The CBA Glossary

Size and length

The NBA's Rookie Scale prescribes the amount of a first-round pick's first contract. The first, second and third years are given exact dollar amounts, and the fourth year and qualifying offer are equal to a predetermined percentage of the third year. As mentioned above, the amounts are decided by both the year in which the player is signed to the scale, and the pick with which they are taken, done on a bell curve. The first two years are guaranteed, while the final two are both team options, the only circumstance under which an NBA contract can have more than one team option. ⓘArticle VIII (Rookie Scale), Section 1 (Rookie Scale Contracts for First Round Picks):

(a) Each Rookie Scale Contract between a Team and a First Round Pick shall cover a period of two (2) Seasons, but shall have an Option in favor of the Team for the player’s third Season and a second Option in favor of the Team for the player’s fourth Season. The Option for the player’s third Season shall be exercisable during the period from the day following the last day of the first Season through the immediately following October 31. The Option for the player’s fourth Season shall be exercisable during the period from the day following the last day of the second Season through the immediately following October 31. (For clarity, consistent with the rule set forth in Article XLII, Section 2, if October 31 in any year falls on a Saturday, Sunday, or Federal Holiday, then the deadline for exercising Options in Rookie Scale Contracts shall be deemed to fall on the following business day.) Such Options shall be exercisable by notice to the player that is either personally delivered to the player or his representative or sent by email or pre-paid certified, registered, or overnight mail to the last known address of the player or his representative, signed by the Team, informing the player that the Team has exercised such Option.

(b)(i) The Rookie Salary Scale applicable to a First Round Pick is determined by the first Season to be covered by the player's Rookie Scale Contract. Accordingly, for example, if a player's Rookie Scale Contract commences with the 2023-24 Season, the 2023-24 Rookie Salary Scale shall apply. Within a particular Rookie Salary Scale, a First Round Pick's applicable Rookie Scale Amounts are determined by the player's selection number in the NBA Draft. Accordingly, for example, the Rookie Scale Amounts applicable to the eighth player selected in the first round of the NBA Draft shall be those specified in the applicable Rookie Salary Scale for the eighth pick. [...] (A full list of the salary amounts is maintained over at RealGM.)

If a player signs a Rookie Scale contract during a season, note that the amount is subject to proration. Beginning on 10th January of each season, the scale amount declines, like many exceptions, by an amount equal to one day's worth of the regular season - if a season has 174 days in it, therefore, the scale amount will decline by 1/174th for each day after 10th January inclusive. (Seasons are not of a uniform length, as explained here.) ⓘArticle VIII (Rookie Scale), Section 1 (Rookie Scale Contracts for First Round Picks):

[...] (b) Notwithstanding anything to the contrary in this Section 1(b)(i) or in Section 1(b)(ii) below, beginning on January 10 of each Season, an unsigned First Round Pick's applicable Rookie Scale Amount for such Season shall be reduced daily through the end of the Regular Season by an amount equal to the applicable Rookie Scale Amount (as set forth in the applicable Rookie Salary Scale) multiplied by a fraction, the numerator of which is one (1) and the denominator of which is the total number of days in such Regular Season.

The figures in the Rookie Scale were arrived at thus; baseline exact amounts were hard-written into the CBA in the 2023-24 season, to be used if the salary cap increase from 2022-23 to 2023-24 did not increase enough to surpass them. Then for each remaining season of the agreement, the scale amounts vary in line with the percentage change of the salary cap. So if the salary cap goes up 10%, so do each of the minimum salaries on the scale. This is the same methodology used on the minimum salary scale. (The percentage increases for the fourth year and the qualifying offer of a rookie scale deal are unchanged year to year irrespective of what the cap does.). ⓘArticle I (Definitions) Section 1. Definitions (hhh):

"Rookie Salary Scale" means the Rookie Salary Scale table for a Salary Cap Year prepared immediately upon the determination of the Salary Cap for such Salary Cap Year and including the adjusted Rookie Scale Amounts for such Salary Cap Year as calculated in accordance with Section 1(iii) below.

