included in Team Salary under VII(6)9m)(2) counts against the cap.

If a team is below the cap by less than the amount of the exception, the amount of the exception is included in Team Salary until used or renounced by the team.

Front 76

Inclusion of waived players selected in an expansion draft in Team Salary

VII(4)(b)

Back 76

Salary of waived player isn't included in Team Salary, except for purposes of calculating the Minimum Team Salary obligation.

Front 77

Inclusion of players received in trade in Team Salary

VII(4)(c)

Back 77

That year's salary and all future salary is included in Team Salary upon receiving the player in trade.

Front 78

When does a cap hold apply to a Veteran Free Agent?

VII(4)(d)

Back 78

Until he re-signs with the team, signs with another team, or is renounced.

Front 79

Amount of cap hold for Bird rights free agent: General Rule for FAs not coming off first or 2nd option year of rookie contracts.

VII(4)(d)(1)(i)

Back 79

If player's salary is equal to or greater than Estimated Average Player Salary, then cap hold is 150% of prior salary.

If player's salary is less than Estimated Average Player Salary, then cap hold is 190% of prior salary.

Note: Estimated Average Player Salary is 104.5% of previous year's Average Player Salary

Front 80

Cap holds for players coming off first or second option year of rookie contracts

VII(4)(d)(1)(ii-iii)

Back 80

After 2nd option year: 200% of prior salary if equal to or higher than EAPS, 250% of prior salary if less than EAPS.

After 1st option year: The maximum Salary team can pay the player, which is the amount he could have made under his rookie contract if his second year option were picked up.

Note: The only way a rookie scale player can be FA after first option year is if second option year isn't picked up. So his salary (with that team) is limited to what it would have been under the rookie contract had it been picked up. This prevents teams from letting players out of rookie contracts early to pay them more sooner.

Front 81

Cap Holds for Early Bird Rights Free Agents

VII(4)(d)(2)

Back 81

1. General Rule: Included at 130% of his prior salary.
2. Exception: If he's coming off the second season of his rookie scale contract, then he's included at amount equal to what he'd have made in 3rd year of rookie contract had option been picked up.
3. Exception to exception: Team renounces his rights, in which case cap hold is same as non-Bird free agent (120% of prior salary)

Front 82

Cap Holds for Non-Bird Free Agents

VII(4)(d)(3-4)

Back 82

120% of prior salary.

Exception: If player is coming off a minimum contract, then his cap hold is only the amount of the minimum salary for the upcoming season that would not be paid by the League.

Front 83

Maximum and Minimum Cap Holds

VII(4)(d)(5)

Back 83

Maximum cap hold cannot exceed the player's maximum possible salary for the upcoming year.

Minimum cap hold cannot be less than the minimum salary less what is paid by the League.

Front 84

What constitutes "prior Salary" for the purposes of calculating Cap holds?

VII(4)(d)(6)

Back 84

Regular Salary for prior Season plus any signing bonus allocation and actually earned incentives for that Season.

Front 85

When do unsigned first round picks have cap holds?

VII(4)(e)

Back 85

1. General Rule: Included in Team Salary immediately upon being selected at 100% of Rookie Scale Amount
2. Under general rule, player continues to be included at that Rookie Scale Amount until he signs with team or is renounced. Each year he remains unsigned his cap hold is the Rookie Scale Amount for that cap year.
3. Exception: If he signs with non-NBA team for that year, then as of date of signing or start or regular season, whichever is later, cap hold is extinguished for that year and comes back on the later of the following July 1 or whenever his non-NBA contract expires.
4. Player and team agree in writing he won't play for team that year, then cap hold is extinguished at that point until the later of next July 1 or whenever his non-NBA contract expires. Player can't play for team that year if this is done.

Note: Player with a non-NBA contract for that year can enter a Rookie Scale Contract with the team for the NEXT salary cap year after February 1. VII(5)(e)(4)(ii).

Front 86

Rules for cap holds for incomplete rosters

VII(4)(f)

Back 86

1. If a team has less than 12 players under contract between July 1 and start of Regular Season, then there is a cap hold of the rookie minimum salary for each unused slot.
2. The only players who count as being on the roster for purposes of this rule are i) players under contract; ii) free agents who still have cap holds; iii) players to whom offer sheets have been given; iv) unsigned first rounders.

Front 87

Procedure for Renouncing Free Agent

VII(4)(g)(1)

Back 87

1. Team must provide NBA with a written statement renouncing the player, effective no earlier than July 1 following last season covered by player's contract.
2. NBA must notify NBAPA of renunciation by fax or email within 2 business days.

Front 88

Effect of renouncing free agent

VII(4)(g)(1)

Back 88

Player loses his Bird rights, and team must use cap room or an exception to re-sign him.

Front 89

"Unrenouncing" player after RFA offer sheet is matched.

VII(4)(g)(1)

Back 89

Team may "unrenounce" the player within 2 business days of the Offer Sheet being matched, at which point he gets his Bird rights back and his cap hold returns.

But, the team can't do this if:
i) the team was at or below the cap before the renouncement and unrenouncing would cause it to exceed the cap or;
ii) the team was over the cap before the renouncement and unrenouncing would cause the team to be further over the cap than it was originally.

So basically, the team can't unrenounce if it has signed other players to anything more than the rookie minimum unless it still has cap room after the unrenouncing.

Front 90

Exclusion of long-term injured player from Team Salary

VII(4)(h)

Back 90

A player who suffers a career-ending injury or illness and who is waived by the team can be excluded from Team Salary

Front 91

At what point may team apply to have long-term injured player excluded from Team Salary?

VII(4)(h)(1)

Back 91

1. If the player played in more than 10 games in his last season, one year after the player last played in a regular season or playoff game.
2. If the player played in less than 10 games in his last season, then the later of 60 days after he last played or 1 year after the last game he played the previous season.

Note: Only regular season or playoff games count.

Front 92

How is it determined whether a player has a career-ending injury or illness?


VII(4)(h)(2)

Back 92

A physician selected jointly by NBA and NBAPA determines whether player's injury or illness either:
i) prevents him from playing at an NBA level for the rest of his career or;
ii) substantially impairs his ability to play AND would subject the player to medically unacceptable risk or life-threatening or permanently disabling injury or illness.

Front 93

When long-term injured player's salary can be re-included in team salary.


VII(4)(h)(3)

Back 93

If player plays 25 regular season or playoff games in any season for any team, his salary for that season is then re-included on the books of his original team. The original team can then reapply to have him excluded for any remaining cap years under the same criteria as normal, including the waiting period.

Front 94

Player cooperation in long-term injury exclusion process


VII(4)(h)(4)

Back 94

He has to cooperate, including by showing up for the physical and being truthful in connection with the application.

Front 95

What team can apply for long-term injury exclusion?


VII(4)(h)(5)

Back 95

Only the team for which he was under contract at the time the injury became known or reasonably should have been known.

Front 96

Limitations for the team once it applies for long-term injury exclusion


VII(4)(h)(6)

Back 96

i) If the exclusion is granted, the team can NEVER re-sign or re-acquire that player.
ii) If team applies to replace this player under the Disabled Player Exception during that Salary Cap Year, it can't apply for a long-term injury exclusion for the player that same year.

Front 97

What is a summer contract?


VII(4)(i)

Back 97

Summer Contracts are contracts that are not included in Team Salary until the first day of the regular season, assuming they satisfy requirements of a Summer Contract (see next card)

Front 98

Requirements of a Summer Contract


VII(4)(i)(1)

Back 98

i) Can't provide for any Compensation that can be paid or earned prior to the start of the regular season;
ii) Cannot be guaranteed at all
iii) Only consideration is per diem, lodging, transport, disability insurance policy, etc.
iv) Must be terminated prior to the regular season unless the team has cap room/exception for such contract.
V) If player is a Veteran Free Agent who last played for the team, he can only sign a Summer Contract for the 1-year minimum.

Front 99

Team Salary Summaries


VII(4)(j)

Back 99

NBA has to provide the NBAPA with Team Salary summaries and a list of current Exceptions twice a month during the regular season and once a week during the off-season.

Front 100

Basic Rule for Operation of the Salary Cap

VII(5)(a)

Back 100

Team Salary cannot exceed the Salary Cap at any time unless the team is using one of the exceptions. See VII(6)

Front 101

General rule regarding entering contracts when a team has cap room
VII(5)(b)

Back 101

A team with cap room can sign a player to a contract that calls for a salary in the first year covered by the contract that does not exceed the team's cap room.

