The CBA Glossary

An explainer thing for the NBA's Collective Bargaining Agreement

Average salary

In the NBA, the “Average Player Salary” is a thing. A tangible thing that matters.

The Average Player Salary is calculated as the total salaries paid, divided by an amount equal to the product of the number of Teams in the NBA in such Salary Cap Year (other than Expansion Teams during their first two (2) Salary Cap Years) multiplied by thirteen and two-tenths (13.2).

There is also a thing called the “Estimated Average Player Salary”. This means, for any particular salary cap year, 104.5% of the prior salary cap year’s Average Player Salary.

As for why it matters:

A Qualifying Veteran Free Agent, other than a Qualifying Veteran Free Agent described in Section 4(d)(1)(ii) below, will be included at one hundred fifty percent (150%) of his prior Salary if it was equal to or greater than the Estimated Average Player Salary for the prior Salary Cap Year, and one hundred ninety percent (190%) of his prior Salary if it was less than the Estimated Average Player Salary for the prior Salary Cap Year.

A Qualifying Veteran Free Agent following the second Option Year of his Rookie Scale Contract will be included at two hundred fifty percent (250%) of the player’s prior Salary if it was equal to or greater than the Estimated Average Player Salary for the prior Salary Cap Year, and three hundred percent (300%) of his prior Salary if it was less than the Estimated Average Player Salary for the prior Salary Cap Year.

(3) (i) If the player is an Early Qualifying Veteran Free Agent, the new Player Contract must cover at least two (2) Seasons (not including a Season covered by an Option Year) and, subject to Article II, Section 7, may provide in the first Salary Cap Year up to the greater of: (A) one hundred seventy-five percent (175%) of the Regular Salary for the final Salary Cap Year covered by his prior Contract, plus one hundred seventy-five percent (175%) of any Likely Bonuses and Unlikely Bonuses, respectively, called for in the final Salary Cap Year covered by the player’s prior Contract, or (B) Salary plus Unlikely Bonuses totaling an amount equal to one hundred five percent (105%) of the Average Player Salary for the prior Salary Cap Year (or if the Audit Report for the prior Salary Cap Year has not been completed, one hundred five percent (105%) of the Average Player Salary for the prior Salary Cap Year as computed by substituting Estimated Total Salaries (as defined in Section 1(i) above) for Total Salaries). Annual increases and decreases in Salary and Unlikely Bonuses shall be governed by Section 5(a)(2) above.

(3) (i) Subject to Article II, Section 7, a Player Contract extended in accordance with this Section 7(a) (other than an Extension entered into in connection with a trade pursuant to Section 8(e)(2) below or a Designated Veteran Player Extension) may, in the first Salary Cap Year covered by the extended term, provide for a Salary, excluding Incentive Compensation, of up to the greater of: (A) one hundred forty percent (140%) of the Regular Salary in the last Salary Cap Year covered by the original term of the Contract; or (B) one hundred forty percent (140%) of the Estimated Average Player Salary for the Salary Cap Year in which the Extension is signed (or, if the Extension provides for any Incentive Compensation in the first Salary Cap Year covered by the extended term, then one hundred forty percent (140%) of the Estimated Average Player Salary for such Salary Cap Year less the amount of such Incentive Compensation). In the event that the last Salary Cap Year covered by the original term of the Contract provides for Incentive Compensation, the first Salary Cap Year covered by the extended term may provide for Likely Bonuses and Unlikely Bonuses of up to one hundred forty percent (140%) of the Likely Bonuses and Unlikely Bonuses, respectively, in the last Salary Cap Year covered by the original term. Annual increases and decreases in Salary and Unlikely Bonuses shall be governed by Section 5(a)(3) above.

B) If such Extension is signed on or after the first day of the 2024-25 Salary Cap Year, then the Extension may, in the first Salary Cap Year covered by the extended term, provide for a Salary, excluding Incentive Compensation, of up to the greater of: (A) one hundred twenty percent (120%) of the Regular Salary in the last Salary Cap Year covered by the original term of the Contract; or (B) one hundred twenty percent (120%) of the Estimated Average Player Salary for the Salary Cap Year in which the Extension is signed (or, if the Extension provides for any Incentive Compensation in the first Salary Cap Article VII 253 Year covered by the extended term, then one hundred twenty percent (120%) of the Estimated Average Player Salary for such Salary Cap Year less the amount of such Incentive Compensation). In the event that the last Salary Cap Year covered by the original term of the Contract provides for Incentive Compensation, the first Salary Cap Year covered by the extended term may provide for Likely Bonuses and Unlikely Bonuses of up to one hundred twenty percent (120%) of the Likely Bonuses and Unlikely Bonuses, respectively, in the last Salary Cap Year covered by the original term. Annual increases and decreases in Salary and Unlikely Bonuses shall be governed by Section 5(a)(4) above.

A Veteran Player who has been reinstated pursuant to this Section 13 shall, immediately upon such reinstatement, notify the Team to which he was under contract at the time of his dismissal and disqualification (the “previous Team”). Upon receipt of such notification, and subject to Section 13(g)(iii) below, the previous Team shall then have thirty (30) days in which to make a Tender to the player with a stated term of at least one (1) full NBA Season (or, in the event the Tender is made during a Season, of at least the rest of that Season) and calling for a Salary in the first Season covered by the Tender at least equal to the lesser of (A) the player’s Salary for the Salary Cap Year in which he was dismissed and disqualified, or (B) the Estimated Average Player Salary during the then-current Season, in either case reduced on a pro rata basis if the first Season covered by the Tender is a partial Season, but not greater than the Salary provided in Section 13(g)(iv) below. If the previous Team makes such a Tender, it shall, for a period of one (1) year from the date of the Tender, be the only NBA Team with which the player may negotiate and sign a Player Contract. If the player does not sign a Player Contract with the previous Team within the year following such Tender, then the player shall thereupon be deemed a Restricted or an Unrestricted Free Agent, in accordance with the provisions of Article XI. If the previous Team fails to make a Required Tender, the player shall become an Unrestricted Free Agent.