NBA Free Agency Explained

NBA Free Agency happens every summer and each year the excitement and anticipation grows to see who will end up where. Here is the guide to understanding NBA Free Agency.

It should be said that NBA Players not currently playing for a team are free agents all year round and can be picked up by a team at any point. This article will cover the summer free agency period however.

There are two types of free agency under the NBA’s current CBA: unrestricted and restricted free agents.

Unrestricted

An unrestricted free agent is simple; they can sign for any team that has offered them a contract. See perhaps the most famous NBA Free Agency moment below as in 2010 LeBron James had a TV special to reveal his free agency decision.

Restricted

A restricted free agent is free to hear any offers and sign an offer sheet with them, but his current team has the right to match that offer sheet and re-sign the player. An offer sheet is a contract offer of at least two years made by another team to the free agent. The players current team has three days to respond to the offer sheet or they lose the player.

For first round draft picks restricted free agency is only allowed after a team exercises their fourth year option and makes a qualifying offer at the rookie scale amount after the fourth year is completed (a rookie contract for first rounders has two guaranteed years, with the final two being team options). For any other player to be a restricted free agent they must have played at least three years in the NBA and his team made a qualifying offer 125% more than what he made the last season of his contract or the minimum salary and $200,000.

There is a limit on what teams can offer to an unrestricted free agent with under three years experience. The maximum for the first year of an offer sheet is the mid-level exception ($5.3 million for teams without cap room). The second year of this contract can only rise a maximum of 4.5%, with the third year being limited to what a team has remaining in their cap space. The contract can only rise in the third year if the team has offered the max for the previous two years.

July Moratorium 

Players enter free agency on July 1. For the first 7-14 days (depending on what the NBA decides should be the length of the moratorium) of free agency teams can speak to free agents and begin to negotiate contracts, but no players can be signed and no trades can be conducted. The upcoming years salary cap is not released until the end of this period after an audit. Some contracts are allowed during this period, these are rookie scale contracts to first round picks and teams may sign players for one to two years for the leagues minimum salary. Restricted free agents can also accept qualifying offers from their previous team. Teams are also restricted on commenting on deals during this time. Contracts can be signed as soon as the moratorium ends.

Sign and Trades

Sign and trade agreements are often used during NBA free agency and are seen as mutually beneficial for players and teams that are parting ways anyway. They allow the teams losing a player to get something back in return whilst the player often gets a small salary bump because of the deal. Simply put the player re-signs with their previous team and is immediately traded to the team they wanted to sign with, for something in return.

Check out the 2015 free agent class here.

Next: NBA Salary Cap Explained

If you have any further questions let me know in the comments below or email/tweet me from the links on the contact page.

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