Front 102

General rule for raises/decreases in contracts (i.e. for players not re-signing with Bird rights)

VII(5)(c)(1)(i)

Back 102

Player's non-incentive compensation can only increase or decrease by 4.5% of the FIRST YEAR'S salary.

Note: this means the annual raises don't compound; the max raise/reduction is the same each year.

Note: Same rule applies to Likely and Unlikely Bonuses, respectively. Each can only increase or decrease by 4.5% of what they each were in the first year of the contract.

Front 103

Maximum allowable raises in contracts between Bird/Early Bird free agents and their prior teams

VII(5)(c)(2)

Back 103

Annual raises or decreases by 7.5% of the first year's salary.

Note: Same rule applies to Likely and Unlikely Bonuses, respectively. Each can only increase or decrease by 7.5% of what they each were in the first year of the contract.

Exceptions: Players signed pursuant to MLE, MMLE, Room Exception, Bi-annual Exception, or Sign and Trade can only receive 4.5% raises.

Note: In case of exceptions, they aren't using Bird rights to re-sign, and higher annual raises for S/T were eliminated in this CBA to help teams keep their players..

Front 104

When are players with Bird-rights who re-sign with prior team not allowed 7.5% raises?

VII(5)(c)(2)

Back 104

Exceptions: Players signed pursuant to MLE, MMLE, Room Exception, Bi-annual Exception, or Sign and Trade can only receive 4.5% raises.

Note: In case of exceptions, they aren't using Bird rights to re-sign, and higher annual raises for S/T were eliminated in this CBA to help teams keep their players.

Note: Bird or Early Bird players who re-sign with their prior teams using cap space rather than some other exception can receive 7.5% annual raises, a la Dwyane Wade in 2014.

Front 105

Maximum raises/decreases for normal extensions (non-Rookie Scale or Extend and Trades)

VII(5)(c)(3)

Back 105

Annual raises or decreases by 7.5% of the first year of the extension's salary.

Note: Same rule applies to Likely and Unlikely Bonuses, respectively. Each can only increase or decrease by 7.5% of what they each were in the first year of the extension.

Front 106

Maximum raises/decreases for extensions of Rookie Scale contracts

VII(5)(c)(4)

Back 106

Annual raises or decreases by 7.5% of the first year of the extension's salary.

Note: Same rule applies to Likely and Unlikely Bonuses, respectively. Each can only increase or decrease by 7.5% of what they each were in the first year of the extension.

Front 107

Maximum raises/decreases for Extend and Trades

VII(5)(c)(5)

Back 107

Player's non-incentive compensation can only increase or decrease by 4.5% of the first year of the extension's salary.

Note: Same rule applies to Likely and Unlikely Bonuses, respectively. Each can only increase or decrease by 4.5% of what they each were in the first year of the contract. Also note that the last year of the ORIGINAL contract has to include incentives for any to be included in new contract.

Note: This was decreased in 2011 CBA mostly b/c of MeloDrama in 2011.

Front 108

How are physical condition or academic achievement incentives or promotional appearance incentives treated for purposes or raises/decreases?

VII(5)(c)(6)

Back 108

They are treated as Regular Salary rather than Incentive Compensation

Front 109

What contracts have 4.5% maximum raises/decreases and what have 7.5%?

VII(5)(c)

Back 109

4.5%: Sign and trades, extend and trades, signings using MLE, MMLE, Room Exception, Bi-annual Exception, any free agent signing from another team.

7.5%: Qualifying and Early Qualifying Veteran Free Agents re-signing with prior teams, normal extensions (non-extend and trade), Rookie Scale extensions.

Front 110

Cap on unlikely bonuses

VII(5)(d)(1)

Back 110

No contract can have Unlikely Bonuses exceeding 15% of the player's Regular Salary for that year.

Front 111

How do Unlikely Bonuses affect Salary Cap Room?

VII(5)(d)(2)

Back 111

If a player is being signed using cap room or an exception, the Unlikely Bonuses can't be so high that they would cause the player's Salary to exceed the amount of cap room the team had for that year if they were reached.

Note: To determine whether a team has cap room for a new Unlikely Bonus, the method is to assume that all Unlikely Bonuses in any new contracts handed out that year will be triggered.

Front 112

General rules regarding "Future Contracts"

VII(5)(e)(1-3)

Back 112

1. Contracts must be for at least one season.
2. Teams and players can't enter into contracts between the end of the Regular Season and June 30, except for amendments to existing contracts.
3. Any contract for more than one 1 season can't skip seasons.

Front 113

Exceptions to general rules regarding "Futures Contracts"

VII(5)(e)(4)

Back 113

1. A player who received a Required Tender or Qualifying Offer may accept beginning on the date he receives it.
2. First round picks who haven't yet signed can enter into contracts for the next year from February 1 to June 30 assuming they were under contract to a non-NBA team during that season.

Front 114

What are the exceptions to the salary cap?

VII(6)(a-k)

Back 114

a) Existing contracts
b) Veteran free agent exceptions
c) Disabled Player Exception
d) Bi-annual Exception.
e) Non-Taxpayer Mid-Level Salary Exception (MLE)
f) Taxpayer Mid-Level Salary Exception (MMLE)
g) Mid-Level Salary Exception for Room Teams (Room Exception)
h) Rookie Exception
i) Minimum Player Salary Exception
j) Traded Player Exception (TPE)
k) Reinstatement

Front 115

Exceptions: Existing Contracts

VII(6)(a)

Back 115

A team can exceed the Salary Cap to the extent of its existing contractual commitments.

E.g., if a player is signed to a contract using cap room in year 1, his salary the next year (even if it includes raises) is allowed even if it causes the team to exceed the cap.

Front 116

Exceptions: Veteran Free Agent Exception

VII(6)(b)

Back 116

A team is allowed to exceed the Salary Cap to re-sign a player who last played for it.

Note: This also applies to an expansion team if a player is selected in an expansion draft that year

Front 117

How much is a Qualifying Veteran Free Agent allowed to re-sign for?

VII(6)(b)(1)

Back 117

Up to the maximum salary in the first Salary Cap year.

Front 118

How much is a Non-Qualifying Veteran Free Agent allowed to re-sign for in the first year (if team is over cap)?

VII(6)(b)(2)

Back 118

The greater of:
i) 120% of the Regular Salary and 120% of the Likely and Unlikely Bonuses in the preceding year;
II) Salary plus Unlikely Bonuses totaling 120% of the minimum salary;
iii) If the player is a restricted free agent, the amount of a qualifying offer

Annual raises and/or decreases are allowed up to the maximum raise/decrease for that player in subsequent years of the contract.

Front 119

How much is an Early Qualifying Veteran Free Agent (Early Bird rights) allowed to sign for?

VII(6)(b)(3)(i-ii)

Back 119

1. Contract must cover at least 2 seasons, not including one covered by an option year
2. May provide the greater of:
A) 175% of Regular Salary and Likely/Unlikely bonuses, respectively, in the last year of his preceding contract;
B) 104.5% of the Average Player Salary for the previous cap year
C) If an EQVFA with 2 years of service receives an Offer Sheet, the team can use this exception to match the offer sheet.

Note: For C, max offer sheet is MLE amount for first 2 years, then up to the max for years 3 and 4. In this scenario, matching team has to use the exception for the first 2 years, then a cap hit of the max in years 3 and 4. Offering team gets to distribute the salaries equally across the 4 years for their cap hit, a la Jeremy Lin and Omer Asik in the summer of 2012.

Front 120

What is the Disabled Player Exception?

VII(5)(c)(1)

Back 120

Allows a team to acquire one player to replace a player who can't play as the result of a Disabling Injury or Illness.

Front 121

Disabling Injury or Illness for purposes of Disabled Player Exception

VII(6)(c)(2), (4)

Back 121

Any injury or illness that in the opinion of a league-appointed (or neutral, if original finding is challenged by the NBAPA) physician, makes it substantially more likely than not that the player will not be able to play before June 15.

Front 122

Dates team can apply for Disabled Player Exception

VII(6)(c)(1)(i)

Back 122

i. Application may be made between July 1 and January 15, regardless of when injury occurred.

Front 123

Amount of Disabled Player Exception

VII(6)(c)(1)(ii-iii)

Back 123

Team can either sign a Replacement Player or acquire one from another team.
ii. If signing the player, the contract must be for only one season and provide for Salary and Unlikely Bonuses totaling lesser of A) 50% of Disabled Player's salary or B) the MLE.
iii. If acquiring the player, he must have only one season left on his contract, with the same limitations on Salary plus $100,000.

