When it comes to the NBA, the business side of things can be confusing. Rookie contracts, specifically, can be difficult to understand. How are they structured? What do they entail? Let`s break it down.
First, it`s important to understand that the NBA has a rookie scale. This is a chart that dictates how much a player can earn in his first four years in the league. Each pick in the NBA draft is given a corresponding salary slot on this scale. For example, the number one pick in the 2021 draft will make $8.1 million in his first year, while the last pick in the first round of the draft will make $1.6 million.
Now, just because a rookie is drafted in a certain spot doesn`t mean he`s guaranteed to make the full amount on the rookie scale. NBA teams have the option to negotiate with players and offer them less than the scale amount. This is where things can get tricky.
If the team and player can`t agree on a contract, the player has a few options. He can sign the contract the team offered him, he can sit out a season and re-enter the draft the following year, or he can play overseas for a year and then enter the NBA draft again. This is why you sometimes see players holding out of training camp or missing part of the season – they`re trying to negotiate a better deal.
It`s also worth noting that there are different types of rookie contracts. The standard rookie contract is for four years, but there is also a two-year contract option. The two-year contract is often used for second-round picks or players who may not be ready for the NBA right away.
So, what happens when a rookie`s contract is up after four years? At this point, the player becomes a restricted free agent. This means that the team he played for has the option to extend him a qualifying offer, which is a one-year contract for a predetermined salary. If the player accepts the qualifying offer, he becomes an unrestricted free agent the following year. If he declines the qualifying offer, the team still has the option to match any offer he receives from another team.
In summary, NBA rookie contracts are structured using a rookie scale, but negotiations can occur between the player and team. There are different types of rookie contracts, and after four years, a player becomes a restricted free agent. It`s a complex process, but understanding the basics can give you a better appreciation for the business side of the NBA.