Charlotte Hornets

Some frequently asked questions, terminology as NBA free agency approaches

In the case of soon-to-be free agent Jeremy Lin, the Hornets would likely have to pay him with funds under the cap or through another exception to re-sign him.
In the case of soon-to-be free agent Jeremy Lin, the Hornets would likely have to pay him with funds under the cap or through another exception to re-sign him. jsiner@charlotteobserver.com

The Charlotte Hornets are headed into a complex process when NBA free agency begins July 1. Some frequently asked questions on the terms and conditions that regulate this process:

What are Bird Rights?

In the interest of stability, the NBA grants the team a free agent last played for certain advantages in re-signing him. Most notably "Bird Rights" allow that team to exceed the salary cap to re-sign that player. In addition, the team with Bird Rights can typically offer slightly higher annual raises and an additional guaranteed season that other teams can’t. Boston was the first team to use the exception, exceeding the cap to re-sign 1980s star Larry Bird.

Does every free agent have same Bird Rights?

No. If a player’s last contract was for three or more seasons, then full Bird Rights apply (and this is true whether or not that player was traded in the course of the contract). So, for instance, the Hornets have full Bird Rights in regards to Nic Batum, Courtney Lee and Al Jefferson.

Players coming off a two-season contract are covered under "Early Bird Rights." A team can exceed the cap to re-sign an Early Bird player, but with less latitude as far as how much he can be offered. Hornets power forward Marvin Williams is Early Bird this summer.

Players who played a single season before reaching free agency are under Non-Bird Rights. In the case of Jeremy Lin, that means the Hornets would likely have to either pay him with funds under the cap or through another exception, like the mid-level, in order to re-sign hm.

What is a maximum contract?

The league’s collective bargaining agreement sets a limit on how much a team can pay any one player relative to that season’s salary cap. That is based both on the cap number, which will be about $94 million for each team next season, and the number of seasons that player has played in the NBA. Batum, who has played eight seasons, qualifies for a maximum salary of about $26 million per season under the new cap number.

What are cap holds?

Even when a player becomes a free agent, he still counts for millions against his former team’s salary cap based on that player’s salary from the previous season. Teams have to live with these cap holds until a free agent is either re-signed, signs elsewhere, or his former team renounces the right to sign him with Bird Rights.

For instance, Jefferson and Batum each count roughly $20 million this summer under the Hornets’ cap until their situations are resolved. Right now, the Hornets’ various cap holds for free agents to be represent more than $60 million in cap holds.

What is a moratorium period?

While teams can start negotiating with free agents on July 1, contracts can’t be signed until several days afterward. This is to allow the NBA extra time to precisely set the cap number based on revenue from the previous season.

This offseason, teams can start signing players to contracts July 7. The NBA and the players association agreed to shorten the moratorium period this season. It once was five days longer.

The moratorium could work in the Hornets’ favor this summer. The "dead period" could allow general manager Rich Cho to work out deals with multiple players, then line up those transactions in an order that best makes them work under league rules.

Bonnell: 704-358-5129; @rick_bonnell

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