Article I (Definitions) Section 1. Definitions (iii):

"Rookie Scale Amounts" means: (i) for the 2023-24 Salary Cap Year, the Salary amounts set forth in the Baseline Rookie Salary Scale (annexed hereto as Exhibit B) adjusted by applying the percentage increase in the Salary Cap from the 2022-23 Salary Cap Year to the 2023-24 Salary Cap Year; and (ii) for each Salary Cap Year commencing with the 2024-25 Salary Cap Year, the Salary amounts set forth in the preceding Salary Cap Year’s Rookie Salary Scale adjusted by applying the percentage increase in the Salary Cap from the preceding Salary Cap Year to the current Salary Cap Year. For clarity, the applicable percentages in the “4th Year Option: Percentage Increase Over 3rd Year Salary” and “Qualifying Offer: Percentage Increase Over 4th Year Salary” columns specified in the Baseline Rookie Salary Scale shall remain the same for each Salary Cap Year during the term of this Agreement and shall be included in the Rookie Salary Scale prepared for each Salary Cap Year in accordance with Section 1(hhh) above.

If signed to the Rookie Scale Exception, players drafted in the first round have to be signed to within 80% to 120% of the salary amounts listed in the scale. That rule is inflexible. In practice, players almost always sign for 120%, with only the rarest of exceptions. It is possible to have some unguaranteed portion for lack of skill (which the usual meaning of the colloquial term "unguaranteed") but the 80% must at least be guaranteed. Teams could in theory unguarantee the remaining 40%, but there is no practical reason to do that. ⓘArticle VIII (Rookie Scale), Section 1 (Rookie Scale Contracts for First Round Picks):

(c)(i) A Rookie Scale Contract shall provide in each of the two (2) Seasons covered by the Contract and the first Option Year for Current Base Compensation of at least the greater of: (A) eighty percent (80%) of the applicable Rookie Scale Amount, and (B) the player's applicable Minimum Player Salary. Components of Salary in excess of the foregoing amount, if any, are subject to individual negotiation, except that (1) in no event may Salary plus Unlikely Bonuses for any Salary Cap Year exceed one hundred twenty percent (120%) of the applicable Rookie Scale Amount [...]

[...] (ii) A Rookie Scale Contract must provide for Compensation protection for lack of skill and injury or illness in each of the two (2) Seasons covered by the Contract and the first Option Year of not less than eighty percent (80%) of the applicable Rookie Scale Amount. To the extent permitted by Article II, Section 4(l), a Team and a First Round Pick may negotiate additional conditions or limitations applicable to the player’s Base Compensation protection, except that lack of skill and injury or illness protection of at least eighty percent (80%) of the applicable Rookie Scale Amount in each of the first two (2) Seasons and the first Option Year shall contain no such individually-negotiated additional conditions or limitations.

The "if" there reflects the fact that, if a player does not sign immediately, then, after a certain amount of time, they have other options available to them. See the Delayed Starters section for more.

RAs is the rule with team options in general, the fourth year of a rookie-scale contract (the second team option year) must have the same terms and protections as the third year (the first option year). This includes the percentage of guarantee. ⓘArticle VIII (Rookie Scale), Section 1 (Rookie Scale Contracts for First Round Picks):

(c)(ii) The terms and conditions (other than with respect to the payment schedule for the player’s Base Compensation) that apply to the second Option Year shall be unchanged from all terms and conditions that applied to the first Option Year (including, but not limited to, the percentage of Base Compensation that is protected), except that the Salary (excluding Incentive Compensation) and, if the Rookie Scale Contract provides for Incentive Compensation for the first Option Year, then the amount of each bonus, for the second Option Year shall be increased over the Salary (excluding Incentive Compensation) and amount of each bonus, respectively, for the first Option Year by the applicable percentage specified in the applicable Rookie Salary Scale.