Front 124

Expiration of Disabled Player Exception

VII(6)(c)(3)

Back 124

March 10 if unused

Front 125

Process for determining whether player is disabled

VII(6)(c)(4)

Back 125

1. Physician designated by the NBA determines whether it is substantially more likely than not that the player would be unable to play through the following June 15. Physician reviews the medical info and examines the player if necessary. NBA pays for this.
2. NBA must advise NBAPA of determination within 1 business day of it being made.
3. If NBAPA disputes the finding, then a neutral physician (selected for the purpose at the beginning of the cap year), examines the medical info and player, if necessary. Parties split the cost.
4. Physician must make a determination within 3 business days. This determination is binding and unappealable.
5. Player has to cooperate and be truthful in the course of this determination.

Front 126

What if the Disabled Player returns to action that year?

VII(6)(c)(6)

Back 126

He can resume playing for the team even if it has used the Disabled Player Exception. If it has not yet used the Exception, it is extinguished.

Front 127

What teams can use the Disabled Player Exception with respect to a particular player?

VII(6)(c)(7)

Back 127

Only one team can use it, the team that had the player under Contract when the injury became known or should have become known.

Front 128

What happens if the request for a Disabled Player Exception is denied?

VII(6)(c)(8)

Back 128

1. Team cannot make another request to replace the same player for another 90 days, and the team establishes that the new request is based on a new injury or aggravation of the previous injury.
2. Whether request is granted or denied, team can renew its request for the following season, beginning July 1.

Front 129

Bi-annual Exception (BAE)

VII(6)(d)

Back 129

1. A salary cap exception for $2.016 million in 2013-14 (goes up about 60k each year)
2. Can be divided among more than 1 player.
3. Contract(s) can't exceed 2 years.
4. Annual raises of 4.5% allowed for 2nd year.

Note: If team uses BAE (or any exception) to sign player, cannot include above 4.5% annual raises/decreases even if it's re-signing it's own Bird rights free agent.

Salary Cap Year Bi-annual Exception
2011-12 $1.900 million
2012-13 $1.957 million
2013-14 $2.016 million
2014-15 $2.077 million
2015-16 $2.139 million
2016-17 $2.203 million
2017-18 $2.269 million
2018-19 $2.337 million
2019-20 $2.407 million
2020-21 $2.479 million

Front 130

Restrictions on use of Bi-Annual Exception

VII(6)(d)

Back 130

1. As name implies, cannot be used in consecutive years.
2. Can only be used if team is below the apron (luxury tax level plus $4 million), and creates a hard cap at the apron for the rest of the year.
3. Can only be used if the team hasn't used the MMLE or the Room exception that year.

Front 131

Non-Taxpayer Mid-Level Salary Exception (MLE)

VII(6)(e)

Back 131

1. A salary cap exception for $5.15 million in 2013-14 (goes up about 150k each year)
2. Can be divided among more than 1 player.
3. Contract(s) can't exceed 4 years.
4. Annual raises allowed for subsequent years.

Note: If team uses MLE (or any exception) to sign player, cannot include above 4.5% annual raises/decreases even if it's re-signing it's own Bird rights free agent.

Salary Cap Year
Non-Taxpayer Mid-Level
Salary Exception
2011-12 $5.000 million
2012-13 $5.000 million
2013-14 $5.150 million
2014-15 $5.305 million
2015-16 $5.464 million
2016-17 $5.628 million
2017-18 $5.797 million
2018-19 $5.971 million
2019-20 $6.150 million
2020-21 $6.335 million

Front 132

Restrictions on use of MLE

VII(6)(e)

Back 132

1. Can only be used if team is below the apron (luxury tax level plus $4 million), and creates a hard cap at the apron for the rest of the year.
2. Can only be used if the team hasn't used the MMLE or the Room exception that year.
3. Notwithstanding the above, can be used to match an offer sheet in restricted free agency to a free agent with 1 or 2 years experience. (Like ones given to J. Lin and O. Asik in 2012, although they were not matched.)

Front 133

Order of use of BAE, MLE, MMLE, Room Exception

VII(6)(d-g)

Back 133

1. Team can use BAE and MLE in the same year. MMLE and Room Exception cannot be used after BAE is used.
2. If team uses MMLE, cannot use any other of these (MLE/Room/BAE) exceptions.
3. Once Room is used, none of the other 3 exceptions can be used after that.

If team plans to use BAE, the only other exception that can be used is the MLE. Room, MLE, and MMLE can't be used in the same year.

Front 134

Taxpayer Mid-Level Salary Exception (MMLE)

VII(6)(f)

Back 134

General rule: Can be used only if Team Salary exceeds the Apron immediately after its use.

1. A salary cap exception for $3.183 million in 2013-14 (goes up about 100k each year)
2. Can be divided among more than 1 player.
3. Contract(s) can't exceed 3 years.
4. Annual raises allowed for subsequent years.

Note: If team uses MMLE (or any exception) to sign player, cannot include above 4.5% annual raises/decreases even if it's re-signing it's own Bird rights free agent.

Salary Cap Year
Taxpayer Mid-Level
Salary Exception
2011-12 $3.000 million
2012-13 $3.090 million
2013-14 $3.183 million
2014-15 $3.278 million
2015-16 $3.376 million
2016-17 $3.477 million
2017-18 $3.581 million
2018-19 $3.688 million
2019-20 $3.799 million
2020-21 $3.913 million

Front 135

Use of MLE/MMLE When Near the Apron

VII(6)(f)(5)

Back 135

If a team under the Apron uses its MLE, it can still exceed the Apron hard cap so long as it hasn't used more of it than would exceed the MMLE amount.

If it does exceed the Apron, then the team is considered to have used its MMLE instead of its MLE.

Front 136

Restrictions on use of MMLE

VII(6)(f)(1)

Back 136

1. Can only be used if Team Salary after its use exceeds the Apron. (Apron is Tax Level plus $4 million)
2. Team cannot have used any of BAE, MLE, or Room Exception and use MMLE.
3. Commencing with 2013-14 Season, if team has acquired a player via sign and trade it cannot use the MMLE.
4. Similarly, if a team has used its MMLE it cannot acquire a player via sign and trade.

Front 137

Mid-Level Salary Exception for Room Teams (Room Exception)

VII(6)(g)

Back 137

A salary cap exception for under the cap teams who have lost their salary cap exceptions, it is $2.652 million in 2013-14 and increases about $80,000 each year. Contracts can't exceed 2 seasons in length, with 4.5% annual raise/decrease allowed the 2nd year. Exception may be split up among multiple players.

Exception arises on the day after the team's salary falls below the cap.

Mid-Level Salary
Exception for Room Teams
2011-12 $2.500 million
2012-13 $2.575 million
2013-14 $2.652 million
2014-15 $2.732 million
2015-16 $2.814 million
2016-17 $2.898 million
2017-18 $2.985 million
2018-19 $3.075 million
2019-20 $3.167 million
2020-21 $3.262 million

Front 138

How are exceptions included in team salary if team drops below the cap?

Back 138

When calculating team salary, a team's exceptions (including TPE and disabled player) are included in team salary if the team gets below the cap.

E.g. Team has salary of 58 million, cap is 62 million, and it still has MLE, team salary (for purposes of calculating cap room) is still about $63 million.

if team salary plus exceptions including TPE and disabled player) still don't reach the salary cap at any point, those exceptions are lost. The team may also renounce them to drop lower under the cap if it likes.

Note: Room Exception may only be used if team has lost MLE/MMLE/BAE in this way, or if team has renounced those exceptions.

Front 139

Restrictions on use of Room Exception

VII(6)(g)

Back 139

1. Team must be below the Salary Cap to use it.
2. Team has not used BAE, MLE, or MMLE, and in fact has lost those exceptions.
3. Team will be prohibited from using BAE, MLE, or MMLE once using Room Exception.

Front 140

Rookie Exception

VII(6)(h)

Back 140

A team can always enter into a Rookie Scale Contract.

Front 141

Prohibition on Combining Exceptions

VII(6)

Back 141

Team cannot combine exceptions to sign a player to a contract, or combine exceptions with cap room to do so. If a team has multiple exceptions available it can choose which one to use.

Front 142

Minimum Player Salary Exception

VII(6)(i)

Back 142

Team can sign a player to a minimum contract up 2 years in length that has no bonuses of any kind. No raises are allowed for the second year.

