A qualifying offer is a standing one-year contract offer that an NBA team can extend to an eligible player on its roster in order to ensure that the player will be a restricted free agent.
When can a qualifying offer be extended?
Teams are permitted to extend qualifying offers between the conclusion of the NBA Finals and the last official day of that NBA campaign (typically June 30th).
What happens if a qualifying offer is extended?
If a team extends an offer during this window, the player will become a restricted free agent when the next season begins. If they do not extend such an offer, the player becomes an unrestricted free agent instead.
What happens if a player signs the qualifying offer?
If a player chooses to sign the extended qualifying offer, the one-year deal becomes a standard NBA contract and the player hits free agency again the following season. Players that sign qualifying offers are unable to be traded without their consent due to other rules in the CBA pertaining to one-year contracts.
Why would teams want to extend a qualifying offer?
The incentive for teams to extend qualifying offers is to gain the right of first refusal on their pending free agents, an advantage inherent with restricted free agency. With that right of first refusal, teams have the ability to match any offer the free agent can attract from a third-party team on the open market, thus retaining them.
Which players are eligible to receive qualifying offers?
Teams can only extend qualifying offers to players that are eligible for restricted free agency. Players are only eligible for restricted free agency if:
- they’ve just come off the fourth-year of their rookie deal
- they’ve been in the league for three or fewer seasons (excluding first-round picks who become free agents early because they’ve had their rookie scale team options declined)
- they’ve just come off a two-way deal and had spent more than 15 days with the NBA club.
How much are qualifying offers worth?
The salary attached to qualifying offers is based on a pre-determined set of criteria involving the featured player’s draft position, their years of experience in the league and how much they’ve played.
The qualifying offer for players that become eligible for restricted free agency with three or fewer years of experience, typically second-round picks and undrafted free agents, is 125% of their previous contract or the league minimum plus $200,000, whichever is greater.
The qualifying offer for players coming off the fourth year of their rookie deals depends on their draft position. As outlined in Exhibit B-3 of the collective bargaining agreement, players drafted first-overall qualify for a 30% raise over the fourth year of their rookie deal. Players drafted 30th overall qualify for a 50% raise over the fourth year of their rookie deal.
These values are tweaked further by the NBA’s starter criteria, as outlined in Article XI of the CBA. Essentially, if a player played more than 2,000 minutes or started 41 games in the most recent campaign (or averaged those amounts over the previous two seasons), they meet the starter criteria.
- Players drafted between picks 1 and 14 that fail to meet the starter criteria automatically qualify for the same amount that the 15th pick in their draft class would qualify for.
- Players drafted between picks 10 and 30 that do meet the starter criteria automatically qualify for the same amount that the ninth pick in their draft class would qualify for.
- Undrafted players or those drafted in the second round that do meet the starter criteria automatically qualify for the same amount as the 21st pick in a very specific draft class would qualify for. In this scenario, the player would be treated as a member of the draft class whose four-year rookie deals end at the same time as the player in question. Since second-round picks and undrafted players don’t always sign four-year deals, this draft class isn’t necessarily their own.
How do qualifying offers impact team cap space?
Teams have to decided whether to extend or not extend a qualifying offer before the start of free agency formally begins, so the value for the qualifying offer never actually sits on their books until a player signs it. Instead, if an offer is extended and that player officially become a restricted free agent, the team faces a standard free agent cap hold.