Larry Bird Exception

The Larry Bird exception, better known as “Bird rights” is a way a team can exceed the salary cap in order to sign its own free agents, provided that player meets certain criteria. Officially, the distinction is known as the “Veteran Free Agent Exception”. It’s named after Bird because the Celtics were the first team to receive permission to exceed the cap to re-sign one of their own players.

The term became synonymous with Bird’s name because of its supposed origin. When the salary cap was agreed to in 1983, it was supposed to be a “hard cap”, meaning that no team could exceed it for any reason. However, the league eventually allowed for specific exceptions to the cap, making it a “soft cap”, (which is still how it works in 2017).

Bird has often been cited as the original beneficiary of the salary cap exception when he signed a (then) monster seven-year contract to stay in Boston in September, 1983. As a result of that, his name has become synonymous with the arcane rule.

Skepticism exists as to whether the Celtics technically utilized the “Larry Bird Exception” when they signed Bird to his deal in 1983 (since the salary cap wouldn’t go into effect until the following season), but the perception has nonetheless become reality. The rule has been linked to Bird’s name numerous times since 1983, including by the NBA itself.

Certain conditions must be met, but if they are, it’s a way for teams to go above and beyond in keeping an existing roster together. In order to qualify for “Bird rights” a player must play for one team for at least three seasons without clearing waivers or changing teams via free agency.

In addition to being able to exceed the cap, Bird rights are also a given team to sign that player for one more year than another team can offer.

On top of the regular Bird exception, there’s also the ‘Early Bird’ exception. The difference is it can be used after a player has been with a team without clearing waivers or changing teams in free agency for two years instead of three. The catch here, however, is that Early Bird contracts are restricted to two-year terms.