A team can also trade for a player with such a contract.

Front 143

Traded Player Exception (TPE)

VII(6)(j)

Back 143

Allows a team over the cap to replace traded player(s) with 1 or more players acquired by trade.

TPE allows teams to acquire players in trades either 1) simultaneously or 2) up to a year after the first trade if a team sends out more salary than it receives in the first trade AND it only trades away one player.

Note: What we commonly refer to as matching salaries in trades is technically using a TPE created by the traded player to receive another player, even if it occurs simultaneously.

Note: If year anniversary of the trade doesn't fall on a business day, it expires the next business day after the anniversary.

Front 144

Maximum amount a non-taxpaying team can receive in trade based on outgoing salary

VII(6)(j)(1)(i, iii)

Back 144

This depends on the amount of outgoing salary.
$0 to $9.8 million =150% of the outgoing salary, plus $100,000
$9.8 million to $19.6 million = outgoing salary plus $5 million
$19.6 million and up = 125% of the outgoing salary, plus $100,000

Note: Relevant salary for the received players is their post-trade salary, important to consider if player has a trade bonus. Relevant salary for the sent player is his pre-trade salary.

Front 145

Maximum salary a taxpaying team can receive in trade:

Back 145

125% of outgoing salary, plus $100,000.

Note: Relevant salary for the received players is their post-trade salary, important to consider if player has a trade bonus. Relevant salary for the sent player is his pre-trade salary.

Front 146

Amount of salary a team under the cap can receive in a trade:

VII(6)(j)(2-3)

Back 146

1. Amount equal to the team's cap room plus $100,000; or

2. Team can use the normal trade rules for teams over the cap as well if trade would put them over the cap and that would allow it to acquire more salary.

Front 147

Amount of non-simultaneous TPE

VII(6)(j)(1)(ii)

Back 147

100% of the traded player(s)' salary minus the received salary, plus $100,000.

Note: Relevant salary for the received players is their post-trade salary, important to consider if player has a trade bonus. Relevant salary for the sent player is his pre-trade salary.

Front 148

Rules regarding creation and use of non-simultaneous TPE

VII(6)(j)

Back 148

1. Team must receive less salary back than it sent out in an initial trade.
2. Team must be over the cap at start of the initial trade to receive TPE.
3. Team can trade away only one player to receive a TPE from that trade. If players' salaries are aggregated it cannot receive a TPE.*
4. TPE cannot be combined with any other exception.
5. TPEs can be used up piecemeal, or to acquire multiple players at once.
6. TPE expires a year after initial trade, or first business day after the year anniversary if it falls on holiday or weekend.

*Note, this inspires teams to try to structure trades in which they trade away multiple players as technically separate transactions.

Front 149

Amount of TPE created by sign and trade or extend and trade

VII(6)(j)(4)

Back 149

1. Sign and Trades: If new salary is greater than 120% of player's previous salary, TPE is the greater of i) Salary for last season of his previous contract or ii) 50% of the salary for the first season of the new contract.
2. Extend and Trades: If new salary is greater than 120% of player's previous salary, TPE is the greater of i) Salary for last season of the original term of his contract or ii) 50% of the salary for the first season of the extension.


Note: If previous contract was a minimum contract, his previous salary for purposes of this section includes the amount of the minimum contract paid by the league.

Front 150

Reinstatement Exception

VII(6)(k)

Back 150

If a player has been banned from the league for drug use and subsequently reinstated, the team may enter into a contract with him consistent with the applicable rules set forth in Article XXXIII, Section 12(f) or (g).

Front 151

Prorated Reduction of Exceptions

VII(6)(m)(5)

Back 151

Starting on January 10, amount of exception is reduced by (1/# of days in regular season) for each day that passes until the end of the regular season.

Note: Does not include TPE, minimum salary exception, and disabled player exception.

Front 152

Salary for players whose rookie options were not picked up and re-sign with original team

VII(6)(m)(4)

Back 152

Team can still enter into a new contract with them for the amount they would have been making in the option year had it been picked up.

Front 153

Veteran Extensions: What contracts may be extended, and when?

VII(7)(a)

Back 153

1. Only contracts of 4 or more years may be extended.
2. Contract may not be extended any earlier than the third anniversary of the signing of the contract.

Note: This applies to non-rookie extensions only. Those have separate rules.

Front 154

How soon after an extension or renegotiation (increasing salary by more than 10%) may another extension be agreed to?

VII(7)(a)(2)(i)

Back 154

Three years after the extension or negotiation is agreed to.

Front 155

Effect of exercising ETO on right to extend a contract?

VII(7)(a)(2)(ii)

Back 155

Once an ETO has been exercised, that contract may not be extended.

Front 156

Effect of team or player option on right to extension

VII(7)(a)(2)(iii)

Back 156

1. A contract may be extended even after an option is exercised by either player or team.

2. If an option is not exercised, contract may be extended only if:
A) Extension covers at least 2 years, excluding any new option year; and
B) The player's Regular Salary, Likely Bonuses, and Unlikely Bonuses are no less than what he would have received under the non-exercised option.

Front 157

What is the maximum amount of an extension?

VII(7)(a)(3)(i)

Back 157

107.5% of the Regular Salary, Likely Bonuses, and Unlikely Bonuses of the last year of the previous contract. Maximum annual increases/decreases are 7.5%.

Note: If extension is part of a trade and extend, then it's limited to 104.5% and 4.5% annual raises, respectively.

Front 158

Special extension rules for player who has played with a team for at least 10 seasons

VII(7)(a)(4)

Back 158

If player has a decreasing salary throughout the original contract, the average annual value of the contract or extension rather than the value in the last year may be used as the baseline for the extension.

Front 159

When are Rookie Scale Extensions allowed?

VII(7)(b)(1)

Back 159

Between the end of the Moratorium Period and October 31 of his 4th season, aka second option year.

Front 160

Definition of Renegotiation

I(ww)

Back 160

A Contract amendment that provides for an increase in Salary and/or Unlikely Bonuses for already existing years of the contract.

Front 161

When are renegotiations allowed?

VII(7)(c)(1), (4) (5)

Back 161

1. Only allowed on contracts of 4 or more years.
2. Only after the third anniversary of the signing of that contract.
3. Team must be below the cap.
4. Cannot renegotiate between March 1 and June 30.

5. Cannot occur in conjunction with a trade.

Front 162

If a contract has been Renegotiated, when may it next be Extended or Renegotiated?

VII(7)(c)(2)

Back 162

Not until the third anniversary of the Renegotiation.

Note: Assumes original Renegotiation increased contract by more than 4.5%.

Front 163

Amount of renegotiation

VII(7)(c)(3)(i-iii)

Back 163

1. Renegotiation can provide for additional Regular Salary, and Likely/Unlikely bonuses up to the amount of the team's cap room (and the max salary, of course)

2. Every category (Salary, Likely/Unlikely bonuses) must also be increased (over the original for that season) for remaining seasons of the contract.

3. Annual raises/decreases from the renegotiated salary are limited to 7.5% for the rest of the contract.

4. No renegotiation can contain a signing bonus, unless it also includes an Extension.

Front 164

Renegotiations to decrease salary

VII(7)(d)(1)

Back 164

Are not allowed.

Front 165

Amount of Extension when signed in conjunction with Renegotiation

VII(7)(d)(2)

Back 165

Salary and incentives, respectively, can decrease by no more than 40% of the Regular Salary in the last year of the renegotiated contract.

Front 166

Waiver of Trade Bonus to facilitate trades

VII(7)(d)(3)

Back 166

Player may waive trade bonus for the sole purpose of facilitating a trade, but only to the extent necessary to match salaries to make the trade legal.

If the player waives his trade bonus, it cannot be extended or renegotiated until 6 months after the trade (subject to other rules on extensions/renegotiations)

Front 167

Stretch Provision

VII(7)(d)(5)

Back 167

Allows a team to waive a player and "stretch" any remaining guaranteed salary across succeeding salary cap years, provided contract or extension was entered into under new CBA. (If only the extension was entered under new CBA, only the salary attributable to the extension may be stretched.)

How long the contract is stretched for depends on when the player is waived.

Limitation: Team cannot use stretch provision if it would cause the amount of Team Salary allocable to all waived players to exceed 15% of the cap.

Front 168

Stretch Provision: If player waived between September 1 through June 30

VII(7)(d)(5)(A)

Back 168

i) Player's post-waiver guaranteed Salary for that year is unchanged
ii) Player's guaranteed Salary for each remaining cap year on his contract is aggregated and then allocated evenly over twice the number of Seasons remaining on the contract following the year in which player was waived.

