Question

List and explain at least three exceptions that exist in the NBA collective bargaining agreement that permit teams to spend beyond the league salary cap

Answer 1

NBA collective bargaining agreement is the agreement between the NATIONAL BASKETBALL ASSOCIATION and the NATIONAL BASKET BALL PLAYER ASSOCIATION. NBA's salary cap is the extend to which the NATIONAL BASKET BALL ASSOCIATION are allowed to pay money for their players. There are two type of salary caps namely hard salary caps and soft salary caps.Where hard salary caps didnot allow teams from going above the salary caps where soft caps allows team to go above the salary caps. NBA's salary cap is a soft one so it permit teams to spend beyond the league salary cap.

The following are the exceptions

Minimum salary exception

For NBA team can sign player for minimum salary even if they are above the cap for up to 2 years deduction. For 2 year contracts, the second season salary is the minimum salary for that season. By this exception players can be acquired via trade. There is no signing bonus for contract and there is no limit to number of players who can sign or who uses this exception.

Trade exception

Trade exception is created when one team trades away more salary than they get in return. But a team cannot trade which have $100000 above salary cap in any way whether the trade decrease or increase their overall payroll and need exception to do so. The exception grant a team to trade for any player or number of players as thier collective salary does not exceed a set amount which decided by luxury tax if payable and outgoing salary.

Disabled player exception

This exception allow team to replace an injuired or died player ( for in season) or if disability occurs when its is off season ( for next season) . The replacement player maximum salary either 50% of the injuired player salary or the mid- level exception for a non- tax paying team which ever is lesser is taken into consideration. This exception must be verified by NBA designated doctor and can sign for player for 5years.