How does a buyout work in NBA and why do teams buy players out of their contracts?

NBA buyouts are very important for both teams and players. These moves allow teams to be financially flexible and free up a roster spot, while allowing players to sign with another team.

Russell Westbrook, who was recently traded to the Utah Jazz, will most likely be bought out. This means that his contract with the team will be terminated and that he'll become a free agent.

Westbrook's situation is hardly unique. Many other players have been bought out by their teams and gone on to find a new home. Some of them even won championships with their new teams.

NBA buyouts give flexibility to both players and teams

NBA teams cannot simply terminate contracts they don't like. Unless teams can come to a mutual agreement (a buyout) with the player in question, they have to pay the amount owed.

A buyout is a mutual agreement between a team and a player to terminate a contract. However, the player who is bought out receives a portion of the money owed on his contract.

Russell Westbrook is will likely be bought out in the 2022-23 season (Image via Getty Images)

In Russell Westbrook's example, both the point guard and the Utah Jazz have to be willing to do a buyout. Westbrook would receive a portion of his salary for the season and the Jazz would free up a roster slot.

You may be interested in reading: What do pick swaps mean in NBA and how are they useful for franchises?

If he gets bought out, the veteran point guard will have to wait 48 hours to clear waivers and become a free agent. As a free agent, Westbrook will be able to sign with any team and receive a new contract.

Players become free agents after teams buy them out (Image via Getty Images)

It's important to note that buying players out and waiving them is not the same process. While a buyout requires a mutual agreement, waiving is done by the team. However, players who are waived receive the full amount of money they are owed, which is why teams prefer to buy out players with large contracts.

The buyout season begins shortly after the NBA trade deadline passes.

Several NBA players won a championship after teams bought them out

Boris Diaw signed with the San Antonio Spurs after the Charlotte Bobcats cut him in 2012. Two years later, the French swingman won a championship as the Spurs beat the Miami Heat.

Markieff Morris agreed to be bought out by the Detroit Pistons in 2020. The forward then joined the LA Lakers and won a championship.

Boris Diaw won it all with the Spurs in 2014 (Image via Getty Images)

You may be interested in reading: 5 NBA players who didn't deserve to win the MVP award featuring Derrick Rose, Kobe Bryant, and more

If the Jazz buy Westbrook out, he may go on to achieve a lot of success as well. While he is definitely not worth $47 million, he could be a perfect bench player for a title contender.