E.g., player is waived in year 1 of a 3 year, $3 million contract. His Salary for that year is $1 million, but then $500,000 over each of the next 4 years rather than $1 million over each of the next 2 years.

Front 169

Stretch Provision: If player waived between July 1 and August 31

VII(7)(d)(5)(B)

Back 169

Salary is aggregated and allocated evenly over twice the number of years remaining on the contract plus one.

E.g., Bulls waived Richard Hamilton, who had $1 million guaranteed on his deal, in summer of 2013. Now his cap hit is $333,333 for each of the next 3 years.

Front 170

Stretch Provision: Procedure for exercising provision

VII(7)(d)(5)

Back 170

Within 1 business day of waiving the player, team must provide the NBA with written statement electing to stretch the player's salary. NBA must inform NBAPA by fax or email within 2 business days of that.

Front 171

Limitation on amendments to shorten or terminate contracts

VII(7)(d)(6)

Back 171

They are not allowed, except in accordance with Waiver procedure or Article XII, Section 2 governing player options.

Front 172

Maximum cash that can be sent or received in trades per Salary Cap Year

VII(8)(a)

Back 172

$3.2 million of each for 2013-14 Cap Year. This is in TOTAL for the year, not per transaction as under old CBA.

There are two separate limits, one for amounts received and another for amounts sent out.

Note: In a sign and trade, any signing bonus paid by signing team counts towards the limit for both teams.



2011-12 $3.0 million
2012-13 $3.1 million
2013-14 $3.2 million
2014-15 $3.3 million
2015-16 $3.4 million
2016-17 $3.5 million
2017-18 $3.6 million
2018-19 $3.7 million
2019-20 $3.8 million
2020-21 $3.9 million

Front 173

Trades of players on one year contracts who would have Early Bird or Bird rights at the end of the year

VII(8)(b)

Back 173

Such players cannot be traded without their consent. If they assent to such a trade, they lose their Bird rights with the team they are traded to.

Front 174

Trades of free agents to be after trade deadline

VII(8)(c)

Back 174

Team cannot trade players after the deadline who are in the last year of their contract, or in a year that COULD be the last year of their contract if options are not exercised by either player or the team.

Note: This is another reason to have non-guarantee rather than a team option. The latter must be exercised for a player to be traded between the deadline and start of the new cap year. Non-guarantees are not restricted in this way.

Front 175

Limitation on trading newly-signed rookies

VII(8)(d)(i)

Back 175

Can't be traded until 30 days after the contract is signed.

Front 176

Limitation on trades of newly-signed free agents

VII(8)(d)(ii)

Back 176

Can't be traded until the later of A) 3 months after the date the contract was signed; or B) December 15.

Note: Does not apply to initial trade in a sign and trade, but does apply if contract were to be traded a second time.

Front 177

Limitation on trade of newly-signed free agents who signed using Bird rights or Early Bird rights

VII(8)(d)(iii)

Back 177

Cannot be traded until the later of x) 3 months after the contract was signed or y) January 15.

Note: Bird or Early Bird Exception must actually have been used to sign the player, i.e. the team must be over the cap. Player's new salary also must be greater than 120% of his previous year's salary.

Note: Does not apply if the player is on a minimum contract.

Front 178

When are sign and trades allowed?

VII(8)(e)(1)

Back 178

i) Free agent must have finished season on Prior Team's roster
ii) Contract must be for at least 3 seasons (excluding an option year) but no more than 4 seasons.
iii) Contract not signed pursuant to MLE, MMLE, or Disabled Player Exception
iv) First year of contract is fully guaranteed
v) Contract entered into prior to first day of regular season
vi) If contract is for 5th year player, cannot exceed 25% of cap even if player is eligible for 30%
vii) Team salary cannot exceed the Apron after the S&T, and team is hard-capped at the Apron that year.

Front 179

When are Extend and Trades allowed?

VII(8)(e)(2)

Back 179

i) Cannot occur after regular season if it's during last year of the existing contract (or year that could be the last year if options are or are not exercised)
ii) Cannot cover more than 3 seasons from the date the extension is signed.

Front 180

Exhibit 6's with Sign or Extend and Trades

VII(8)(e)(3)

Back 180

Are not allowed. However, Teams involved in the trade are allowed to agree that trade is contingent on player passing a physical. Since S&T and E&T contracts are contingent on trade happening, failing the physical voids the contract, so it really has essentially the same effect as an Exhibit 6 anyway.

Front 181

Limitations on trades after extensions that are larger or longer than that allowed in extend and trades

VII(8)(f)

Back 181

1. Player can't be traded for 6 months after signing such an extension.
2. If player is traded, the acquiring team can't sign him to larger or longer extension than that allowed in an extend and trade for 6 months.

Note: This means any extension that is more than 3 seasons and/or in which starting salary is greater than 104.5% of last year of original contract's salary or has greater than 4.5% annual raises (assuming team can't sign player using cap room). Can't do an extend and trade contract exceeding those numbers.

Front 182

Trades of players who are in last year of rookie contract but signed an extension

VII(8)(g)

Back 182

For purposes of determining whether the acquiring team has cap room for the contract, the player's Salary is deemed to be the average of the Salaries for the last season of the rookie contract and all the years of the extension.

Note: This is to prevent a team for trading for a cheap rookie player before his extension that they wouldn't have cap room for kicks in.

Front 183

Original team re-signing traded players who are then waived by acquiring team

VII(8)(h)

Back 183

Cannot re-sign until the earlier of 1) a year after the trade is completed or 2) the July 1 following the last season of that player's contract.

Front 184

Effect of trade on pre-existing financial arrangements between Team and Player

VII(8)(i)

Back 184

With a trade, "shall be required to divest themselves, on terms mutually agreeable to the player and the Team, of any pre-existing financial arrangements between such Team and such player.

Front 185

NBA reporting of trade to NBAPA

VII(8)(j)

Back 185

NBA must report principle terms of the trade via fax or email to NBAPA. However, NBA can omit from this summary any terms that the league or one or more teams involved "reasonably deem confidential."

Note: Omitted information cannot include amount of cash payments.

Front 186

Computing allowable length of extension

VII(9)(a)

Back 186

If a a contract or extension is signed after the beginning of a Season, that season counts as a season of the contract or extension.

Option years on the original contract also count as a season covered by the contract.

E.g., It is late in 2013. Player's 5-year contract expires in 2015, has ETO with effective year of 2014. Maximum extension he could sign is 4 years, BUT that is effectively only 2 years onto the end of the contract because he still has 2013-14 and 2014-15 (which counts regardless of the ETO) before his original contract expires.

Front 187

Escrow and Tax Arrangement Definitions: Adjustment Player

VII(12)(a)(1)

Back 187

Every current or former player who is included in Team Salary, plus those excluded under the Long-Term Injury Exclusion and Amnesty provisions.

Note: For Section 12, player and Adjustment Player may be used interchangeably.

Front 188

Escrow and Tax Arrangement Definitions: Aggregate Compensation Adjustment Amount

VII(12)(a)(2)

Back 188

The lesser of i) Aggregate Salaries and Benefits Adjustment Amount and (ii) 10% of Total Salaries. For purposes of ii), Total Salaries is increased by the amount included in Benefits pursuant to Article IV(6)(k)(1)

Front 189

Escrow and Tax Arrangement Definitions: Aggregate Compensation Adjustment Amount Shortfall

VII(12)(a)(3)

Back 189

The amount that the NBA receives from the Escrow Agent is less than the Aggregate Compensation Adjustment Amount

Front 190

Escrow and Tax Arrangement Definitions:Aggregate Salaries and Benefits Adjustment Amount

VII(12)(a)(4)

Back 190

The lesser of i) the Overage and ii) Total Salaries and Benefits.

Front 191

Escrow and Tax Arrangement Definitions: Audit Report Challenge Period

VII(12)(a)(5)

Back 191

The period between when the Interim Audit Report is issued and the date on which all challenges to it are resolved.

Front 192

Escrow and Tax Arrangement Definitions: Deduction Date

VII(12)(a)(6)

Back 192

Each of the 12 semi-monthly payment dates from 11/15 - 5/1 provided for under paragraph 3 of the UPC

Front 193

Escrow and Tax Arrangement Definitions: Designated Share

VII(12)(a)(7)

Back 193

The amount of BRI that the players get. It is pegged at 50% as a default, but can changed based on league revenues and whether player salaries exceed or are below that number. See Section 12(b)(3) for calculation of Designate Share.

