What to know about NBA free agency 2022: Exceptions, key terms and more

It’s that time of year when the NBA world gets flipped on its head. On Thursday, NBA free agency officially opens up, and we’re going to have a flurry of moves. Some of these will be free-agency signings. Some will be trades. Some will be sign-and-trades. The list of free agents isn’t as eye-popping as we’ve seen in years past, but the potential for chaos is there.

Free agency can be confusing and all over the place, so you might need some clarity. As I did with the NBA Draft Lottery and the NBA Draft, I’ll pose some of those questions you may have and then answer them. It’s like talking to yourself, but with the excuse/guise of it being for work. (That’s what happens when you work from home for 13 years and decide talking to the dog is too weird to do all the time.)

Let’s answer some questions after we make them up!

So what is free agency?

The dictionary definition of “free agency” is “a sports player who is not bound by a contract and so is eligible to join any team.” That sounds pretty accurate. Essentially, all players have contracts, and the Collective Bargaining Agreement of the NBA has limits on how long those contracts are allowed to last.

It wasn’t always that way. For example: Magic Johnson, as a player, had a 25-year, $25 million contract with the Los Angeles Lakers. That deal would have expired in 2009. (It also would have grossly underpaid him soon into that deal, but that’s a conversation for another day.) NBA free agents in 2022 can sign deals for as little as one year or as many as five if they’re re-signing with their current team. If they want to leave their incumbent team, their potential contract maxes out at four years.

Player deals can range from the minimum salary (anywhere from just above $1 million to more than $2.8 million, depending on longevity in the league) to the maximum salary. Projected maximum salaries for players with six years of time in the NBA or less start at 25 percent of the salary cap, which is a projected $30.5 million this year. For players with seven to nine years in the NBA, that maximum salary starts at 30 percent of the salary cap (a projected $36.6 million). For players with 10 years or more in the league, that maximum salary starts for next season starts at 35 percent of the salary cap (a projected $42.7 million).

Players can also sign for anything in between those minimum and maximum deals. One other note: Players re-signing with their incumbent teams can get raises up to eight percent annually from the previous season’s salary number, while players signing with a whole new team are only entitled to a maximum of 5 percent raises annually.

So when is free agency?

It legally — and I cannot stress the word legally enough — begins at 6 p.m. on June 30. Nothing, and I repeat, nothing, is allowed to happen prior to that. We’ll discuss that more in a bit.

How can I watch free agency?

You don’t watch it. It watches you. To be more precise, NBA free agency isn’t a television show, although it seems like one sometimes. It’s something you check out on Twitter and on The Athletic’s free-agency live blog. You want to make sure you set Twitter notifications for our Shams Charania, Sam Amick and all of your favorite NBA reporters for breaking news. Then, rush to Twitter, say something was an overpay (or underpay, or brilliant deal, or all three), wait for someone with a Twitter handle that consists of a first name and 10 number digits to throw a clown emoji at you while claiming you don’t watch games while hoping you don’t see the favorite professional and collegiate sports allegiances listed in their bio.

OK, so anybody can just sign with any team?

Yes and no. Teams can’t just throw any amount of money they want at a bunch of available free agents and sign all of them, no matter the photoshops Lakers and Knicks fans post on the internet.

The NBA has a soft salary cap. That means there is a limit teams can spend on players, unless they’re re-signing eligible players already on their roster. In that case, teams can pay those players an amount of money that puts them over the soft cap. Eventually, there is a luxury tax that is far beyond the salary cap, and exceeding it forces teams to pay even more money as a penalty for already spending so much money.

If a team can’t fit a new player under the soft salary cap, it must sign them using a handful of possible salary-cap exceptions (midlevel, bi-annual, etc.) that are available to varying levels depending on how much money it has already spent on player salaries. That often means the player must take a pay cut from what they might have anticipated they’d get. These contract figures are also set percentages that depend on the overall salary cap level and player salaries as a whole.

