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In order to give teams greater leverage in negotiating for their players about to enter free agency, the NBA has a stipulation known as Qualifying Veterans Free Agent Exception which allows the current team to offer a salary that exceeds the salary cap to the player. The rule if also known as the Larry Bird Exception because his looming free agency from the Celtics in 1983 is credited with necessitating the rule change that created it.
Enactment of the Bird Exception
The NBA introduced the first salary caps in 1983, limiting the amount of money that teams could spend on player salaries. The league also included certain exceptions rather than making it a solid ceiling. At the time Larry Bird’s contract with the Celtics was in its final year, which would give him the chance to taste free agency for the first time.
It was stipulated in that year’s CBA that if a player had been on a team’s roster for three or more consecutive seasons, that team can offer the player a higher salary even if it pushed the team’s salary spending beyond the allowed maximum. Essentially, this allowed the player’s current team to offer more money than other teams that may be interested to sign him.
Within the CBA there are also further exceptions such as the “Early Bird” which applies to players who have been with a team for two seasons and the “Non-Bird” which applies to players who do not qualify for either the Bird or Early Bird Rights. With these exceptions though, the team cannot offer a player a maximum salary if it surpasses the salary cap.
Bird and Early Bird Rights are transferable if a player moves to a new team before expiry of the contract. As such he can be able to negotiate with the new team as a qualified veteran. Early Bird Rights remain even if the player has been waived and moved to another team before clearance of his waiver. This is made possible by a 2012 ruling in which Jeremy Lin was allowed to retain the rights when the Knicks claimed him on waiver.
Although Bird’s contract situation was one of the reasons that the NBPA and the NBA passed the Bird Exception, Bird himself did not benefit from it in 1983. Instead the forward signed a contract under the unedited CBA before the 1983 season began. The salary cap went into effect during the 1984/85 season hence Bird’s contract remained unaffected by the cap. The first time that Bird got to exercise the rights named after him was in 1988.
Although Bird’s contract situation was one of the reasons that the NBPA and the NBA passed the Bird Exception, Bird himself did not benefit from it in 1983. Instead the forward signed a contract under the unedited CBA before the 1983 season began. The salary cap went into effect during the 1984/85 season hence Bird’s contract remained unaffected by the cap. The first time that Bird got to exercise the rights named after him was in 1988. Larry Bird would go on to play his entire career with the Boston Celtics.
