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After an incredible series this post season, we now look forward to free agency that begins on July 1st. A lot relies on the upcoming month and it is essential that we understand what free agency terminologies truly mean. The NBA draft is a platform for rookies to get chosen and start their career in the NBA. On the other hand, Free Agency involves existing NBA players who have an opportunity to sign up new contracts with a team.
Here are some of the terms that you need to know about the Free Agency:
Unrestricted Free Agent (UFA)
An unrestricted free agent is at liberty to sign a contract with any team. However, players could have certain clauses in their contracts that may impact their decisions.
Options
An option simply gives the controlling party the right to extend their contract for one more season at a salary which is not lesser than the prior year’s amount.
- Team Option
The team option grants the original team the right to retain a player for another year. If the option is refused, the player becomes an UFA.
- Player option
A player option gives the player the power to decide whether he would like to stay in the team for another year or become a completely unrestricted free agent.
- Early Termination Option
The early termination option gives the player the right to end a signed contract before its original expiration date. If the player declines to exercise this option, he remains with the original team. If the option is exercised, he becomes an unrestricted free agent.
Restricted Free Agent (RFA)
A restricted free agent can sign an offer sheet with any team. However, the current team has a “Right of First Refusal”. This means that the current team reserves the right to match the offer presented by the other team and retain the player. The current team has three days to match the offer or else they lose the player to the new team.
July Moratorium
The July Moratorium is a period at the start of each NBA season during which the teams aren’t allowed to make trades or sign free agents. The dates for the July Moratorium this year will be 1st July 2015 to 8th July 2015. The free agents are allowed to negotiate deals with teams during this period, and can even agree to new contracts but they cannot officially sign a new deal until the moratorium ends.
The moratorium has a core purpose to it. As dictated by the Collective Bargaining Agreement (CBA), the salary cap, luxury tax and the like are built off the actual Basketball-Related Income (BRI) from the previous season.
Since the season ends so close to free agency, the moratorium serves as the audit period to figure out the final numbers from the previous season that the teams can work with for next season.
NBA’s new television deal is expected to inject a big amount of money into the cap this year. If everything works out well, we may see a significant rise in the salary cap which could enable teams to add more star power to their already star studded teams.