For example, let’s say Kyrie Irving didn’t exercise his $37 million player option with the Nets for the 2022-23 season. Let’s say he instead wanted to sign with, hypothetically, the New Orleans Pelicans or Los Angeles Lakers. The Lakers’ team salary puts them over the luxury-tax line, so their available midlevel exception is worth roughly $6 million for next season. That’s the most lucrative contract they could offer him, no matter how long it is. The Pelicans, on the other hand, are not a luxury-tax-paying team, but they are over the salary cap. Their available midlevel exception could’ve paid Irving roughly $10 million for next season. There’s a big difference between those options and $37 million. No wonder he opted to exercise that Nets player option. Otherwise, those teams over the cap have to sign players to minimum deals — outside of some rare, complex exceptions.

Teams under the soft cap can sign players for as much available space as they have, as long as they don’t exceed the maximum salary for that specific player. Unrestricted free agents can sign with anybody in theory. Restricted free agents have a separate set of rules if they want to exit their incumbent team.

Deandre' Ayton is the NBA's most prominent restricted free agent this summer.

Deandre’ Ayton is the NBA’s most prominent restricted free agent this summer. (Mark J. Rebilas / USA Today)

Wait, free agency is restricted from some players? Make it make sense.

Restricted free agency can be frustrating! Outside of a couple edge cases, first-round picks finishing their rookie-scale contracts will be restricted free agents. Those initial rookie-scale deals last up to the first four years of their career and are valued based on which pick they were in the first round of the draft. Teams then can tender a “qualifying offer” to maintain these players’ free-agent rights. (The value of the qualifying offer is tied to the raises allowed in contracts and percentage of the salary cap allotted to rookie scales.)

If the team tenders a qualifying offer, the player is a restricted free agent. Their options are to negotiate a new contract with their incumbent team, sign an offer sheet with a new team, or accept a one-year deal with their current for the value of the qualifying offer and become an unrestricted free agent the following offseason. Players who choose the last of those three options gain full free-agency freedom a lot sooner, but risk getting injured and having that affect future earnings. If they sign an offer sheet with a new team, their incumbent team has two days to decide if they want to match it. The player has no choice but to stay in that scenario. If the incumbent team decides not to match the deal, the player gets to play with their new team on that contract. The only way to avoid that two-day waiting period is for the two teams to orchestrate a sign-and-trade prior to the player signing an offer sheet.

Let’s say, for example, that prominent 2022 restricted free agent Deandre Ayton signs a maximum-contract offer sheet with the Detroit Pistons. Technically, the Phoenix Suns will have two days to decide if that’s too rich for Robert Sarver’s blood. Match, and Ayton stays in Phoenix, though he’d probably be miserable based on the way his season ended. But at least he’d be making the maximum contract the Suns refused to offer him in extension talks last offseason. If the Suns don’t match, Ayton gets to play next to Cade Cunningham and Jaden Ivey for the next four years.

Dumb question, but unrestricted free agents can just sign with anybody?

Yes, it’s true. It just depends on how much the team is willing to give them. And how much of a potential pay cut they’re willing to take if the team they want to play for is over the cap. You can sign with any team that is willing to sign you, but not for any amount of money you want. It all has to fit under the cap or the exceptions or the rules.

Who determines how much players make for their salary?

As mentioned before, the minimums, exceptions and maximum contracts are all set to a percentage of the salary cap for the league. That salary cap is determined by the basketball-related income from the previous season. From there, team executives and ownership groups negotiate with the players and their agents/representatives. Some people believe LeBron James is in both of those groups of people, but he’s not. At least, I’m pretty sure he’s not…

And these negotiations begin on Thursday?

Here’s the funny little dirty not-so-secret about free agency: These deals are usually negotiated and determined weeks or even months in advance. But the league doesn’t like to let it be known that these conversations happen early, because teams are technically not allowed to negotiate with another team’s player until they are officially a free agent. That’s called tampering. And tampering is bad.

The official punishments for tampering can include losing future draft picks, which is what happened to Milwaukee and Miami with their respective second-round picks this season. Theoretically, it can lead to the contract being voided if there’s a sinister under-the-table agreement or if the courting process is especially egregious. The league rarely enforces this stuff. Why? Are you going to pull over every car on the road for going a couple miles over the speed limit?