Rookie scale contracts cannot contain any signing bonuses other than the "international player payment" outlined here. This is rarely relevant, although it did once apply to Andrea Bargnani. They also cannot contain a loan, although modifications to the payment plan are permissible. ⓘArticle VIII (Rookie Scale), Section 1 (Rookie Scale Contracts for First Round Picks):

(c)(i) [...] (2) a Rookie Scale Contract may not provide for a signing bonus (except for an "international player" payment in excess of the Excluded International Player Payment Amount made in accordance with Article VII, Section 3(e)) or a loan. A Rookie Scale Contract may provide for a payment schedule in any Season that is more favorable to the player than that called for under Paragraph 3 of the Uniform Player Contract, subject to the other provisions of this Agreement.

In the 2005 NBA Collective Bargaining Agreement, the rookie scale contract was changed slightly. Whereas contracts for first-round picks used to involve three guaranteed seasons with a team option on the fourth, the 2005 CBA changed that to only two guaranteed seasons, with team options on both the third and fourth. (This marks the only instance in which any NBA contract can have more than one option.) These options must be exercised before the start of the prior season; that is to say, the third-year team option must be exercised between the last day of the first season and the following 31st October (approxmiately the start of the second season), while the fourth-year team option must be exercised between the last day of the second season and the following 31st October (approximately at the start of the third). If the relevant 31st October falls on a weekend, the deadline becomes the first Monday afterwards. ⓘArticle VIII (Rookie Scale), Section 1 (Rookie Scale Contracts for First Round Picks):

(a) Each Rookie Scale Contract between a Team and a First Round Pick shall cover a period of two (2) Seasons, but shall have an Option in favor of the Team for the player's third Season and a second Option in favor of the Team for the player's fourth Season. The Option for the player's third Season shall be exercisable during the period from the day following the last day of the first Season through the immediately following October 31. The Option for the player's fourth Season shall be exercisable during the period from the day following the last day of the second Season through the immediately following October 31. (For clarity, consistent with the rule set forth in Article XLII, Section 2, if October 31 in any year falls on a Saturday, Sunday, or Federal Holiday, then the deadline for exercising Options in Rookie Scale Contracts shall be deemed to fall on the following business day.) Such Options shall be exercisable by notice to the player that is either personally delivered to the player or his representative or sent by email or pre-paid certified, registered, or overnight mail to the last known address of the player or his representative, signed by the Team, informing the player that the Team has exercised such Option.

Rookie scale contracts can contain a trade bonus. In practice, though, they very very very rarely do. Even with a trade kicker in a contract,.the player's salary plus unlikely bonuses for that season cannot exceed 120% of his rookie-scale amount - if a trade bonus would push him above that limit, the bonus is automatically reduced until the player is exactly at the 120% ceiling. Since players almost always sign for a flat 120% anyway, this leaves no room for a trade kicker. ⓘArticle VIII (Rookie Scale), Section 1 (Rookie Scale Contracts for First Round Picks):

(d) Notwithstanding any other provision of this Agreement, if a trade of a Rookie Scale Contract would, by reason of a trade bonus contained in such Contract, cause the player’s Salary plus Unlikely Bonuses for the Salary Cap Year in which such trade occurs to exceed one hundred twenty percent (120%) of the player’s applicable Rookie Scale Amount for such Salary Cap Year, such player’s trade bonus shall be deemed amended to the extent necessary to reduce the player’s Salary plus Unlikely Bonuses for such Salary Cap Year to one hundred twenty percent (120%) of the applicable Rookie Scale Amount.

Extensions

After the third year of a rookie scale contract, in the offseason before the fourth one starts, these players are eligible to sign contract extensions that will begin the following season. The window for this is between the end of their first season and the start of their fourth - the full details of all the parameters of these extensions can be found on the Extensions page.

Free agency

When rookie scale contracts reached the end of their four years, the players are eligible for a qualifying offer, the lone exception to the rule that otherwise limits qualifying offers to players with only three years or less of experience. The particulars of that - including the qualifying offer's size, and the starter criteria caveat - can be found under the free agency page.

