How Do NBA Basketball Players Get Paid?

One of the most lucrative professional sports, in terms of payment, has been, without a doubt, the NBA. The average salary has continued to increase as time has passed by. Like the NFL, these athletes earn lofty contracts that would make any typical 9-5 job look meager. However, there isn’t much information about how the players receive their pay along with the available contract options. Here’s some more insight into the interworkings of how NBA players are paid.

How do players get paid throughout the season?

Let’s get the most prominent question out of the way first as this where the bulk of the curiosity lies. Although it’s a professional sport like the NFL, the payment structure during the year varies from situation to situation in many instances.

It’s typical for players to get paid bi-weekly during the season, but they can negotiate a different payment schedule from that standard procedure. That was more so the case before the 2011 lockout that players would make their deals pay them even if they weren’t able to play.

There is a set type of payment option, but it’s something that players can diverge from if they choose to do so. For example: as the Business Insider pointed out, former Los Angeles Lakers star guard Kobe Bryant negotiated his deal to receive 80% of his $30.5 million salary in one lump sum at a certain point early in the season. Ultimately, it can be a case by case scenario.

How free agency works

Now where things begin to get a bit jumbled up is the various contract types that the players have worked out with teams. Here are the deals that franchises handle during the offseason in free agency:

Restricted Free Agents: These are players that can sign an offer sheet with any organization, but their original team can match any contract that they receive. It’s often associated with the fourth year of a rookie contract for former first-round picks. It’s also an option for players who are coming off a two-way deal and have on an NBA roster for 15 days in the season beforehand.

It’s also used for all players who have been in the league for three seasons or less, with the exception to the rule being a first-round pick that has the team not picked up their option after their second or third year. In these cases, those players can become unrestricted free agents.

Offer Sheets: These are offers that are presented by teams to players that are restricted free agents. The deals must span at least two years and are given to the player’s original team, who have two days to match the contract. If that organization passes on that, then the player is under a deal with the new team.

However, if the player were to refuse to report for a physical with their original team within the two days of the match, the franchise can withdraw its first refusal exercise notice, and the offer sheet is no longer is valid. That puts a one-year ban on the player from receiving any offer sheet. Lastly, the team presenting the offer sheet must have the salary-cap space to afford that deal, and the original team must also meet those parameters to keep that said player.

Qualifying Offers: These are given to players to make them a restricted free agent that must be submitted by the last game of the FInals and June 29. It’s a one-year guaranteed deal, which becomes a regular deal if the player signs it. These offers expire on Oct. 1, but have the option to be extended but can’t go past March 1.

If the deal is not accepted or withdrawn, the player remains a restricted free agent. Teams can negotiate a new contract after that deal expires.

Unrestricted Free Agents: These are the players that have either opted out of their deal, a buyout, or finished their contract. They can sign wherever they desire to play next. In some cases, these instances could be impacted if their existing contract options are exercised. 

Free-Agent Moratium: Lastly, this is a negotiation period that stems from July 1-6 to where teams can’t sign players but can agree to contracts. It extends through June 30 at 6:01 p.m. through noon on July 6.

Contract options

Along similar lines, these players can have a couple of different types of options on their deals with teams. Here are the possibilities in that regard:

Team Option: They are given to the original team that gives them the chance to keep the player in the final year of their deal or let them go, which is often the fourth year of a three-year contract. The rookie-scale deals for first-round picks have team options before the third and fourth years.

Player Option: These are given to players that provide them with the choice to stay for another year with their team or become an unrestricted free agent. That is often the fourth or fifth year of a deal.

Early Termination Option: This gives the player a chance to end their contract. That can’t be used until the end of the fourth year of their deal. If that option is declined, then that player becomes an unrestricted free agent. It’s an option that only players can receive.

Salary Cap Exceptions

Like the contract options, various exceptions can be used on players that range up to 11 different types. Here are a few of the most popular.

Qualifying Veteran Free Agent Exception (“Bird Rights”): That gives the team the ability to sign the player to a contract with the first-year salary that is up to the max annual player salary if he played for the team in any of the three previous years.

Early Qualifying Veteran Free Agent (aka “Early Bird Rights”): This allows the team to go raise that first-year salary on the new deal up to 175% of the player’s salary in the last year of his previous deal or 105$% of the average player’s salary the year before. The contract must be a multi-year deal.

Bi-annual Exception: Teams can sign one or more players to deals with salaries that are up to $3.382 million. It can’t be used in consecutive years and can’t be longer than two years. They can only be used on a team’s own free agents.

Mid-Level Salary Exception for Room Teams: If the team has enough salary-cap space during the year, then this can be used to sign one or more players to this deal. It can be worth up to $4.449 million and can’t be extended past two years and can only be used on a team’s own players.

Minimum Salary Exception: This gives teams the ability to sign a player to a deal spanning one or two years at the applicable minimum player’s annual salary.

Unique contract exceptions

Beyond that, here are a couple of particular contract exceptions that often occur more rarely than the other ones.

Disabled Player Exceptions: Teams can use this one-year option to replace a player who is dealing with a season-ending injury or illness. That new addition can only be signed to a salary up to 50% of the disabled player’s current salary or the amount of the non-taxpayer mid-level salary exception.

An application for this can be made for a single salary cap year at any time between July 1 through January 15. The exception will only be given if it’s deemed he can’t play through the following June 15. it expires on March 10, the next date on which it’s allowed.

Traded Player Exception: A team may replace a traded player with one or more players added by assignment. It’s only up through one season.