Draft Rules Generally

If a Player is Eligible for the Draft, then he will be a part of the Draft process the year that he is Eligible.

If the Player is drafted, then the Team that Drafted him has Draft Rights to the Player and will have exclusive rights to the Player so long as the process below is followed.

If the Player goes undrafted, then he becomes a Rookie Free Agent, and is able to sign with any Team.

Process After Drafting Player

“Draft Rights” Attach

Generally

Upon drafting the Player (the “Draftee”), the Team will have exclusive negotiating rights (commonly known as “Draft Rights”) with the Draftee.

These are the events that can occur after drafting the Player:

1. Draftee signs a Contract with Team (most common);
2. Team issues Required Tender, extending Draft Rights through the Subsequent Draft;
   • If Draftee does not sign the Required Tender or a Contract, then he is eligible for the Subsequent Draft;
3. Team fails to issue Required Tender, allowing Draftee to become a Rookie Free Agent;
4. Draftee signs a Non-NBA Contract, extending the Team’s Draft Rights for another year.

Renouncing Draft Rights

The Team can renounce its Draft Rights over the Draftee at any time prior to a Required Tender. Once the Required Tender is made, the Draftee’s consent is required to withdraw.

A Team does not lose Draft Rights if renounced to create Room for an Offer Sheet, in certain circumstances, detailed here.

Draft Rights and Team Salary

Draft Rights for First Round Picks become a Cap Hold on a Team’s Team Salary until signed to a Contract. Click here for details.

The Required Tender

The Drafting Team must make a Required Tender to retain its Draft Rights. If no Required Tender is made, the Draftee becomes a Rookie Free Agent.

Below are the Deadlines and Substance requirements for the Required Tender.

Deadline for Required Tender

Below are the deadlines to submit a Required Tender:

1. First Round Pick – July 15th after the Draft;
2. Second Round Pick – August 5th after the Draft.

Substance for Required Tender

Below are the requirements of the Required Tender, which is dependent on whether the Player is a First or Second Round Pick:

First Round Pick

1. Allow the Draftee to accept until the first day of the following Regular Season; and
2. Satisfies the requirements of the Rookie Scale Contract.

Second Round Pick

1. Allows the Player to accept until the earlier of (i) 4 days before the first day of the following Regular Season, or (ii) the immediately following October 15th;
2. Has a stated term of one Season; and
3. Is for at least the Minimum Salary applicable for the Player.

Physical Examination Contingency

The Team can include a Physical Exam contingency in the Required Tender.

If the Player fails the physical exam, then the Team has two business days to elect to withdraw the Required Tender and have such consequences as not having made it.

Withdrawal of Required Tender

A Team may withdraw a Required Tender at any time, but only with written consent from the Player. The Player becomes a Rookie Free Agent upon such withdrawal.

Waiver of Second Round Picks

If the Second Round Pick Draftee signs his Required Tender and is subsequently waived, the Team retains its Draft Rights to negotiate with and sign (or convert) the player to a Two-Way Contract for the Season covered by the Required Tender.

No Required Tender Made

A Draftee becomes a Rookie Free Agent if the Drafting Team does not make a Required Tender, or has otherwise not signed a Contract with the Team or Non-NBA Contract.

The Draftee becomes a Rookie Free Agent the day after the deadline of the Required Tender.

A First Round Pick that becomes a Rookie Free Agent is no longer subject to the Rookie Scale Contract requirements.

Non-NBA Contracts

Purpose of Rule

This rule eliminates the Draftee’s ability to sign with another League and reenter the draft next year because he doesn’t like the Team that drafted him. If you sign with another professional team, then the Team that drafted you retains Draft Rights. Therefore, a Draftee’s only option would be to sit out of professional basketball altogether for an entire year.

Draft-and-Stash Strategy

This rule also leads to drafting-and-stashing players, which often takes place when a Team drafts a Player from overseas who isn’t ready to play in the NBA yet.

It allows the Team to draft the Player, retain his Draft Rights, but not have his Contract count toward their Team Salary while he continues to develop overseas.

Triggering the Rule – A “Non-NBA Signing”

If the following elements occur, then the Non-NBA Contract Rules below apply:

1. Drafted by NBA Team in Initial or Subsequent Draft;
2. While the Team’s Draft Rights are triggered, the Draftee is already a party to or signs one of the following:
   • A Non-NBA professional basketball contract;
   • Player contract with a professional bball team or league not in the NBA;
3. The Non-NBA Contract covers all or any part of the NBA Season immediately following the applicable Draft.

Non-NBA Contract Definition

A Team or league that agrees via contract to pay money to Player (in excess of a stipend for living expenses) for rendering services to the Team/League.