If a rookie scale contract player has either of their two team option seasons declined, however, they do not enter restricted free agency. This is in spite of the fact that they would have either two or three years of experience, depending on which offer was declined. Furthermore, the team cannot, neither using cap space nor any extension, re-sign them to a new deal that would have started at a salary that paid more than the option year that they declined would have called for. This is done to prevent teams from declining rookie scale team options

(The CBA is a little unclear as to whether a player who has his first option year declined and who then signs another one-year deal would be eligible for a qualifying offer after that season, given that they would still be only a three-year veteran. The only three times in history to date that this could have applied - Shannon Brown in 2009, Morris Almond in 2013 and Shane Larkin in 2016 - saw no qualifying offer extended. But this may have been by choice, rather than by rule. The CBA's exact verbiage on eligibility - "Any Veteran Free Agent (other than a First Round Pick whose first Option Year or second Option Year was not exercised) who (i) will have three (3) or fewer Years of Service" - is open to interpretation either way.)

The "Higher Max Criteria" for fifth-year players - a dispensation added in the 2017 CBA to grant teams the ability to sign their star young players coming off their rookie deals to bigger second contracts - have changed. Under the 2023 CBA, a player must make any All-NBA team or win the Defensive Player of the Year award in the previous season (or in two of the previous three) to be eligible for a maximum salary beginning at 30% of the cap max salary. They need only be MVP once, but it must be during the previous seasons. Previously, the player had to make an All-NBA team or win DPOY twice in the previous four seasons, or win MVP at any point, while the previous two-time All-Star starter criterion is eliminated altogether.

Higher Max Criteria have also been standardised; there will therefore no longer be two different thresholds for fifth-year players getting bigger maximum salaries in extensions, and eight/nine-year veterans getting bigger maxes. They have the same criteria. This simplifies an often-confused series of similar but slightly differing rules and terminologies.

Delayed starters

As mentioned in the intro, teams generally sign their first-round picks in the same summer that they drafted them. It is not a requirement, but it is the norm - after all, these players want to play in the NBA, and the quicker the first contract is signed, the earlier the potentially-lucrative second one will come around.

However, not all do. No one has to. And for players drafted in the first round who wait more than three years to sign, they can bypass the scale altogether.

Players who were drafted in the first-round, who did not sign with the team right away, and who do not sign in the NBA or play in college for at least three seasons after their draft selection, will find themselves with two options. They can still sign to the rookie scale contract, assuming it is tendered; they will still be eligible to sign to the scale for whatever the amounts are in the year that they sign, instead of the year in which they were drafted (so a player was drafted third overall in 2031 and did not sign until 2034, would sign for the 2034 rookie scale amount for the #3 pick rather than the 2031 #3, even though they were the 2031 #3). The other thing that the player can do is sign a larger deal. If the team that is signing the player has enough salary cap space, they can sign the player to a larger contract (i.e. starting at more than the usual cap of 120% of the rookie scale), as as the contract still complies with general salary cap rules. This non-scale contract must be for at least three seasons, has to be above the scale amount, and not contain any options in the first three (although a three-year deal with a fourth-year option is possible). ⓘArticle VIII (Rookie Scale), Section 2 (Rookie Contracts for Later-Signed First Round Picks.):

Except as provided in Section 3 below, a First Round Pick who does not sign with the Team that holds his draft rights for any portion of the three (3) Seasons following the NBA Draft in which he was selected (and who did not play intercollegiate basketball during such period) may enter into either (a) a Rookie Scale Contract in accordance with Section 1 above, or (b) if the Team has Room in excess of the applicable first-year Rookie Scale Amount and subject to the provisions of Article VII, a Contract covering no fewer than three (3) Seasons (not including any Option Year) that provides for Base Compensation in the first Season greater than one hundred twenty percent (120%) of the applicable first-year Rookie Scale Amount.

(In this context, "room" does not solely mean cap space; it also includes exceptions. So the MLE will suffice.) ⓘArticle I (Definitions), Section 1 (Definitions):

(kkk) "Room" means the extent to which: (i) a Team’s then-current Team Salary is less than the Salary Cap; or (ii) a Team is entitled to use one of the Salary Cap Exceptions set forth in Article VII, Sections 6(c), (d), (e), (f), (g), and (j) (Disabled Player Exception, Bi-annual Exception, Non-Taxpayer Mid-Level Salary Exception, Taxpayer Mid-Level Salary Exception, Mid-Level Salary Exception for Room Teams, and Traded Player Exception).

