As has been made abundantly obvious by the development of various super teams over recent league history, the NBA’s Collective Bargaining Agreement (CBA) doesn’t include a hard cap.
Through exceptions, minimum contracts and other means, organizations are allowed to circumvent the salary cap to put their rosters together. If that weren’t the case, it would be impossible for a team like, say, the modern-day Golden State Warriors to exist.
One of the other methods teams use to get around the cap is through Bird Rights. Bird Rights, also known as the Larry Bird exception, came into existence in the 1980’s and can be explained as follows, via ThoughtCo.:
“In 1983, the NBA’s collective bargaining agreement (CBA) called for the league’s first-ever salary cap, which would limit the cash amount teams could spend on players’ salaries. Rather than institute a ‘hard cap,’ which would strictly prohibit teams from going above a certain salary limit, the NBA chose a “soft cap” with a handful of exceptions. With the contract of Boston Celtics forward Larry Bird expiring at the end of the 1983 season, giving the budding star his first chance to test free agency, the most notable exception to this salary cap was the Qualifying Veterans Free Agent Exception. This ‘Bird’ Exception, as it came to be known, gave free agents Bird Rights to incentivize negotiating with their existing team.”
As is the case with every exception in the CBA, there are different kinds of Bird Rights. Here is how each can be broken down:
- Full Bird Rights
- A team gets a player’s full Bird Rights if they spend three years with their team without leaving in free agency.
- It doesn’t have to be on a three-year deal. This applies to players on a three-year deal, players on a two-year deal followed by a one-year deal or players on three consecutive one-year deals.
- Early Bird Rights
- A team gets a player’s Early Bird Rights if he spends two years with a team without leaving in free agency.
- Non-Bird Rights
- A team gets a player’s non-Bird Rights if he spends a single year with the team.
From exact financial terms, non-Bird Rights allow teams to pay players up to 120 percent of his previous salary in order to re-sign him. For example, if a player is coming off a one-year deal that paid him $10 million, the team he was on can go over the cap to re-sign him to a contract where the first year is worth up to $12 million.
Furthermore, Early Bird Rights are similar, but they allow teams to pay players either 175 percent of his previous salary or 104.5 percent of the average league salary, whichever is higher. (The latter is in place to protect players coming off minimum deals.) Hence, in the former scenario, a player coming off a two-year deal where each year was worth $10 million can be re-signed to a contract where the first year is worth up to $17.5 million, i.e. 175 percent of the previous salary, if the team wants to go over the cap when re-signing said player.
And finally, for Full Bird Rights, the only limit in place is the max salary the player can receive, be it 25 percent of the cap, 30 percent of the cap or 35 percent of the cap. For a recent example, just observe how star Denver Nuggets big man Nikola Jokic went from earning the minimum in 2017-18 ($1.5 million) to earning the max in 2018-19 ($25.5 million).
As far as trades and the transferal of Bird Rights go, if a player has been with a team for three complete years and he gets traded, his new team will acquire his Bird Rights.
However, if a player has been on a team for two years and re-signs for a third year, they automatically inherit a no-trade clause on that third season. Why? Because it gives players the right to have to approve a trade which would cause them to lose the full Bird Rights that were about to be available to them.
Miami Heat sharpshooter Wayne Ellington can be used an example. He spent 2016-17 and 2017-18 with the Heat before re-signing with Miami on a one-year deal for 2018-19. That gives him a no-trade clause for this upcoming season because if he gets dealt, he would go back to non-Bird Rights status since he technically wouldn’t be spending three full years with a single team (in this case, the Heat), which would hurt his future earning power.
Giving players facing that situation the right to approve or deny a trade is a way of protecting them and their wallets.
For the most part, the implementation of Bird Rights (and other methods) to give the NBA a soft salary cap can only be seen as a rousing success, since they allow players to make more money while also helping teams maintain a sense of continuity, thus giving us, the viewers, some of the most memorable dynasties – the ’80s Celtics and Lakers, and ’90s Chicago Bulls all immediately come to mind – in modern league history.