Front 194

Escrow and Tax Arrangement Definitions: Escrow Agent

VII(12)(a)(8)

Back 194

The Agent who administers the Escrow Amounts

Front 195

Escrow and Tax Arrangement Definitions: Escrow Amount

VII(12)(a)(9)

Back 195

For an Adjustment Player, sum of:
1: Base Escrow Amount
2. Performance Bonus Escrow Amount
3. Trade Bonus Escrow Amount

Front 196

Escrow and Tax Arrangement Definitions: Base Escrow Amount

VII(12)(a)(9)(i)

Back 196

10% of the player's Salary. For purposes of this calculation, Salary excludes all bonuses.

Note: Base Escrow Amount for minimum salaried players includes the amount reimbursed by the League.

Front 197

Escrow and Tax Arrangement Definitions: Performance Bonus Escrow Amount

VII(12)(a)(9)

Back 197

10% of the Performance Bonuses actually earned by the player during that year.

Front 198

Escrow and Tax Arrangement Definitions: Trade Bonus Escrow Amount

VII(12)(a)(9)

Back 198

If player is traded between the end of the Season and June 30, this includes 10% of the trade bonus that is included in his Salary for that cap year.

Front 199

Escrow and Tax Arrangement Definitions: Escrow Schedules

VII(12)(a)(10)

Back 199

Schedules prepared by the NBA with respect to each Cap Year setting forth when Escrow is supposed to be taken out of the player's compensation and/or delivered to the Escrow agent.

Front 200

Escrow and Tax Arrangement Definitions: Individual Compensation Adjustment Amount

VII(12)(a)(11)

Back 200

Formula:

(Aggregate Compensation Adjustment Amount) x (Adjustment Player's Salary)/(All Adjustment Players' Salaries)

For these purposes: Salary includes only Performance Bonuses actually earned. Minimum salaried players' salary includes amount paid by the League.

Front 201

Escrow and Tax Arrangement Definitions: Individual Shortfall Adjustment Amount

VII(12)(a)(12)

Back 201

If the players make such a high percentage of BRI that the escrow system can't adjust for it by only taking out 10%, the next year each player's contract gets reduced to make up for it. The Individual Shortfall Adjustment Amount is the amount each player's contract gets reduced.

Front 202

Escrow and Tax Arrangement Definitions: New Benefit Adjustment Amount

VII(12)(a)(13)

Back 202

Difference between (Aggregate Salaries and Benefits Adjustment Amount) and (Aggregate Compensation Adjustment Amount)

Front 203

Escrow and Tax Arrangement Definitions: Overage

VII(12)(a)(14)

Back 203

The amount, if any, by which Total Salaries and Benefits exceed the Designated Share for a given year

Front 204

Escrow and Tax Arrangement Definitions: Performance Bonus Deduction Date

VII(12)(a)(15)

Back 204

Earlier of i) the date a Performance Bonus is paid to the player and ii) the day following the last day of the NBA Finals

Front 205

Escrow and Tax Arrangement Definitions: Salary Escrow Agreement

VII(12)(a)(16)

Back 205

The Escrow Agreement to be entered into with the Escrow Agent

Front 206

Calculation of Tax Level

VII(12)(a)(17)

Back 206

(53.51% of Projected BRI) - (Projected Benefits) / (Number of teams)

Note: Does not include expansion teams in first 2 years of existence.

Front 207

Tax Level if Total Salaries and Benefits are less than the Designated Share in the preceding year

VII(12)(a)(17)(vi)

Back 207

Tax Level is increased for the next year by the amount of the shortfall divided by # of teams in the NBA that next year.

Note: # of teams does not include expansion teams in first two years of existence.

Front 208

Calculation of Tax Level in event of an Overage less than 6% of Total Salaries and Benefits

VII(12)(a)(17)(vii)

Back 208

1. If Overage is less than or equal to 6% of Total Salaries and Benefits, then no change.
2. If Overage is more than 6% of Total Salaries and Benefits, then Tax Level is reduced. (See next card)

Front 209

Calculation of Tax level in event of an Overage more than 6% of Total Salaries and Benefits.

VII(12)(a)(17)(vii)

Back 209

1. Subtract 6% of Total Salaries and Benefits from the Overage.

2. If Projected BRI for the new cap year is higher than 8% of BRI for the previous year; or if the Overage is more than 9% of Total Salaries and Benefits, then formula is: ((Overage) - (6% of TS&B)) / (# of teams). Tax level is reduced by this much.

3. If Projected BRI for the new cap year is higher than 8% of BRI for the previous year; and if the Overage is LESS than 9% of Total Salaries and Benefits, then formula is: ((Overage) - (6% TS&B)) - (((Projected BRI for new year) - (BRI from previous year) - (8% of BRI for previous year)) * (53.51%)) / (# of teams)

If this number is negative, then no reduction in Tax Level. If positive, then Tax Level is reduced by this amount.

Front 210

Escrow and Tax Arrangement Definitions: Trade Bonus Deduction Date

VII(12)(a)(18)

Back 210

The earlier of i) date a trade bonus for a certain cap year is paid to an Adjustment Player; or ii) June 30 of that cap year

Front 211

Effect on player compensation if there is an Overage

VII(12)(b)(1)

Back 211

Contracts of all Adjustment Players are amended, so that:
1. Compensation of all Adjustment players is reduced by the Aggregate Compensation Adjustment Amount
2. The New Benefit Amount is reduced by the New Benefit Adjustment Amount
3. The Additional Benefit Amount (i.e. the 1% of BRI for additional benefits) is reduced by any remaining Overage after these first two reductions are applied.

Front 212

How is reduction due to an Overage applied to individual players?

VII(12)(b)(2)

Back 212

Compensation is reduced by each player's respective Individual Compensation Adjustment Amount

Front 213

General rule for calculating Designated Share

VII(12)(b)(3)

Back 213

50% of BRI

Front 214

Calculating Designated Share if Actual BRI exceeds forecasted BRI for that Cap Year


VII(12)(b)(3)

Back 214

Designated Share =
(50% of Forecasted BRI) + (60.5%(BRI - Forecasted BRI))

Salary Cap Year Forecasted BRI
2012-13 $4.308 billion
2013-14 $4.481 billion
2014-15 $4.660 billion
2015-16 $4.870 billion
2016-17 $5.089 billion
2017-18 $5.318 billion
2018-19 $5.557 billion
2019-20 $5.807 billion
2020-21 $6.069 billion

Front 215

Calculating Designated Share if Actual BRI is less than forecasted BRI for that Cap Year


VII(12)(b)(3)

Back 215

Designated Share =
(50% of Forecasted BRI) - (60.5%(Forecasted BRI - BRI))

Salary Cap Year Forecasted BRI
2012-13 $4.308 billion
2013-14 $4.481 billion
2014-15 $4.660 billion
2015-16 $4.870 billion
2016-17 $5.089 billion
2017-18 $5.318 billion
2018-19 $5.557 billion
2019-20 $5.807 billion
2020-21 $6.069 billion

Front 216

Outer bounds of Designated Share

VII(12)(b)(3)

Back 216

Designated Share cannot be less than 49% of BRI or greater than 51% of BRI, regardless of the difference between BRI and Forecasted BRI.

Salary Cap Year Forecasted BRI
2012-13 $4.308 billion
2013-14 $4.481 billion
2014-15 $4.660 billion
2015-16 $4.870 billion
2016-17 $5.089 billion
2017-18 $5.318 billion
2018-19 $5.557 billion
2019-20 $5.807 billion
2020-21 $6.069 billion

Front 217

Basic Escrow Procedure

VII(12)(c)(1)

Back 217

Compensation payable to each Adjustment Player is reduced by the Escrow Amount, and that amount is deposited with the Escrow Agent.

Note: The Interim Audit Reports and Audit Reports have to include all of the information required to determine the Escrow calculations. The requirements for the Audit Report with respect to Escrow are enumerated in VII(12)(d)(3-4), but are not listed as part of this project.