The above, of course, does not happen often. But it very occasionally does - see, for example, Bogdan Bogdanovic.

If a player does not sign their rookie scale deal, the team holding their draft rights is still charged 120% of the rookie scale to their cap number. This hold is also active before teams sign their first-rounders, to prevent teams with cap space from signing other guys first with the cap space that would be created without a cap hold such as this. [NB: the cap hold used to be for just 100%, thus allowing for a smaller cap number for unsigned picks, which led to teams with cap space aspirations delaying signing their picks to enjoy that small 20% advantage. It is now however 120%, closing the loophole.]

An unsigned first round pick can be removed from team salary if the team and player both agree in writing not to sign any contract through the following 30th June. (Petteri Koponen and the Dallas Mavericks, for example, did this for many years.) If a first-round pick signs with a non-NBA team instead of joining the league, his cap hold is excluded from the team salary on the date he signs his non-NBA contract, or the first day of the regular season, whichever is later, for the remainder of that season, although it will come back the following one. See the cap hold section for more of the particulars on both of these

The only otherway to avoid the cap hold is to disown the player's rights entirely, as below.

Renouncements/loss of draft rights

The final option is to renounce the draft rights altogether. Which would mean that the team just wasted a draft pick.

Renouncing of draft rights is rare in the first place, but it is almost entirely unprecedented for first-round picks. To date, as best as can be ascertained, it has happened precisely once, when the Bulls renounced the rights to Travis Knight three weeks after selecting him with the 29th and final pick of the first round of the 1996 NBA Draft, It has not happened since the 1999 advent of the rookie scale. And it is very unlikely to ever happen again.

In addition to the renouncement option, if the team does not make a required contract offer (“Required Tender”), or makes a tender only to withdraw it, the player becomes what the CBA calls a "rookie free agent". A rookie free agent is a player no longer bound to his drafting team - if ever there was one - and anyone whose draft rights are lost in this way becomes a free agent, who can sign any deal with anybody. And finally, if a player is drafted in the first-round, and between the date of their initial draft and the date of the following year's draft does not sign anywhere - not just in the NBA, but anywhere - they will also become an NBA rookie free agent.

If any of these four circumstances occur, the team that drafted him is banned from signing that player until they have signed with another NBA team first and become a free agent again, be it via contract expiration or waivers. This is to ensure that teams who lose draft picks cannot "go back and fix it", unless the player fully cycles through another team. ⓘArticle VIII (Rookie Scale), Section 3 (Loss of Draft Rights):

If for any reason a Team fails to make a Required Tender to a First Round Pick in accordance with Article X, withdraws a Required Tender to a First Round Pick in accordance with Article X, or renounces a First Round Pick in accordance with Article X, or if a First Round Pick selected in a Subsequent Draft does not sign a Contract for a period of one (1) year following such Subsequent Draft in accordance with Article X, then the rules set forth in Sections 1 and 2 above shall not apply, and such First Round Pick shall become a Rookie Free Agent. In addition, any Team that fails to make a Required Tender to a First Round Pick, withdraws a Required Tender to a First Round Pick, renounces a First Round Pick, or fails to sign within one (1) year a First Round Pick selected in a Subsequent Draft shall be prohibited from signing such player until after he has signed a Player Contract with another NBA Team, and either (a) the player completes the playing services called for under the Contract, or (b) the Contract is terminated in accordance with the NBA waiver procedure.

Forfeiture

In the event of a first-round pick being forfeited, you might think that the scale would continue has normal. But it does not.

If any first-round draft picks are forfeited before an NBA Draft, the NBA does not simply leave gaps in the rookie salary scale. Instead, it removes salary slots from the middle of the rookie scale and then shifts the remaining salary slots accordingly.

