Free Agency and Bird Rights

An Exception to the NBA's Salary Cap

Larry Bird
Larry Bird. Robert W Stowell Jr./Archive Photos/Getty Images

A player in the National Basketball Association (NBA) who is in the final year of his contract has extra incentive to produce an exceptional season since his impending free agency allows him to listen to contract offers from any team. But some players in this situation are granted "Bird Rights" to negotiate contracts that can, within limits, allow their current team to exceed the salary cap.

History of Bird Rights

In 1983, the NBA's collective bargaining agreement (CBA) called for the league's first-ever salary cap, which would limit the cash amount teams could spend on players' salaries.

Rather than institute a "hard cap," which would strictly prohibit teams from going above a certain salary limit, the NBA chose a "soft cap" with a handful of exceptions. With the contract of Boston Celtics forward Larry Bird expiring at the end of the 1983 season, giving the budding star his first chance to test free agency, the most notable exception to this salary cap was the Qualifying Veterans Free Agent Exception. This "Bird" Exception, as it came to be known, gave free agents Bird Rights to incentivize negotiating with their existing team.

Implementation of the Exception

Each time the NBA and the NBA Players Association (NBPA) negotiate a CBA, the terms of the Bird Exception are subject to change, but Bird Rights essentially offer an incentive for qualifying players to return to their existing teams. Bird Rights allow a team to sign a free agent to a first-year salary up to the maximum player salary, regardless of its salary cap room, provided the player was on the team's roster for three consecutive seasons.

This essentially gives a player the maximum amount of money if he signs a contract with his existing team, while other teams' offers will be affected the salary cap and how much money they have committed to other players.

Other clauses in the NBA CBA allow for Early Qualifying Veteran Free Agent ("Early Bird") Exceptions to kick in if a player had been on a team's roster for two seasons, and Non-Qualifying Veteran Free Agent ("Non-Bird") Exceptions to any player who didn't qualify for Bird Rights or Early Bird Rights.

Neither of these exceptions allows for teams to offer a player a maximum salary that exceeds the salary cap, though.

Changing Teams Via Trade and Waivers

If a player is traded before his contract expires, he retains any Bird or Early Bird Rights he has earned and can negotiate with the team he's been traded to as such. Players who have been waived and claimed by another team before clearing waivers retain their Early Bird Rights, thanks in part to a 2012 arbitration ruling that decided Jeremy Lin retained his Early Bird Rights when claimed on waivers by the New York Knicks. To retain full Bird Rights on waivers, though, a player must be waived via the NBA's one-time Amnesty Clause.

A Misnomer, At First

While Bird's free agency certainly appeared to be one reason the NBA and the NBPA agreed on the Qualifying Veteran Free Agent Exception, Bird Rights weren't actually used on Bird in 1983. The Boston forward signed a contract prior to the 1983 season, and the salary cap didn't go into effect until the 1984-85 season, so Bird's contract signing was unaffected by the salary cap. It wasn't until 1988 that Bird actually exercised his Bird Rights.