How it Works: The 10-Day Contract

Beginning last Tuesday, January 5th teams could enter into 10-day contracts with free agents. The basics of 10-day contracts are easy enough: they last for 10 days, they are for a relatively small sum of money, and teams use them to fill holes in their line-ups, especially when injuries arise. This post will lay out the details of a 10-day contract with a little more specificity and discuss how 10-day contracts affect a team’s cap sheet.

10-Day contracts are for the minimum salary and cannot be less than the minimum salary. However, because the contract is only for a short amount of time, the actual salary associated with the contract is a pro-rated minimum based on the contract’s length in days. In other words, a 10-day contract is typically 1/17th of the minimum salary for any such player.[1] Minimum salaries, and therefore 10-day contracts, are based on the number of years such player has been in the NBA. The minimum salary for a first-year player, for example, is $525,093, making the 10-day contract for a first-year player $30,888. For a veteran player in his eleventh year, a 10-day contract is worth $88,187, based off a minimum salary of $1,499,187. Despite their limited length and value, all 10-day contracts count against a team’s cap sheet. It is important to note, however, that one-year minimum salary contracts given to a player with over two years of experience are partially reimbursed by the league. As a result, on any given team’s cap sheet the most amount of money that will ever appear for a single 10-day contract is the pro-rated amount of a player with 2 years of experience. For the 2015-16 season, that amount is $55,722. A chart of 10-day contract salaries and their respective cap hit is in the table below:

2015-16 10-Day Contract Values

Years of Service Minimum Salary 10-Day Salary Cap Hit
0 $525,093 $30,888 $30,888
1 $845,059 $49,709 $49,709
2 $947,276 $55,722 $55,722
3 $981,348 $57,726 $55,722
4 $1,015,421 $59,731 $55,722
5 $1,100,602 $64,741 $55,722
6 $1,185,784 $69,752 $55,722
7 $1,270,964 $74,763 $55,722
8 $1,356,146 $79,773 $55,722
9 $1,362,897 $80,170 $55,722
10+ $1,499,187 $88,187 $55,722

The values in Table 1, however, are not technically set for all players who enter into a 10-day contract because 10-day contracts are not always 10 days long. The CBA states that a 10-day contract is for the longer of 10 days or 3 games played by the signing team. As such, a 10-day contract could hypothetically be for 12 days, giving such player a marginally higher salary than the values listed above.

A team and a player can enter into a maximum of two 10-day contracts in the course of one season. Many teams will do back-to-back 10-day contracts, entering into the second immediately after the first contract ends. 10-day contracts can be entered into from January 5 until the end of the season, although no contract can be entered into if there are fewer than 10 days left in the regular season.

The number of 10-day contracts a team can enter into at one time depends on their roster size and the active/inactive list. In general, rosters are maxed out at 15 players and at least 12 on its active list. At any given time, a team can be a party to as many contracts as the team has players on its inactive list, however if the team has 13 players on its active list, then it can be a party to the number of players on the team’s inactive list plus one. The CBA gives the following examples:

“[I]f a Team has thirteen (13) players on its Active List and no players on its Inactive List, then the Team may have one player under a 10-Day Contract. If a Team has thirteen (13) players on its Active List and two (2) players on its Inactive List, then the team may have three (3) players under a 10-Day Contract. If a Team has twelve (12) players on its Active List and one (1) player on its Inactive List, then the Team may have one (1) player under a 10-Day Contract.”

Rest-of-Season Contracts

After the maximum number of 10-Day contracts is used for a player, teams often opt to sign such player to a rest of the season contract to permanently fulfill a needed roster spot. Rest-of-Season contracts can be entered into with any free agent any time after the first day of the regular season. The salary of a rest-of-season contract, like that of a 10-day contract or any contract for that matter, cannot be less than the  minimum salary. The calculation of a rest-of-season contract is much like that of a 10-day contract described above: the salary for any player signing a rest-of-season contract is a pro-rated minimum based on the number of days left in the season. So if after two 10-day contracts, a rookie free agent signs a rest-of-season contract on February 1, his total salary for the 2015-16 season would be $287,257 ($225,481 for the rest-of season contract[2] and two $30,888 10-day contracts). The two 10-day contracts would be counted as dead money on a team’s cap sheet and the rest-of-season contract would be counted on a team’s cap sheet as a current player salary.

[1] Or 10/170th of the minimum player salary as the contract is for 10 days and the NBA season is 170 days.

[2] Or because on February 1 there are 73 days left in the NBA season, (73/170)*$525,093.

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