NBA Free Agency Glossary: What are Bird Rights?

“Bird rights” is a colloquial term for qualifying veteran free agents under the CBA’s Veteran Free Agent Exception provision. Salary cap exceptions allow teams to exceed the salary cap if certain criteria are met, and “Bird Rights” permit teams to retain their own free agents beyond the salary cap. The exception’s namesake is Boston Celtics legend Larry Bird, and it has become one of the most important and influential mechanisms in the modern NBA. 

The historical context of ‘Bird Rights’

Understanding why “Bird Rights” exist in the first place, goes a long way in understanding their function. The NBA was not on solid financial ground in the early 1980s. Player salaries had grown to outpace the value of teams, and the gap between the haves and have-nots threatened the financial viability of the league. The owners’ solution to their dire economic outlook was the sports world’s first salary cap. However, that solution led to a serious problem. What about Larry Bird?

The original salary cap, installed for the 1984-85 season, was conceived as a hard cap that no team could exceed, but according to Jim Quinn, former outside counsel to the NBA Players Union, right as the owners had agreed in principle to a salary cap, “Alan Cohen, who was part of the group buying the Celtics, said, ‘I’m not going to agree to the deal unless I can be assured that under any circumstances, I can keep Larry Bird.’” And with that single quip, the “Bird exception” was born, softening the NBA’s hard cap before it had even set.

The owners would eventually agree to a salary cap, but only if they could exceed the cap to re-sign their own free agents. While Larry Bird was the go-to example for the exception, it was actually his teammate, Cedric Maxwell, who was the first player re-signed using “Bird Rights.”

How ‘Bird Rights’ work in the modern NBA

Since the early 1980s, the NBA has undergone countless changes and collective bargaining agreements (CBA), but “Bird Rights” have stood the test of time. In today’s CBA, to qualify for “Bird Rights,” a player has to be a qualifying veteran free agent who has played under one or more contracts covering some or all of the three preceding seasons for the same team.

A player’s “Bird Rights” remain intact if they change teams via trade or waivers. The simplest way of thinking about it is a player cannot sign as a free agent with a new team over a three-year period to have “Bird Rights.” Another provision that hasn’t been relevant in recent years but could be important soon is players selected through an expansion draft also retain their “Bird Rights.”

When a player is signed using “Bird Rights” they can receive a first-year salary up to a maximum contract plus unlikely incentives, and deals can be for no longer than five seasons. A modern example of the power of “Bird Rights” is the Philadelphia 76ers handling of Tyrese Maxey. Instead of extending Maxey in the summer of 2023 to a massive contract that would kick in for the 2024-25 season, the Sixers have waited to hand him a new contract. Now, they can add free agents and players through trade with all the cap space not having Maxey on the books for 2024-25 affords them, and can then re-sign Maxey beyond the salary cap using “Bird Rights” once those additions are made.  

‘Early Bird’ exception

Another Veteran Free Agent Exception is the “Early Bird” exception, or the Early Qualifying Veteran Free Agent exception. Similar to the ‘Bird exception,’ it allows teams to exceed the salary cap to re-sign their own free agents, but it is only for players who have been with the same team for two seasons or have only changed teams via trade or waivers. The qualifications are identical to “Bird rights,” except it’s for two seasons and not three. 

However, player contracts using the “Early Bird” exception are more limited. Contracts must be for at least two seasons, not including options, but can be no longer than four seasons. First-year salary is also limited to 175 percent of the value of their previous season’s salary or 105 percent of the Average Player Salary for the previous Salary Cap year. Usually, “Early Bird” contracts are sought out by solid rotation players and not stars because of the salary and contract length limitations. 

Due to the positive financial implications of a player having “Bird or Early Bird” rights, the CBA has a small protection for players on one-year contracts. According to the CBA, “A player (other than a Two-Way Player) with a one-year Contract, excluding any Option Years, who would be a Qualifying Veteran Free Agent or an Early Qualifying Veteran Free Agent upon completing the playing services called for under his Contract cannot be traded without the player’s consent.”

Teams and players can negotiate this protection out of contracts. The CBA is protecting players on one-year deals who would qualify for either “Bird exception” from going to situations where the player believes their “Bird Rights” would be destroyed through release or are unlikely to be utilized as a free agent. 

The “Bird exception” is arguably the single most important feature of the NBA. It’s what gives the league its soft cap and allows teams to retain their best players without having to gut their rosters. The mechanism is a boon for players and teams alike and is one reason why the NBA trade market has become so wild.