[NOTE: Portions of this piece previously appeared at Mid-Level Exceptional]
Article VII, Section 6(b) of the NBA’s Collective Bargaining Agreement details the rules on the “Veteran Free Agent Exception” more commonly known as Bird rights.
Bird rights (named after Larry Bird) are exceptions to the salary cap that allow teams to retain players, typically those who have spent continuous time on that team. However, Bird rights are only one way that franchises can retain their players- they may choose to use cap space or another exception instead. Bird rights are powerful because at their strongest they outpace the limitations of other team-building tools like the Mid-Level Exception, especially for over the cap franchises.
A Timeline of Bird Rights
After Year One:
After one season, the only option in terms of Bird rights are Non-Bird, which are a version of Bird rights despite the name. If a team uses Non-Bird rights to retain their own free agent, they can pay him up to the greater of 120 percent of his salary in the previous season, 120% of the minimum salary or the amount needed to tender a qualifying offer if they are a Restricted Free Agent.
Contracts signed using the Non-Bird exception can run from one to four years with maximum raises or decreases of 5 percent, the same as signing away another team’s free agent or acquiring someone via sign-and-trade. These rules prevent a team over the cap from gaming the system by picking up a player on a cheap deal and then giving him a huge contract the next season. This limitation also explains why Brooklyn could not sign Shaun Livingston to the contract Golden State offered in the summer of 2014- his first year salary on the Golden State contract was more than 20 percent larger than his previous one with Brooklyn.
After Year Two:
Here we have two options: Non-Bird and Early Bird. Non-Bird would be exactly as described above.
Early Bird rights do a few things differently that make them interesting. First, they cannot be used for a one-year contract and option years do not count as years, so a LeBron Special of a one-year deal with a second season player option would not fly. The reason for this tightening comes from the additional financial flexibility offered to Early Bird free agents compared with Non-Bird players. Here, contracts can be larger - up to the greater of 175% of the player’s previous year’s salary or 104.5% of the “average salary” from the previous season. While not exactly the same, thinking the amount of the Non-Taxpayer Mid-Level Exception would not lead you too far astray when it comes to average salary. Early Bird free agents can also sign contracts with the 8% maximum raises and decreases like Full Bird rights.
The Atlanta Hawks recently suffered from the limitations of Early Bird rights because both Paul Millsap and DeMarre Carroll had only two seasons with the franchise. Since both expected and received huge pay increases, the Hawks could not fit either within 175% of their prior contract and thus had to use cap space. Since they did not have enough space for both players at the salaries they ended up losing Carroll without compensation.
After Year Three:
The mack daddy of them all: full Bird rights. Here, the maximum salary is that player’s individual maximum, not some percentage of what they made the previous season or the average salary. Full Bird rights allowed the Rockets to (theoretically, as it turned out) take Chandler Parsons from making just over the minimum to making his full maximum the next year even after they filled up their cap space, a path the Bucks followed this summer to add talent before giving Khris Middleton his lucrative new contract.
Along with the salary flexibility, full Bird rights also have the added benefit of being used for any length contract (1-5 years) and the maximum 8 percent raises and decreases.
Once a player accumulates full Bird rights with a team, over the cap teams typically use them to sign players due to the salary, duration, and raise flexibility they offer. The most common situation where a team does not use them on a player they want to bring back is when they need to renounce those rights (and the cap hold that comes with them) to use additional cap space and then re-sign the player to a smaller salary using cap space.
We had this happen last summer with Dirk Nowitzki and the Mavericks- his willingness to sign a cheaper deal and their desire to use cap space to sign Chandler Parsons led them to renounce Dirk’s rights before offering Parsons and then bringing Dirk back at a cheaper price than his hold. I should also note that even though renouncing a free agent like Dallas did here normally resets their Bird rights, re-signing that player using other means like cap space here brings those rights back as long as they return to the same team like Dirk did.
A Few Other Things to Know about Bird Rights:
- The player’s service must be continual with that team, at least in the NBA. For example, LeBron James’ time in Cleveland prior to his four years in Miami mean absolutely nothing in terms of his Bird rights when he came back. Time spent abroad can be more complicated and will be covered separately.
- The duration of the contracts does not matter in most circumstances, just the total amount of continual service. Let’s use LeBron again. It makes zero difference for his Bird rights if he signs one-year deals season to season or a single three-year contract.
- In a vast majority of cases, a player on the same contract will take tenure toward Bird rights with him even if traded. James Harden serves as an excellent example here. Even though Houston traded for Harden shortly before his extension deadline, they were still able to use Bird rights to sign him to an extension before he played a single regular season game for them. The most common case of a player losing Bird rights comes when they are on a one-year contract that will give them Bird rights (Early or Full) at the end of that season. In these circumstances, players actually have an extremely rare ability to block a trade because they would lose their Bird rights if the deal goes through.
- The first season of tenure with a team does not need to be a full one. If a player signs mid-season the first year and then sticks around for two more, that team has full Bird rights just like if he played the entire first season with them.
- Changing teams as a free agent resets the clock no matter what. Even if a player gets moved in a post-season, pre-moratorium trade, gets waived, and then scurries right back to his original team, they do not retain any Bird rights.
- The term “Bird rights” does not appear in the CBA at all- The Collective Bargaining Agreement uses the term “Qualifying Veteran Free Agent” for players with full Bird rights, “Non-Qualifying Veteran Free Agent” for Non-Bird players and “Early Qualifying Veteran Free Agent” for Early Bird players.