Front 218

Date of Escrow Deductions

VII(12)(c)(2, 4)

Back 218

1. Base Escrow Amount collected in 12 equal installments on each Deduction Date.
2. Performance Bonus Escrow Amount collected in one installment on Performance Bonus Deduction date.
3. Trade Bonus Escrow Amount collected in one installment on Trade Bonus Deduction Date

Front 219

Procedure for deducting and depositing Escrow Amounts

VII(12)(c)(3)

Back 219

1. NBA prepares a schedule of Escrow Amounts on or before Nov. 8.
2. Teams have 3 business days after applicable Deduction Date to deposit Escrow Amount with the Escrow Agent.
2. Schedule is periodically updated thereafter to show Escrow Amounts for new player contracts and to make adjustments resulting from changes, (e.g. earned Performance Bonuses, waivers, Renegotiations, etc.)

Note: In the event these procedures somehow don't result in the full Escrow Amount being delivered with respect to any player, the NBA and NBAPA have to "agree on such supplemental measures as are necessary to effectuate the deduction."

Front 220

Player's Association challenge to Escrow Schedules

VII(12)(c)(5)

Back 220

Player's Association may initiate an arbitration before the system Arbitrator within 7 days of receiving an Escrow Schedule or within 7 days of an event that the PA believes warrants a change. But the Escrow Amounts continue to get deducted until there is a final decision.

Front 221

Procedure if there is a determination too much was taken away from player in Escrow

VII(12)(c)(6)

Back 221

The sole remedy is to modify the player's future deductions until the amount wrongly taken away is offset.

Only exception is if reducing future deductions wouldn't allow enough to offset the amount already taken away (i.e. if player has already been cut or contract expires). In that case the parties instruct the Escrow Agent to pay the player as soon as possible, with interest.

Front 222

Reconciliation Procedures: What happens when there is an Overage?

VII(12)(d)(1)

Back 222

NBA shall be entitled to receive the Individual Compensation Adjustment Amount, up to the Escrow Amount.

Note: If there is no Overage, each player receives the full Escrow Amount.

Note: Players or the NBA is entitled to any interest on the Escrow Amount. VII(12)(d)(2)

Front 223

Schedule for Payment of Escrow Amounts

VII(12)(d)(5)

Back 223

NBA and/or PA must deliver completed Notice (created by Accountants which sets out Escrow payments and interest earned to be distributed to NBA and the players) to the Escrow Agent within the earlier of 7 days after completion of the Audit Report or the Audit Report Challenge Period. The Escrow Agent then makes the payments as soon as possible.

Front 224

Aggregate Compensation Adjustment Amount Shortfalls

VII(12)(e)(1)

Back 224

If there is an Aggregate Compensation Adjustment Amount Shortfall (i.e. if the NBA somehow receives less from the Escrow Agent than it is supposed to)
then all player contracts the following year are amended so that the aggregate compensation paid to all players is reduced by the amount of the shortfall.

Front 225

Calculating Individual Shortfall Adjustment Amount

VII(12)(e)(2)

Back 225

(Aggregate Compensation Adjustment Amount Shortfall for prior year) * (that player's Salary)/(All player Salaries)

Note: For calculating this number, minimum salaried players' Salary includes the amount contributed by the NBA.

Front 226

When and how is Individual Shortfall Adjustment Amount deducted?

VII(12)(e)(3)

Back 226

In 4 equal installments from each of the player's first 4 semi-monthly payment dates.

Front 227

Calculation of Tax for 2013-14 and onward

VII(12)(f)(1)(ii)

Back 227

Incremental Team
Salary Above
Tax Level Tax Rate for Increment
$0 – $4,999,999 $1.50-for-$1
$5,000,000 – $9,999,999 $1.75-for-$1
$10,000,000 – $14,999,999 $2.50-for-$1
$15,000,000 – $19,999,999 $3.25-for-$1
$20,000,000 and over Tax rates increase by
$0.50 for each additional
$5,000,000 increment
above the Tax Level (e.g.,
for Team Salary
$20,000,000 to
$24,999,999 above the
Tax Level, the Tax rate is
$3.75-for-$1 for that increment)

E.g.: In 2013-14, a Team with Team Salary that exceeds the Tax Level by $11 million would pay a tax of $18.75 million (i.e., $5 million times $1.50, plus $5 million times $1.75, plus $1 million times $2.50).

Front 228

Repeater Tax Trigger and Brackets for 2014-15

VII(12)(f)(1)(iii)

Back 228

If a team exceeded the Tax in all 3 of the previous years (2011-12 thru 2013-14), then their Tax is increased by $1 for each tax bracket over the non-repeater Tax.

Incremental Team
Salary Above
Tax Level Tax Rate for Increment
$0 – $4,999,999 $2.50-for-$1
$5,000,000 – $9,999,999 $2.75-for-$1
$10,000,000 – $14,999,999 $3.50-for-$1
$15,000,000 – $19,999,999 $4.25-for-$1
$20,000,000 and over Tax rates increase by
$0.50 for each additional $5,000,000 increment
above the Tax Level (e.g.,for Team Salary
$20,000,000 to $24,999,999 above the Tax Level, the Tax rate is $4.75-for-$1 for that increment).

Front 229

Repeater Tax Trigger and Brackets for 2015-16 and beyond

VII(12)(f)(1)(iv)

Back 229

If a team exceeded the Tax in 3 of the 4 previous years (2011-12 thru 2014-15), then their Tax is increased by $1 for each tax bracket over the non-repeater Tax.

Incremental Team
Salary Above
Tax Level Tax Rate for Increment
$0 – $4,999,999 $2.50-for-$1
$5,000,000 – $9,999,999 $2.75-for-$1
$10,000,000 – $14,999,999 $3.50-for-$1
$15,000,000 – $19,999,999 $4.25-for-$1
$20,000,000 and over Tax rates increase by
$0.50 for each additional $5,000,000 increment
above the Tax Level (e.g.,for Team Salary
$20,000,000 to $24,999,999 above the Tax Level, the Tax rate is $4.75-for-$1 for that increment).

Front 230

How and when is Tax number computed?

VII(12)(f)(2)

Back 230

Tax is computed based on roster as of the start of the last regular season game. This computation includes:

1. Team Salary
2. All Unlikely Bonuses earned, less Likely Bonuses not earned.
3. Any trade bonus for players attributable to Team Salary.
4. Amounts added to Team Salary following the start of the last regular season game due to a grievance

Note: For luxury tax purposes, all free agent contracts for rookies or first year players count as the greater of the contract amount or the Minimum for players with 2 years of service. The point is to prevent teams from dumping veterans for younger players for purposes of avoiding the tax.

Front 231

Timing of Tax payment to the NBA

VII(12)(f)(3)

Back 231

No later than 10 business days following the earlier of (i) the completion of the Audit Report for the prior Salary Cap Year, or (ii) the completion of the Audit Report Challenge Period.

Front 232

Designation of Amnesty Player

VII(12)(f)(5)

Back 232

1. Each team can designate 1 Amnesty Player over the term of the 2011 CBA.
2. Amnesty Player's salary is excluded from Team Salary for the remaining term of his contract.
3. Only players whose contracts predate the 2011 CBA and remained continuously on the team's roster since are eligible. (Exception: Players who were waived but are still being paid guaranteed salary owed by the team.)

Front 233

NBA use of Escrow Proceeds

VII(12)(g)(1)

Back 233

Are the "exclusive property of the NBA." Use or disposition of such funds is subject to only two limitations:
1. NBA may elect to distribute as much as it wants to the teams, but it has to be in equal shares.
2. Or used for "League purposes" (defined below)

Front 234

NBA use of Tax proceeds

VII(12)(g)(2)

Back 234

1. NBA can elect to distribute up to 50% of the amounts based in whole or in part on the fact that they did not owe a Tax for that year. E.g., could distribute 50% of such amounts in equal shares to all non-taxpayers.
2. Remaining amounts shall be used for "League purposes" (defined below)

Front 235

Definition of "League Purposes" for which Escrow or Tax proceeds may be used

VII(12)(g)(3)

Back 235

"League purpose" is "any purpose, including, but not limited to":
1. distribution to one or more teams, although that distribution cannot be related to what the team's salary is. This is to avoid teams trying to keep salary low in order to collect more money from the league (aside from via not being in the Tax).

More specifically, distributions under this section can include a "team assistance plan" in which money is distributed based on profit, loss, or expense. However, each team receiving assistance must be assumed to have a Team Salary no less than the league average in computing profit, loss, or expense. The plan also can't base the amount of a team's assistance on the amount of Team Salary or whether the team pays the Tax.

Front 236

Agreement to change CBA if BRI substantially decreases from the previous year

VII(12)(h)

Back 236

If this substantial BRI decrease causes players to receive more than the Designated Share, the parties agree to "negotiate in good faith to agree upon an adjustment to the provisions of this agreement in a manner reasonably satisfactory to the parties to address the issue.

