📘 Chapter 1: The Guaranteed First-Round Rookie Deal
When a player is selected in the first round of the NBA Draft, their contract is structured by the league’s rookie salary scale. It’s a guaranteed four-year deal, with:
- The first two years fully guaranteed
- Team options for years 3 and 4
📌 Example: Victor Wembanyama, the #1 pick in 2023, signed a contract worth over $55 million across four years.
🧠 Fan Note: This gives teams long-term control while protecting young players financially early in their careers.
📘 Chapter 2: The Second-Round Hustle
Second-round picks (31–58) don’t get the same guarantee. Their contracts are fully negotiable — and unpredictable.
They may receive:
- Partially guaranteed contracts
- Exhibit 10 contracts
- Or even two-way deals
📌 Example: Jalen Pickett (32nd pick, 2023) had to negotiate from scratch — no set salary floor, only what his agent could secure.
🧠 Fan Note: A second-round pick often has to prove their value during Summer League or training camp.
📘 Chapter 3: Exhibit 10 — The NBA’s Secret Tryout Contract
The Exhibit 10 is one of the most common tools used for undrafted or fringe prospects.
What it is:
- A non-guaranteed, one-year deal at the league minimum
- Includes a clause that allows teams to convert the player to a two-way contract
- Offers a bonus (up to $75,000) if the player is waived and joins the team’s G-League affiliate for at least 60 days
📌 Example: A European guard goes undrafted, signs an Exhibit 10 with the Knicks, plays preseason, and lands with Westchester in the G-League — earning a developmental payday.
🧠 Fan Note: This is how teams retain talent without locking into big-money deals.
📘 Chapter 4: Two-Way Contracts — A Foot in Both Worlds
Two-way contracts let players split time between the NBA and G-League.
Key facts:
- Teams can carry three two-way players
- Players can spend up to 50 games with the NBA team
- Annual salary: ~$559K (2024–25 season)
- Not eligible for the NBA Playoffs unless converted
📌 Example: Jose Alvarado (Pelicans) went from undrafted two-way player to playoff contributor after his deal was converted midseason.
🧠 Fan Note: Two-way deals are proving grounds — play well, and you might get promoted.
📘 Chapter 5: 10-Day Contracts — The League’s Emergency Call-Up
During the season (starting January 5), NBA teams can sign players to 10-day contracts — short-term deals that fill injury gaps or roster shortages.
Rules:
- A team can sign the same player to two 10-day contracts
- After that, they must offer a full-season deal to retain them
📌 Example: Mac McClung earned a 10-day contract with the Bulls after tearing up the G-League.
🧠 Fan Note: Think of 10-days like temp jobs — except you might earn an NBA spot if you shine.
📘 Chapter 6: Free Agency Contracts — The Wild West
There are three types of NBA free agents:
- Unrestricted Free Agent (UFA): Free to sign anywhere.
Example: LeBron James in 2010. - Restricted Free Agent (RFA): The player can sign an offer sheet, but their original team can match it within 48 hours.
Example: Austin Reaves in 2023. - Veteran Minimum Contracts: Salary based on NBA tenure; ideal for bench depth.
Example: Jeff Green signs a minimum deal based on 15+ years of service.
🧠 Fan Note: Agents negotiate everything — salary, minutes, role, even travel perks.
📘 Chapter 7: Non-Guaranteed and Partially Guaranteed Deals
Some players sign non-guaranteed or partially guaranteed contracts in training camp.
- Non-guaranteed: Player earns money only if they make the roster.
- Partially guaranteed: A portion (e.g., $500K of $2M) is guaranteed even if waived.
📌 Example: A player might be waived before the regular season begins but still earn part of their salary.
🧠 Fan Tip: This is how teams take preseason risks without long-term commitment.
📘 Chapter 8: Buyouts and the Waiver Market
After the trade deadline, players may negotiate buyouts if they’re no longer in the team’s plans.
- They give up part of their salary in exchange for freedom to sign elsewhere.
- Waived players go through the waiver wire — teams can claim or let them become free agents.
📌 Example: Reggie Jackson signs with the Nuggets after a buyout.
🧠 Fan Note: Playoff-bound teams often scoop up these veterans for one last run.
📘 Chapter 9: Overseas Draft-and-Stash Rights
When an international player is drafted but not signed immediately, teams retain their “draft-and-stash” rights while the player develops overseas.
📌 Example: Nikola Jokic was drafted in 2014 but stayed in Europe for a year before joining Denver.
🧠 Fan Note: Teams use this tactic to manage the salary cap and delay roster crunches.
📘 Chapter 10: Salary Cap Tools — How Teams Keep Spending
You may wonder: “How does a team keep signing players when they’re over the cap?”
Enter exceptions:
- Mid-Level Exception (MLE): Used for above-cap signings ($12M max).
- Bi-Annual Exception: For smaller signings every other year (~$4.7M).
- Veteran Minimum Exception: Lets over-cap teams sign vets at league minimum.
🧠 Fan Note: These tools help contenders add talent without tearing up their core.
🔑 Final Word: It’s More Than a Game — It’s a Business
Contracts are more than paperwork. They determine who gets a shot, who stays in the league, and who builds generational wealth. Behind every highlight is a clause, an option, a deadline, or a dream.
If you’re a fan, evaluator, or young player looking to understand the process — this is your map. Because in the NBA, talent opens the door — but the right contract keeps you in the building
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