The NBA Offseason Dictionary Series: Bird Rights

 

Photo Taken By Sports Illustrated 

Bird rights is one of the most important and popular terms you will hear when talking about the NBA offseason. That is why it is the topic in this week's edition of “The NBA Offseason Dictionary Series.”

To define Bird rights, you must first understand the NBA salary cap. I defined this on: Explaining the NBA Luxury Tax. As a quick refresher, a salary cap is a limit on the amount of money a team can spend on players salaries in a single season

Bird rights is a salary cap exception in the NBA that allows teams to spend over the salary cap to re-sign their own players.

Origin of Bird rights:

The salary cap was first introduced in the NBA in 1983 and would take effect beginning in the 1984-1985 season. Initially, it was meant to be a hard cap, which means any team, with no exceptions, cannot spend over the salary cap. However, after further review, the league determined a soft cap was more suitable. A soft cap allows for teams to go over the salary cap in particular cases.

One specific scenario where a team can exceed the salary cap is legally referred to as the “Veteran Free Agent Exception,” which allows teams to exceed the salary cap in order to re-sign a player already on their roster.

The Boston Celtics were the first team to use the Veteran Free Agent Exception when they signed Larry Bird to a 7-year, $12 million contract in 1983. For context, during the inaugural season with a salary cap (1984-1985), each team's salary cap was set at $4.6 million. This specific exception became known as Bird rights because it was first applied to Larry Bird.

There is pushback regarding whether the Celtics technically used Bird rights when they signed Bird to his deal in 1983, as the salary cap did not come into effect until the following season. However, this term was coined back in 1983 and has stuck ever since.

Types of Bird rights: 

1. Full Bird rights:

Eligibility: A player must have completed three full consecutive seasons with the same team.

Benefits: Teams can re-sign their own free agents for up to the maximum salary (max salary is determined by how long a player has been in the league), regardless of the team's salary cap situation. They can offer contracts up to five years long with annual raises up to 8% of the first-year salary.

Example: On July 20th, 2024, Evan Mobley signed a five-year max extension worth $269 million to stay with the Cleveland Cavaliers. Mobley had just completed his third consecutive season with the Cavs, who selected him in the first round of the 2021 NBA Draft.

2. Early Bird rights:

Eligibility: A player must have completed two full consecutive seasons with the same team.

Benefits: Teams can re-sign their own free agents to contracts starting at up to 175% of their previous salary or 105% of the league average salary, whichever is larger. Contracts can be up to four years long, with annual raises up to 8% of the first-year salary.

Example: On July 12th, 2024, Jalen Brunson signed a four-year, $156.5 million contract to remain a New York Knick. Brunson has only completed two full seasons as a Knick. If Brunson held out for one more year, he would have been eligible for full Bird rights.

3. Non-Bird rights:

Eligibility: A player who has spent a single season or less with his team.

Benefits: Teams can re-sign their own free agents to contracts starting at up to 120% of their previous salary or 120% of the minimum salary, whichever is greater. Contracts can be up to four years long, with annual raises up to 8% of the first-year salary.

Example: On July 2nd, 2024, Kelly Oubre Jr. signed a 2-year, $16 million contract to stay with the Philadelphia 76ers, who initially signed him on a one-year deal back in September of 2023.

Advantages of having Bird rights:

Retention of Star Players: Bird Rights allow teams to keep their best players and maintain a highly competitive roster.

Salary Cap Flexibility: Crucial for teams that are already over the cap but still need to retain key players.

Team Stability: Bird rights promote team stability, which helps maintain and build team chemistry, a necessary factor for a contending team.

Competitive Advantage: Since they can offer more favorable contracts than other teams operating under the cap, teams can keep their valuable players from being taken by opposing teams.

Bottom Line

Bird Rights are a vital tool for NBA teams to manage their rosters effectively, retain talent, and stay competitive within the limits of a soft salary cap.

Do you think Bird rights is a fair salary cap exception? Would you modify any of the qualifications to be eligible for Bird rights? Comment below.