Eligibility
Dates of Eligibility
A Player’s Contract cannot be renegotiated from March 1st through June 30th.
Player Eligibility
Only Player Contracts covering 4+ Seasons may be renegotiated.
Player becomes eligible on the third anniversary of the signing of the Contract, with the following exceptions:
- Extension – If the Original Contract was extended, then he is eligible on the third anniversary of the signing of the Extension.
- Prior Renegotiation – If the Original Contract was already renegotiated with an increase of 5% or more of Salary/Incentive Compensation, then he is eligible on the third anniversary of the Renegotiation.
- Trade Bonus Amended – If a Trade Bonus was waived/reduced, then the Player can’t renegotiate until six months from the Trade (or the dates above, if later).
Contract Terms
Compensation
Increase in Compensation
The Renegotiation can include an increase in Regular Salary and Performance Bonuses for the then-current Salary Cap Year.
The Renegotiation may provide for additonal Performance Bonuses that were not in the Original Contract.
The amount of Regular Salary and Performance Bonuses may not exceed the Team’s Cap Space at the time of Renegotiation.
Decrease in Compensation
A Renegotiation cannot decrease a Player’s Salary/Incentive Compensation.
With one caveat, the CBA prohibits any ability for a Player and Team to agree to lower the Player’s already agreed-to Compensation in an existing Contract, even if they would like to do so as part of a longer Extension.
The one caveat – If there is an Option. The Option can be declined and lesser Compensation can take the place of that Option Year, which would be executed as part of an Extension. For example, Draymond Green declined his $27.5 million 2023-24 Player Option to sign a longer term contract. The contract reduced his 2023-24 Salary to $22.3 while agreeing to an Extension that would pay him more over the long-term (4 years, $100 million thorugh 2026-27).
Renegotiations and Maximum Salary
The Maximum Salary rules apply, but a Player may not qualify for an increase in percentage of the Salary Cap based upon hitting the Higher Max Criteria.
Annual Raises
Each category that is increased (Regular Salary, Likely Bonuses or Unlikely Bonuses), must be increased for each remaining Season in the Contract.
The annual raises are limited to 8% for each category.
Signing Bonus Prohibited
Signing Bonuses are prohited as part of a Renegotiation unless part of a Renegotiation-and-Extend, discussed below.
Renegotiate-and-Extend
Generally
If the Player is eligible for both a Renegotiation and an Extension, then both can be signed simultaneously as part of a Renegotiate-and-Extend.
In addition to the obvious fact that the Player will earn more money in the last year of his Original Contract, the Renegotiate-and-Extend provision provides flexibility for a Team in two common scenarios.
Scenario #1 – Increases Extension Offer
Because the Extension rules limit most Extensions to a 140% increase of Prior Salary, a Team may not be able to offer a Player his actual value in an Extension if his Prior Salary is too low. A Renegotiation allows a Team to bump the last year of his Salary to increase the total amount offered in an Extension.
This is the more common scenario used to extend Players without the risk of them going to Free Agency (e.g. Jaren Jackson, Jr. in 2025).
Scenario #2 – Pay More Up-Front to Clear Team Salary in the Future
If a Team has Cap Space now, but knows other Extensions will significantly increase their Team Salary in the future, they can increase a Player’s Salary up-front and drop his Salary in future Seasons to lessen Team Salary for other signings. The Player will still earn the same amount, but will get more money up front. A win for both sides (e.g. Jonathan Isaac in 2024).
Decrease in Extended Term
Regular Salary
Salary less Incentive Compensation in the first year can decrease by up to 40% of the Regular Salary the the last year of the Original Contract (as renegotiated).
In 2024, Jonathan Isaac agreed to a Renegotiate-and-Extend with the Magic adding 4 Seasons to his Original Contract. The last year of his Original Contract increased from $17.4 million to $25 million. Year 2 then dropped from $25 million to $15 million, which is the maximum 40% decrease. While the Magic had plenty of Cap Space in 2024 to work with, the drop in Salary gives additional flexibility to plan for the Extensions of Franz Wagner and Paolo Banchero.
Incentive Compensation
If there is Incentive Compensation in the Original Contract and it was renegotiated, then Likely Bonuses and Unlikley Bonuses can each decrease by 40% in the first year of the extended term.
Trade Restrictions
There is not a Renegotiate-and-Trade rule in the CBA.
A Player who signs a Renegotiation cannot be traded for six months.