Players Subject to RFA

The following Players are subject to the RFA process:

1. First Round Picks finishing their 4th Year of a Rookie Scale Contract;
2. Two-Way Players that spent 15 days on an NBA Roster during the Regular Season in the last Season of the Contract;
3. All other Players that have an expiring Contract and have 3 or fewer YOS in the League.

Qualifying Offers

A Qualifying Offer (QO) is a standard offer the Prior Team has to make to an RFA by the deadline to keep him from becoming an Unrestricted Free Agent (UFA) and losing Matching rights.

Key Dates

Deadline to Trigger RFA

A QO must be made by 5:00 PM on June 29th to trigger the Player’s RFA Status.

If a QO is not timely made, then the Player will become a UFA instead, removing him from the entire RFA process and allowing him to sign with any Team.

A Team can make a QO anytime after the NBA Finals.

Deadline to Accept QO

The Player has until October 1st to accept the QO, unless the Team extends the deadline which is permitted through March 1st.

The Team can extend the deadline multiple times, so long as it doesn’t extend past March 1st.

Deadline to Withdraw QO

The Team can unilaterally withdraw the QO by July 13th, and can withdraw the QO with the Player’s consent after July 13th.

The Player immediately becomes a UFA upon withdrawal of the QO.

If the withdrawal occurs after July 13th, then the Team is deemed to have Renounced its Free Agent rights to the Player.

QO Terms – Standard Contracts

Below are the minimum requirements for QO when the RFA last played on a Standard Contract.

Salary Requirement

The Rookie Salary Scale contains the amount of the QO applicable to each Draft Pick.

However, instead of using when the Player was selected, you adjust based on whether the Player meets the Starter Criteria.

See table below for the adjustments based on (i) where the Player was drafted and (ii) if he met the Starter Criteria.

Starter Criteria

The Player meets Starter Criteria if he meets one of the following:

1. In his 4th Season, he either (i) started 41+ games, or (ii) played 2,000 minutes; or
2. During his 3rd and 4th Seasons, he averaged (i) starting 41+ games or (ii) 2,000+ minutes played in the Regular Season.

Other Required Terms

Below are the additional requirements that a QO must contain:

1. Length – Must be for 1 Year;
2. Protection – Full Compensation Protection for lack of skill/injury/illness;
3. Payment Arrangement – Must be default payment schedule;
4. Physical Exam – A Physical Exam contingency is permitted in the QO;
5. Other Terms – All other terms must be unchanged from the prior Seasons.

The Maximum Qualifying Offer

Generally

Along with the QO above, the Team can get right to the point and offer the Maximum Qualifying Offer to Players finishing their Rookie Scale Contracts. This is offered simultaneously with the QO.

Terms of Maximum QO

The required terms of a Maximum QO are the following:

1. Salary – Maximum Salary in Base Compensation (no Bonuses);
2. Increases – 8% Increases required;
3. Length – 5 Seasons;
4. Protection – Full Compensation Protection for lack of skill/injury/illness;
5. Options – No Options/ETO’s permitted.

Withdrawal and Acceptance

The Maximum QO can only be withdrawn if the standard QO is also withdrawn (i.e. can’t withdraw the Maximum QO and keep the standard QO).

Player can accept the Maximum QO or the standard QO.

Terms for Two-Way Contracts

Below are the requirements for QO when the RFA last played on a Two-Way Contract.

2-Year Two-Way

If the Player finished a 2-Year Two-Way Contract, or played the last two consecutive Seasons under a Two-Way for the same Team, then the following QO is required:

1. Amount – Base Compensation for his applicable Minimum Salary;
2. Protection – Compensation Protection for lack of skill/injury/illness for $102,000 for the 2025-26 Season, to be increased in line with the Salary Cap.

All Other Two-Ways

The QO is for the Two-Way Salary amount with the maximum amount of Compensation Protection allowed for Two-Ways.

• Exception – If the Player is no longer eligible for a Two-Way Contract, then the QO is the same as that for the “2-Year Two-Way” above.

Offer Sheets

Requirements

An Offer Sheet must be submitted to the Offering Team by March 1st.

The Offer Sheet must contain the following:

1. Length:
   • Standard QO – Minimum 2 Seasons (excluding Option);
   • Maximum QO – Minimum 3 Seasons if Maximum QO (excluding Option);
2. Two-Way – Cannot be for a Two-Way Contract;
3. Room – The Offering Team must have Room to sign the Offer Sheet, and retain the Room throughout the entire process.

Offer Sheet Withdrawn

An Offer Sheet can only be withdrawn if consented to by the Player, Offering Team and Prior Team.

