Fringe Benefits
There’s never been a better time to be on the edge of an NBA roster thanks to the new CBA
As details continue to trickle out about the NBA’s new collective bargaining agreement, one thing that has become clear is there’s never been a better time to be on the fringes of an NBA roster. There are now a number of contractual incentives available to the proverbial 15th men and those just on the cusp of making a team that make life on the edge a bit more comfortable than it has been in the past. Here are the three substantive changes and how they help players:
1. Teams Have a Third Two-Way Contract
The biggest change in the new CBA for players on the fringes of an NBA roster is the addition of a third two-way contract. While active NBA rosters can still only carry 15 players during the season, the two-way slots do not count against this total. What this means in practice for many teams is rostering 14 players on standard contracts and then cycling their two-way players onto the active roster so as to keep them each under the 50 game appearance cap associated with two-ways
The addition of a third two-way available to each team essentially creates 30 more high-paying professional basketball jobs in the United States. Two-Way contracts pay at half the rookie minimum, so this season players on two-ways received $502,000 and that number will continue to grow with the salary cap. 30 more slots at this figure is significant because it will keep more good young players in the United States, where G League salaries paid up to $40,500 this year. The $502,000 figure is also more than the vast majority of overseas professionals make, particularly for players with no or minimal professional experience.
2. Two-Way Contracts Can be Half-Guaranteed
Another incentive in the new CBA is the ability for two-way players to negotiate half their salary to be guaranteed on the first day of the regular season. In the current setup, two-way contracts are not guaranteed and teams often cycle through players in those slots during the season. While this is sometimes used as a way to reward a larger portion of a team’s G League roster, it also often results in no single player getting the full two-way salary for a season.
The new CBA gives some power back to the players by allowing them to negotiate to guarantee half their two-way salary on opening night of the regular season. Not every player will have the juice to get this done of course, but it could prove particularly valuable to second round picks and guys who blow up at Summer League as a way to differentiate bidders and extract more value.
3. Exhibit 10 Bonus Increased
Finally, the new CBA increases the maximum bonus for Exhibit 10 contracts from $50,000 to $75,000. NBA rosters are limited to 15 players (plus, starting next year, three two-way players) during the regular season and 20 players (including the two-way guys) during the offseason. Teams can have up to six Exhibit 10 contracts among the 20 man offseason roster. Exhibit 10 contracts contain a clause that allows the team to pay the player a bonus if that player is waived exchange for the player agreeing to join the franchise’s G League affiliate for a minimum of 60 days.
Increasing the Exhibit 10 bonus maximum by $25,000 should have impacts that are wide ranging and significant. Roughly 60% of all G Leaguers are on Exhibit 10 contracts. Although not every one of those players receives the maximum bonus, they should all benefit from the ceiling on Exhibit 10 deals being raised. What’s more, because the bonus is in addition to the G League salary, more players now have the ability to earn globally competitive salaries while remaining in the United States.
The headlines of the new CBA will continue to be about the in-season tournament, tax penalties, and superstar contract incentives, but the significant financial upgrades for players on the margins warrant attention as well. The ultimate impact of increasing two-way slots, allowing for guaranteed money in two-way contracts, and increasing Exhibit 10 contract bonuses will be keeping talented younger players in the United States longer. These financial incentives won’t make the difference for everyone deciding between going overseas and staying home to chase the NBA dream, but it will provide the security a lot of players are looking for to remain in the country after college.