A super fast back-and-forth didn’t happen between the negotiating parties to have the agreement happen within seconds of free agency opening. In practice, most of those negotiations between the team and the players’ representation will have started well before June 30. But not all deals — or even most deals — are fully agreed upon the minute free agency opens. Sometimes, they’re contingent on other players signing first before their options open up. Free agency is thus like a domino falling and setting off a cascading set of dominoes.

Dallas' Jalen Brunson is one sign-and-trade candidate this summer.

Dallas’ Jalen Brunson is one sign-and-trade candidate this summer. (Kevin Jairaj / USA Today)

You mentioned a sign-and-trade earlier. Can you explain that to me?

It’s pretty self-explanatory. All those rules above that dictate how teams can sign players? They can be circumvented if the incumbent team can work out a deal with another team in which they sign the contract for that free agent, then trade him to his new team for compensation. The players’ new deal must either fit under the available cap room for their new team, or they can be traded for other players they have under contract. If both teams are over the cap, those contracts must add up to within 125-175 percent of the free agent’s new deal, just as is the case with any trade.

For example: Let’s say, hypothetically, Jalen Brunson wants to leave the Dallas Mavericks for the New York Knicks. Let’s say the Knicks, hypothetically of course, cannot create the cap room necessary to acquire all of Brunson’s desired new starting salary, hypothetically because they gave Evan Fournier a four-year deal for $17 million a season last summer. They can still orchestrate a sign-and-trade for Brunson to join the Knicks with players and/or draft compensation headed back to Dallas, so long as the money going out creates the requisite room to fit Brunson’s new salary coming in.

By the way, remember that soft cap the NBA has? Once a team executes a sign-and-trade to acquire a player, it becomes hard-capped. Seems confusing, right? It is. But really all you need to know is if a team executes a sign-and-trade, it gets hard-capped a few million above the luxury tax. The team absolutely cannot exceed that hard cap number, no matter what.

What are these Bird rights I’m always hearing about?

Remember Larry Bird? He was awesome, right? Check out his highlights on the internet. The man was incredible. When the NBA instituted the salary cap in 1983, Bird was set to become a free agent shortly after. It meant the Boston Celtics were possibly going to struggle to retain their own superstar free agent. So to help out, they put in what’s technically called the Qualifying Veteran Free Agent Exception rule.

We now call those “Bird rights.” It has nothing to do with Bird law, no matter what Charlie Kelly might tell you. Bird rights mean you can go over the salary cap to re-sign a player on your own team, but there are a couple of stipulations. Full Bird rights go into effect when a player has played for a team for three consecutive seasons without leaving in free agency. Trades don’t apply here. In those situations, you can re-sign a player on your own team up to the max contract.

Then there are early Bird rights, which means the player has been there for only two consecutive seasons. That means they can re-sign with a team for 175 percent of their previous salary or 104.5 percent of the average league salary — whichever is higher. That way minimum contract players don’t get hit here. And then non-Bird rights are for players who spend only a single season with a team. You can pay that player upwards of 120 percent of their previous salary.

Who are the big free agents, both restricted and unrestricted?

I’m going to list out some expected free agents for both unrestricted and restricted options.

Some potentially significant unrestricted free agents:

Some potentially significant restricted free agents:

If you’re thinking I didn’t list a specific player because I’m biased and hate them and your favorite team, you’re 100 percent correct. John Hollinger has a great breakdown of available free agents.

Are those players expected to switch teams?

Some are! Many expect the Knicks to be hot after Brunson. Ayton is not expected to return to Phoenix, but you never know. Miles Bridges removed Hornets team affiliation from social media accounts, which means … well I’m never sure what that means. He might be back! He might not!

Beal and LaVine are expected to re-sign with their respective teams for five-year max deals. The rest is a crapshoot!

Will free agency be exciting?

Let’s hope so!

There aren’t a ton of league-changing free agents available like we’ve seen in years past, but we could see the free agency time be used for franchise-changing trades. That’s the beauty of free agency. Anything can happen!

As long as it’s within the strict parameters of the CBA.

(Top photo of Mavericks owner Mark Cuban: Jerome Miron / USA Today)

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