Specifically, if one pick is forfeited, the salary slot for the 15th pick is removed, no matter which pick was forfeited. If two picks are forfeited, the salary slots for the 15th and 16th picks are removed, no matter which they would have been. If threepicks are forfeited, the salary slots for the 14th, 15th and 16th picks are removed with the same caveat. And if more than three picks are forfeited, additional salary slots are removed following the same pattern, centered around the middle of the first round. Players are then deemed to be receiving the salaries using this adjusted scale - their draft position remains the same, but the salary scale has fewer slots in the middle. The NBA effectively deletes the 15th salary slot, keeps the top 14 unchanged, and shifts everyone drafted after that point up one slot in the rookie salary scale. ⓘArticle VIII (Rookie Scale), Section 1 (Loss of Draft Rights):

(b)(ii) Notwithstanding Section 1(b)(i) above, if, pursuant to any provision of this Agreement or the NBA Constitution and By-Laws, one (1) or more Teams is required to forfeit one (1) or more draft picks in the first round of a particular NBA Draft, then:

(A) the Rookie Salary Scale for the Salary Cap Year immediately following such Draft (or the Salary Cap Year of such Draft if the Draft occurs on or after July 1) shall be adjusted by removing one (1) or more Rookie Scale Amounts from the middle of the Rookie Salary Scale, as follows: if one (1) first round pick is forfeited, then the Rookie Scale Amounts that would have been applicable to the 15th player selected in the first round (absent any forfeiture of picks) (hereinafter, the “15th Pick”) shall be removed from the Rookie Salary Scale; if two (2) first round picks are forfeited, then the Rookie Scale Amounts applicable to the 15th Pick and the pick immediately following the 15th Pick shall be removed from the Rookie Salary Scale; if three (3) first round picks are forfeited, then the Rookie Scale Amounts applicable to the 15th Pick and the picks immediately preceding and immediately following the 15th Pick shall be removed from the Rookie Salary Scale; and if more than three picks are forfeited, additional Rookie Scale Amounts shall be removed from the Rookie Salary Scale in accordance with the foregoing procedure; and

(B) the Rookie Scale Amounts applicable to players selected in such Draft shall be determined by their selection number under the Rookie Salary Scale as adjusted by Section 1(b)(ii)(A) above. Accordingly, for example, if one First Round Pick were forfeited in the first round of the 2024 Draft, the applicable Rookie Scale Amounts would remain unchanged for the first 14 picks, and the Rookie Scale Amounts applicable to the remaining 15 picks in the first round would be the Rookie Scale Amounts that (absent any forfeiture of picks) would have been applicable to picks 16 through 30.

How George Hill led to a rule change

It was once upon a time possible for a rookie scale contract to come in at less than the amount of the minimum salary scale. It happened to George Hill, then of the San Antonio Spurs, in the third year of his rookie scale deal in the 2010-11 season. Hill signed a rookie scale deal in which he received 120% in the first two seasons, then 80% in the third (which is perfectly allowed; each year has to be between 120% and 80%, but the three do not have to be at the same percentage), and his slated scale salary in that third season of $771,440 was due to pay less than the third-year player minimum salary of $854,389. Hill's contract was therefore modified upwards to pay him $854,389, and his fourth year - which, as above, is calculated as a percentage of the third year - was recalculated from that amount, boosting it from $1,390,906 to $1,540,463. As a result of the Hill situation - which was not foreseen - the CBA now expressly states that rookie scale deals cannot be signed for less than (a) 80% of the scale, or b) the relevant minimum salary.ⓘArticle VIII (Rookie Scale), Section 1 (Loss of Draft Rights):

c(i)A Rookie Scale Contract shall provide in each of the two (2) Seasons covered by the Contract and the first Option Year for Current Base Compensation of at least the greater of: (A) eighty percent (80%) of the applicable Rookie Scale Amount, and (B) the player’s applicable Minimum Player Salary. [...]

MAIN TAKEAWAYS:

Links:

1. Rookie Scale Amounts - RealGMRealGM provides accurate numbers on the rookie salary scale amounts for every year, both past and present. Remember, players can sign for up to 120% of those first two yearly amounts - and usually do.