The term "free agency" refers to the state where a professional sports player can freely seek out employment and contracts with other professional teams. Free agency usually occurs where a player’s contract has expired or the player can opt out of his contract. When a player can participate in free agency, he is called a "free agent." The rules of free agency are different for each sports league and determined by that league’s collective bargaining agreement (CBA).

Different Types of NBA Free Agents

There are two types of free agents in the NBA, unrestricted free agent and restricted free agent.

What’s the Difference between an Unrestricted Free Agent and a Restricted Free Agent?

  • Unrestricted Free Agent– An unrestricted free agent can make ANY deal with any team up to the maximum contract limit. Salary cap rules, or limits a team may spend on player salaries, do not apply if he signs with his old team. However, if he signs with a new team, then salary cap rules do apply.
  • Restricted Free Agent -A restricted free agent can sign with any team but his old team can match any new team’s offer. If the player signs an offer sheet with a new team, the old team has the option of matching or declining to match the offer in 15 days. If the old team does not match the offer, it loses the player without compensation.

What’s the Maximum Amount a Free Agent Can Sign a Contract for?

The maximum amount a free agent can sign for depends on how many years he has played in the NBA. For instance, players who have 0 to 6 years experience can sign a contract up to 25% of the cap. On the other hand, a player with 10 or more years experience can sign up to 35% of the cap. Players who sign with a new team can only sign for a maximum of 6 years while those who sign with their old team can sign for a max of 7 years. You should consult with a sports lawyer or agent to learn more.

What Is the Midlevel Exception?

Currently, a team can use about $5.4 million to resign one of its players or a free agent from another team. This is called the midlevel exception because even if a team is over the salary cap. A team can also use the $5.4 million to sign more than one player.

Do I Need a Lawyer?

Experienced business lawyers or agents are skilled in the art of negotiation. Since professional athletes have only limited time to take advantage of their earning potential, hiring a sports lawyer to handle salary negotiations could help maximize your gain.