Extension of Draft Rights

When a Non-NBA Contract is signed triggering the rule, a Team retains its Draft Rights for one year from the earlier of the following:

1. The date the Draftee (i) has no legal impediment stopping him from signing and playing with the Drafting Team for the then-current season (if applicable) and (ii) the Draftee provides notice to the Team he is free to sign with the Team; or
2. The date of the NBA Draft occurring in the 12-month period from August 1st to July 30th, provided the Player gives his intention and availability to play in the NBA for the then-current Season and there is no legal impediment to him doing so.

New Required Tender After Extension of Draft Rights

If the rule triggers an extension of Draft Rights, the Team must issue a Required Tender by August 10th the following year to retain its Draft Rights in Year 2.

The Team’s rights depend on whether the Draftee has new Non-NBA Contract obligations or not.

No New Non-NBA Obligations

If (i) by July 1st the Player notifies the Drafting Team that (i) by August 1st he will be under no contractual/legal impediment to sign and play immediately thereafter or for future Seasons (and that is indeed the case):

• Tender Not Made – Failure to provide a timely Required Tender renders the Draftee a Rookie Free Agent;
• Tender Made – If the Draftee does not sign the Required Tender, then the consequences depend on which Draft occurred:
  • Initial Draft – If it was the Player’s Initial Draft, then the next draft is the Subsequent Draft and you follow the rules regarding Draftees entering the Subsequent Draft;
  • Subsequent Draft – If it was the Player’s Subsequent Draft, he becomes a Rookie Free Agent when the Draft Rights expire.

New Non-NBA Obligation

If the Player enters into a new Non-NBA obligation, the following rules apply:

1. If the Required Tender is made or the Player makes no bona fide effort to negotiate, then the Drafting Team retains Draft Rights for another year, with the clock starting using the same method as the initial Exclusivity Period above.
2. If the Player made a bona fide effort to negotiate and no Required Tender was made, the Player becomes a Rookie Free Agent after the Team’s deadline to make the Required Tender.

Signing NBA Contract During NBA Regular Season

If a Player has a Non-NBA Contract, he can sign his Rookie Scale Contract from February 1st through June 30th to be effective beginning the following Season.

The Player is to receive the Rookie Scale Amount for the Season for which he signs. The Contract will state the percentage of the Salary Cap the Draft Pick is to receive, rather than a fixed amount.

Note that a Player can sign his Rookie Scale Contract while still under a non-NBA Contract, provided it expires prior to the effective date of the Rookie Scale Contract.

The Subsequent Draft

Subsequent Draft Eligibility

If after the Initial Draft (i) the Drafting Team made a Required Tender, (ii) the Draftee never signed a Contract or a Required Tender and (iii) the Draftee never signed a Non-NBA Contract, then he is eligible to be drafted in the Subsequent Draft.

Draft Rights After Subsequent Draft

The Second Team has Draft Rights (from date of Subsequent Draft to the next Draft) with the Draftee when drafting him in the Subsequent Draft if the following elements are satisfied:

1. Player was drafted in the Initial Draft;
2. Player received a timely Required Tender from the Team that initially drafted him;
3. Player did not sign a Contract with the team that initially drafted him;
4. Second Team makes a timely Required Tender as set forth above after the Subsequent Draft.

Timeline After Subsequent Draft

After the Subsequent Draft, the Second Team follows the same rules above as if it were the Initial Draft. The only difference happens when the Draftee again remains unsigned until the third draft (i.e. the draft after the Subsequent Draft).

Undrafted/Unsigned After Subsequent Draft

If the Team that drafted him in the Subsequent Draft (see above) also does not sign him to a Contract after making the Required Tender, the Player becomes a Rookie Free Agent as of the date of the next NBA Draft after the Subsequent Draft.

If the Player isn’t drafted in the Subsequent Draft after receiving a Required Tender in the Initial Draft, then he becomes a Rookie Free Agent immediately upon the conclusion of the Subsequent Draft.

Adjustment for Early Entry Players

If the Player is an Early Entry Player, then the above rules are adjust in the following ways:

Does not Play College Basketbal

If he doesn’t play college basketball again, then the Subsequent Draft is the Draft he would have been eligible for if not an Early Entrant.

Plays College Basketball

If he plays college basketball again, the Drafting Team retains Draft Rights (if Required Tender is given) and the draft he would have been drafted in if not an Early Entrant will be considered the “Initial Draft” for the rules above.

Player is Undrafted

If the Player is Eligible and went undrafted, then he becomes a Rookie Free Agent. A Rookie Free Agent is free to sign with any Team immediately upon the conclusion of the Draft.

The Team has no Exception for a Rookie Free Agent, and must use Cap Space or an available Exception to sign the Player (oftentimes undrafted Players will sign an Exhibit 10, Two-Way or potentially a Minimum Contract).