NBA free agency officially starts on Saturday, and while it has become an extremely fascinating and intriguing period of time for fans, it can also be a confusing time.
How can a team sign players if they are over the cap? What are bird rights? Soft cap?
If these are questions you have, you are not alone. So, we decided to give you a little cheat sheet. Here are all the terms you need to know to fully understand what is going on in free agency:
Salary Cap - The salary cap is the total amount of money each team is allowed to spend on players. It is is a "soft cap," which allows teams to go over the cap, but have to pay a luxury tax to do so.
Unrestricted Free Agent - An unrestricted free agent (UFA) is free to sign with any team without any restrictions.
Restricted Free Agent - A restricted free agent can sign an offer sheet with any team, but the player's original team has three days to match the offer. If they do, they will retain the player.
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Qualifying Offer - Qualifying offers must be extended to eligible players in order to make them restricted free agents. These offers must be a one year offer for 125 percent of the player's previous salary or the player's minimum salary plus $175,000 (whichever is greater). If a player agrees to this one-year contract, they become an unrestricted free agent the following year. If not, he becomes a restricted free agent.
Luxury Tax - Teams pay a penalty for each dollar their team salary exceeds the salary cap. They also have to pay a repeat offender rate, which is an additional dollar for every dollar over.
Bird Rights - Named after Larry Bird, “Bird rights,” are when a player plays for three seasons with a team without signing as a free agent or being waived. If a player is traded, his Bird rights are traded with him. A team can go over the salary cap to re-sign a player if they own his Bird rights.
July Moratorium - Teams can start negotiating contracts with free agents on July 1, but plays=ers can not officially sign a contract until July 6. This period is known as the “July Moratorium.”
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