If withdrawn, any Team has the ability to sign the Player to another Offer Sheet as if the prior Offer Sheet was never signed.

Deficient Offer Sheets

If the substance of the QO does not satisfy the requirements above, notice must be provided to the League and the Team will have 5 business days to cure the deficiency without the QO being deemed untimely or insufficient.

Principal and Non-Principal Terms

The Principal Terms of a Contract are:

1. Term length;
2. Payment Arrangements (Signing Bonus, Base Compensation, Deferred Compensation and Payment Schedule);
3. Incentive Compensation, limited in the following way:
   • Team Performance – Deemed “Likely” for both Offering Team and Prior Team;
   • Bonuses based on League Honors;
4. Any Allowable Amendments (i.e. Compensation Protection, Trade Bonus, etc.).

The “Arenas” Provision

The Arenas Provision will only apply when the RFA has 1 or 2 YOS.

When this is the case, Year 1 of an Offer Sheet is limited to the NTMLE (with adjustments in Year 3 and 4).

Below are the details of the limitation and how it affects Team Salary when applied.

Salary Limitations/Adjustments

Below is a year-by-year breakdown of the Arenas provision:

Year 1 Limitation

The Salary (plus Unlikely Bonuses) in the First Year of the Offer Sheet cannot exceed the amount of the NTMLE for the applicable Year.

Year 2 Limitation

The Second Year is limited to a 5% raise from Year 1.

Year 3 Maximum Adjustment

If Years 1 and 2 of the Offer Sheet are the maximum provided above, then Year 3 can be up to the Maximum Salary the Player would have earned in Year 3 had he been offered his Maximum Salary since Year 1.

The Offering Team must have Room in Year 1 equal to the average aggregate Salaries of all four Years.

Year 4 Limitation

If Year 3 is for the Maximum Salary permitted above, then Year 4 is limited to a 4.5% increase from Year 3.

Calculating a Maximum Arenas Offer

Below are the steps to calculate a Maximum Arenas Offer and how much Cap Space a Team needs to make the offer.

Calculating Maximum Arenas Offer Based on Cap Space

We know a Team can make the Maximum Arenas Offer above if they have $29 million in Cap Space. But a Team can offer up to this amount.

So what happens if a Team has less than the $29 million in Room? How do we calculate the Maximum Arenas Offer the specific Team can make?

First, Years 1 ($14,104,000) and 2 ($14,809,200) are the fixed maximum amounts that must be made. We also know that Year 4 will be based on a 4.5% raise of Year 3. The key is taking the Team’s Cap Space and working backwards to find Year 3.

Effect on Team Salary

Offer Sheet Not Matched

If the Prior Team does not match the Offer Sheet, then the Offering Team will apply the average of the aggregate of each Season’s Salary across all Years.

Offer Sheet Matched

If the Prior Team excercises its ROFR and matches, it depends on the Prior Team’s Team Salary at the time.

If the Prior Team’s Team Salary and the average of the aggregate Salaries is above the Salary Cap, then the Player’s Salary remains the same as in the Offer Sheet.

If the Prior Team’s Team Salary and the average of the aggregate Salaries is below the Salary Cap, then the Team may elect to apply the average of the aggregate Salaries across all Years or keep it the same as the Offer Sheet.

The election must be contained within the ROFR exercise notice.

ROFR Notice (i.e. Matching)

If an Offer Sheet is signed by the RFA, then the Prior Team has the right to Match the Principal Terms of the Offer Sheet by timely issuing an ROFR Notice.

Deadline to Match

The deadline to match the Offer Sheet depends on the time the Offer Sheet was received by the Prior Team.

If received during the Moratorium Period, the deadline is 11:59 P.M. ET on July 7th.

If received after the Moratorium Period:

1. Received prior to 12:00 P.M. ET – Due by 11:59 P.M. ET the following day;
2. Received after 12:00 P.M. ET – Due by 11:59 P.M. ET on the second day following receipt.

Room Requirement

To match an Offer Sheet, the Prior Team can use Room, Bird Rights or the Minimum Exception provided the amount is sufficient to cover Salary plus Unlikely Bonuses.

Effect if Offer Sheet is Matched

Player Contract Signed

The Player and Prior Team will have entered into a Contract containing all Principal Terms (but not any Non-Principal Terms) in the Offer Sheet.

The Contract may not be amended in any manner for a period of one Year.

Restriction on Trade and Sign-and-Trade

The Prior Team cannot Trade a Player for one Year after matching the Offer Sheet without the Player’s consent, and can not trade the Player to the Offering Team for 1 Year, even if consent were provided.