Note: It's hard to say that this ultimately means anything. It enables the owners to force the players to at least negotiate, and maybe to offer at least some concessions to establish negotiating in "good faith," but this is very wishy washy language.

Front 237

Effect of Escrow arrangements on computation of player's Salary

VII(12)(i)(1)

Back 237

The player's Salary still is computed at the amount he receives before the Escrow Amount is taken out for all other purposes.

Front 238

Effect of Escrow arrangements on computation of Salary for minimum-salaried players

VII(12)(i)(3)

Back 238

Is still the LESSER of:
1. The applicable Minimum Player Salary or;
2. The portion of the Minimum Player Salary not paid by the league.

Front 239

Effect of player suspension on Escrow and Tax amounts

VII(12)(i)(4)(i)

Back 239

Only if suspended by the NBA, the player's Salary for purposes of calculating Escrow and Tax amounts is reduced by 50% of the compensation the suspended player has lost.

For all other purposes, the player's Salary is unchanged by a suspension by the NBA OR his Team.

Note: Without this rule, teams could come up with reasons to suspend a player to reduce their cap number or luxury tax payment. This takes that out of the Teams' control.

Front 240

Refund of Compensation taken due to Overage when player is suspended

VII(12)(i)(4)(ii)

Back 240

When player loses part of his Compensation as a result of suspension imposed by NBA or Team and his Compensation is later reduced because of an Overage (VII(12)(b)(1), he's entitled to a pro-rata refund of the Individual Compensation Adjustment Amount based on the fraction of his Compensation that was forfeited due to suspension.

Front 241

What happens if the Overage exceeds Aggregate Salaries and Benefits Adjustment Amount plus the Additional Benefit Amount?

VII(12)(i)(5)

Back 241

The NBA shall not be entitled to reduce player Compensation in such Salary Cap Year or any
subsequent Salary Cap Year so as to recover any amounts in excess of the Aggregate Compensation Adjustment Amount.

Front 242

Amnesty of Player

VII(12)(j)(1)

Back 242

Team may designate an Amnesty Player by providing written notice to the NBA during an Amnesty Designation Period.

If he is still on the roster, this must be accompanied by a request for waivers. The player's Salary is excluded from Team Salary immediately upon being amnestied.

Front 243

When is Amnesty Designation Period?

VII(12)(j)(ii)

Back 243

With respect to the 2012-13 through 2015-16 Salary Cap
Years, the seven (7)-day period beginning on the day
following the last day of the Moratorium Period for each such Salary Cap Year.

Front 244

Re-signing or re-acquisition of Amnesty Players by waiving team

VII(12)(j)(2)

Back 244

Team may not re-sign or re-acquire an Amnesty Player prior to the end of the last Season of the player’s Contract (including any unprotected years or Option Year)

Front 245

Amnesty Waiver Procedure by which players are claimed after being amnestied

VII(12)(j)(e)

Back 245

1. Same waiver period as normal (48 hours)
2. Any team may submit a Full Waiver Claim or Partial Waiver Claim. (See next cards)
3. Full waiver claim is for the full value of the remaining term of the contract. (See next cards).
4. Partial waiver claim is a bid of some portion of the remaining salary on the contract. Whoever has largest bid gets the player. (See next cards)
5. If nobody submits a claim within 48 hours, the player becomes a free agent.

Front 246

Amnesty Waiver Procedure: Full Waiver Claim

VII(12)(j)(ii)

Back 246

Works the same as a regular waiver claim. To submit a full waiver claim, team must:
1) Be far enough under the salary cap to fit the player's entire salary.
2) Have a Disabled Player exception for at least the player's salary AND the player is on the last season of his contract.
3) The team has a trade exception for at least the player's salary.

If more than one team submits a full waiver claim, then whoever has higher waiver priority gets the player.

Note: Full waiver claims on amnestied players are difficult to envision (it's never happened), because the reason he's being amnestied is because he's so overpaid to begin with. Teams would want to use TPE or cap space on a more cost-efficient contract.

Front 247

Amnesty Waiver Procedure: Remaining Protected Years and Remaining Unprotected Years

VII(12)(j)(ii)

Back 247

A “Remaining Protected Year” means any
remaining year of the Contract that contains any guaranteed salary (that is not dependent on player exercising an option)

Any remaining years of the Contract that are not
Remaining Protected Years (i.e. have no guaranteed salary) are “Remaining Unprotected Years.”

Front 248

Amnesty Waiver Procedure: Partial Waiver Claim Bid Amount

VII(12)(j)(ii)

Back 248

A Partial Waiver Claim is a bid for a portion of the value of the remaining term of the contract. (rounded to the nearest dollar)

The minimum bid is the GREATER of 1) Minimum Salary for all of the Remaining Protected Years or 2) the sum of all non-guaranteed salary in protected years.

The bid must be less than the total of the full Base Compensation provided for the Remaining Protected Years (whether guaranteed or not).

Note: The bid must be more than any nonguaranteed salary provided in the Remaining Protected Years. (Some Remaining Protected Years may include some nonguaranteed salary.)

Front 249

Amnesty Waiver Procedure: Partial Waiver Claim Team Salary Requirements

VII(12)(j)(iii)

Back 249

Must have Team Salary below the Salary Cap and Room equal to the Claiming Team Base Compensation Obligation (i.e., the amount of the salary they'd have to pay) for the first year, plus any Likely Bonuses applicable to the first year.

See below for calculation of Claiming Team Base Compensation Obligation.

Front 250

Amnesty Waiver Procedure: Creating Room for Partial Waiver Claim

VII(12)(j)(iii)

Back 250

Room can only be created by renouncing or waiving players, not by trades. Those enabling transactions must occur immediately upon the team being awarded the player. A team doesn't need to have Room to make a bid, just has to be able to make Room if it wins the auction.

Front 251

Amnesty Waiver Procedure: Calculation of Claiming Team Base Compensation Obligation

VII(12)(j)(vi)(A-B)

Back 251

Total dollar amount of the claim is allocated over the Remaining Protected Years in proportion to the Base Compensation amounts provided for each year.

Claiming Team Base Compensation Obligation plus Likely Bonuses are immediately included in Team Salary once team wins the auction.

(e.g., if the player has two (2) years remaining on hisContract with a $10 million fully-protected BaseCompensation in year one and an $11 million fifty
percent (50%) protected Base Compensation in
year two and the winning Partial Waiver Claim was
for $6 million, the Claiming Team shall be
responsible for $2.86 million of the player’s Base
Compensation in year one (10/21 x 6) and $3.14 million in year two 11/21 x 6)

Front 252

Trade of Claimed Amnesty Player

VII(12)(j)(vi)(C)

Back 252

Can't be done until the following July 1.

Front 253

Who actually pays an amnestied player?

VII(12)(j)(vi)(D)

Back 253

The Claiming Team makes all payments to the player (and pays all related payroll taxes), but the waiving team has to pay the Claiming Team on or before each applicable pay date.

QUESTION: DOES WAIVING TEAM ALSO REIMBURSE CLAIMING TEAM FOR PAYROLL TAXES? DOESN'T SAY.

Front 254

Amnesty Procedure: Who pays the player if he is waived by the Claiming Team?

VII(12)(j)(vii)(A-B)

Back 254

A. If entirety of Remaining Protected Years are guaranteed, then no change from if he weren't waived. Same if there are no Remaining Protected Years.

B. If the Contract contains partial protection in 1 or more of the Remaining Protected Years, then:
1. For each year, Claiming Team Base Compensation Obligation is reduced by ((CTBCO)/(Total Base Compensation)) x (Unprotected Base Compensation for that year). This is called Adjusted CTBCO
2. Waiving Team Base Compensation Obligation is reduced by ((WTBCO/(Total Base Compensation)) x (Unprotected Base Compensation for that year).
3. Any contract amounts triggered after the amnesty (i.e., player or team exercises an option) are the sole responsibility of the claiming team.

Front 255

Amnesty Procedure: If twice-waived Amnesty Player is claimed again on waivers.

VII(12)(j)(viii)

Back 255

Team that is awarded the Contract becomes the Claiming Team for the purposes of this Section 12(j) (and, accordingly, must have room (or a Traded Player Exception) in an amount equal to at least
the Claiming Team Base Compensation Obligation plus any Likely Bonuses applicable to the then-current Salary Cap Year).