The NBA trade deadline isn’t necessarily designed to cater to true contenders. Oftentimes those teams are short on trade assets because those assets were spent building a contender in the first place. They usually lack tradable salary because their highly-paid players are all essential parts of their rotation.
That isn’t to say that winning teams don’t make trades in February. It’s just that only a few of them have produced championships. The blockbusters that sent Marc Gasol to the Toronto Raptors and Rasheed Wallace to the Detroit Pistons are the exception.
The buyout market, on the other hand, is the rule. Markieff Morris was an essential component of the Lakers’ championship run last season. P.J. Brown got the 2008 Boston Celtics into the Eastern Conference finals. Boris Diaw landed with the San Antonio Spurs in 2012 and wound up staying as a critical reserve on their 2014 championship team. These are the most famous examples, and not every champion or finalist makes a meaningful addition in the middle of the season, but it is the avenue of roster-building that is most often available to the best teams, and is therefore the one that they most often at least attempt to use.
But every team in the playoff hunt wants to get better. Not everyone has the means to do so through a trade. But almost anyone can pluck midseason free agents with the right recruiting pitch. The blockbusters may stop on Thursday, but teams are far from finished constructing their rosters.
So how will they go about it? What exactly is the buyout market, and how will teams use it in pursuit of a championship? This trusty guide should answer any and all questions on the subject. Below is your 2020 buyout market primer.
How do buyouts work?
A buyout occurs when a player and team mutually decide to part ways. The player surrenders an agreed-upon amount of his guaranteed salary, and in exchange, is released and allowed to sign with any other team as a free agent. If a team buys a player out, he cannot re-sign with or be claimed off of waivers by that team for one year or until the end of the contract that was bought out, whichever comes later.
That clause typically lasts one year, though, as buyouts on multi-year deals are a rarity (though Blake Griffin was an exception this season). Typically, the kind of player that gets bought out fits the following criteria:
- Is in the final year of his contract.
- Is a veteran whose age, injury history, declining skills or positional redundancy limits his original team’s interest in retaining him as a free agent in the upcoming offseason.
- Is currently on, or was traded to before the deadline, a lottery team that has little to gain by employing such a veteran for the remainder of a season.
The motivations are simple for both sides. The team is able to save a bit of money. The player is allowed to pick a new team that better suits him at that moment. Usually, they are motivated either by a desire to compete for a championship or a chance to prove their value to a winner ahead of their impending free agency.
What timeline does the mid-season free agency market generally follow?
Buyout negotiations typically begin in earnest once the trade deadline has passed. At that point, teams know for certain who has and has not been traded and what needs they still have to fill. News began pouring in almost immediately at 3 p.m. ET about who could hit the market and where they might land.
Not all buyouts are negotiated overnight, though. While the trade deadline was on March 25, teams have several weeks to decide whether or not they want to buy out their players. In a normal season, the unofficial deadline to do so is March 1, as that is when bought out players must have signed with new teams in order to be eligible for the playoffs. This season, that date has been moved to April 9. This restriction only applies to players who have been bought out, though. Players who were not under contract with another team earlier in the season are eligible for the postseason as long as they sign by the end of the regular season.
How can teams afford to sign free agents in the middle of the season?
Only two NBA teams are currently below the salary cap. The New York Knicks have $13.5 million in space, and the Charlotte Hornets have roughly $1.8 million. Both would certainly like to add talent ahead of their playoff pushes, but typically, the best players join teams that are closer to winning championships.
Most buyout contracts are worth the minimum salary. From a cap perspective, that means that most buyout contracts are worth the same amount, which would be a pro-rated portion of the minimum salary for a second-year player (as the league reimburses teams for the extra salary of older players to prevent teams from intentionally targetting younger ones). For the whole season, that would be around $1.62 million, but the actual amount paid to a player and counted beneath the cap depends on when the contract is signed. This regular season is 146 days long. The trade deadline falls on the 93rd day of the season. Therefore, a player would receive roughly 36.3 percent of that minimum figure if he signed with a new team on deadline day, and slightly less with each passing day.
Under normal circumstances, almost any team can sign as many minimum-salaried players as they’d like, provided it has the roster spots to fit them. This season, is something of an oddity, though. A staggering 18 teams are hard-capped at the apron ($138.928 million) for some reason or another. Some are so far beneath the line that it functionally doesn’t matter. Others are so precariously close that they lack the flexibility to sign anyone. Teams must have a total of 14 players on their roster when the dust clears, and if you see teams trading minimum-salaried players for nothing, that is often why. When you trade a player, you offload their entire salary, and can therefore replace him with a pro-rated minimum player that counts for significantly less against the hard cap.
While the minimum salary is the baseline for buyout players, a number of contenders have a major financial advantage over the competition in the form of cap exceptions. There are three primary forms of exceptions that come into play with mid-season free agency. The first is the mid-level exception. Most contending teams spend their entire exception during the offseason’s free agency. A few, however, save some or all of it for use during the regular season. The following potential playoff teams saved a portion of their Mid-Level Exception big enough to make an offer above the pro-rated minimum to bought-out free agents, via HoopsHype’s Yossi Gozlan:
These exceptions pro-rate slightly, but not at the rate of a minimum-salary deal. As there are 146 days in this regular season, these figures all lose 1/146th of their value with each passing day. The second major exception is the bi-annual exception. As its name suggests, it can be used every other year. Like the mid-level exception, it prorates daily, but considering its size, it is rarely divided amongst multiple players. That means that the 16 teams that have it all have the same amount to spend: $2.9 million. Notable contenders that have yet to spend their bi-annual exception include the Celtics, Clippers, Heat, Suns, Blazers and Jazz.
The last major type of exception on the table is the disabled player exception. Teams are eligible to apply for a DPE when one of their players gets injured. If a league-approved doctor deems that player unlikely to be healthy by the end of the league year, the team is granted a cap exception that can be used in free agency or trades worth half of that player’s salary or the Non-Taxpayer Mid-Level Exception, whichever is lower. Unlike the other exceptions mentioned, Disabled Player Exceptions do not prorate. The following potential playoff teams have Disabled Player Exceptions:
Money is rarely the deciding factor for a free agent who has been bought out, but it never hurts. Conversely, just having this money doesn’t mean every team will spend it. Several of the teams listed here have to contend with the luxury tax, or won’t be able to recruit a top player, or simply won’t have any interest in altering their existing roster. The money is merely a tool at their disposal. It is up to them to make the most of it.
Who are the top potential buyout candidates this season?
This list is simultaneously incomplete and overstuffed. Ultimately, there is no set formula that leads to a buyout, so we’ll try to use the criteria above while also establishing a few other categories to watch. There will be notable players to get buyouts that are not listed here. There will also be plenty of players on this list that don’t get bought out. But on paper, these are the players to watch in midseason free agency, either because they have already changed teams, or because there is a chance they still might.