The Prior Team cannot exercise the ROFR Notice as part of a Sign-and-Trade.

Effect of Not Matching

The Player and Offering Team are deemed to have entered into a Contract when the deadline for the Prior Team to match passes, or notice is provided the Prior Team is not going to match.

The Contract will be for all of the terms and conditions contained in the UPC attached to the Offer Sheet (including the physical exam contingency), and shall not be amended in any manner for one Year.

Relinquishing Matching Rights

The Prior Team can relinquish its Matching rights at any time except for when it cannot withdraw its QO without the Player’s consent (discussed above).

If Matching rights are relinquished, then the Team’s ROFR/Bird Rights to the Player are considerd Renounced, and the Player becomes a UFA.

Physical Exams During RFA Process

All three stages of the RFA process (QO, Offer Sheet, ROFR Notice) allow a physical exam contingency, but it gets tricky because a failed physical can take place after a Team’s rights have expired or been terminated. As a result, the rules below were put in place.

Qualifying Offer and Exams

If the Player fails the physical exam, then the Prior Team can withdraw the QO and it will be null and void.

Offer Sheet and Exams

Timeline of Physical in Offer Sheet

Must be conducted within 2 days of signing.

The Prior Team must notify of failure within 3 days, otherwise Player is deemed to have passed.

The Offer Sheet will be null and void if the physical is failed.

Matching Rights after Offer Sheet Voided

If the Offer Sheet is null and void because of the physical exam, the Prior’s Team’s rights depend on the status of its Matching rights:

If the Matching rights had already been termined for any reason, then the Prior Team can:

1. Reinstate its Matching rights (provided the Prior Team still has the Room); or
2. Decline its Matching rights allowing the Player to become a UFA.

If Matching rights have not yet terminated, the Prior Team can still match the Offer Sheet as if it’s in place, or take one of the two options above.

The Prior Team has 2 days to make its decision.

Exams After ROFR Notice (Matching)

Effect After Refusal to Submit to Exam

If the Player fails to submit to a physical within 2 days after the ROFR Notice, the Team can waive the contingency or withdraw the ROFR Notice within 2 days, resulting in the following:  

1. The Offer Sheet is now also deemed invalid and Player can’t sign with the Offering Team for 1 Year unless Prior Team’s Matching rights are relinquished (i.e. Player becomes a UFA);
2. Player cannot enter into another Offer Sheet for the current Year;
3. The Qualifying Offer deadline is deemed to have passed (so Player can’t just sign the QO);
4. Player is prohibited from signing with the Prior Team unless he signed for the Principal Terms from the Offer Sheet within the later of (i) three months from the withdrawal of the ROFR Notice or (ii) January 15th of the current Year;
   • If the Offer Sheet was made under the Arenas Provision, the Prior Team can still match using the same rules, and make the election with regard to Team Salary should it have sufficient Cap Space to do so.

Effect of Failed Physical After ROFR Notice

If the Player takes the physical and fails, then the Prior Team can waive the contingency and enter into the Contract, or withdraw the ROFR Notice, at which point the Offering Team and Player are treated as having a signed Contract per the Offer Sheet.

Other Rules

Failure to Sign Anything during RFA Process

If an RFA fails to sign the QO by the applicable deadline and an Offer Sheet by March 1st, then the Prior Team will continue to hold Matching rights over the Player for the next Season.

The Prior Team must then make another QO by June 29th of next Season to retain Matching rights for the Player, and the QO terms will be the same as the previous Season.

The same rules will apply each Season that the Player does not sign.

No Public Statements/Enticements

The Prior Team can’t make any public statement saying that they would match any Offer Sheet made.

No Team can offer consideration to another to submit or not submit an Offer Sheet or ROFR Notice.

Medical Disability

If the Player knows he’ll have a medical disability prohibiting him from performing during the season of the QO, then he cannot sign the QO without the Team’s consent, and the Team will continue their Matching rights over him through the following season.

Arbitration of Disputes

The System Arbitrator resolves all disputes that arise relating to the RFA process.

The dispute is submitted to the Arbitrator and resolved within 5 days.

Copies and Notice Requirements

Below are the requirements to deliver all copies of the documents to the necessary parties:

1. Offer Sheet – Offering Team/Player gives to Prior Team. Prior Team gives to the League (same day). The League gives to the NBPA (promptly).
2. ROFR Notice – Prior Team gives Notice to the Player. Prior Team gives Notice to the Offering Team (same day). Offering Team gives Notice to the League (promptly). League gives Notice to the NBPA (promptly).

The specific notice requirements are located at Art. XI(5)(t)-(u), p. 332.