There are two types of free agency in the NBA: unrestricted and restricted. An unrestricted free agent is free to sign with any other team, and there’s nothing the player’s original team can do to prevent it. Restricted free agency gives the player’s original team the right to keep the player by matching a contract he signs with another team.
Restricted free agency exists only on a limited basis. It is allowed only for players coming off rookie-scale contracts, and for players who have been in the league three or fewer seasons.
Whiteside is technically a two-year veteran. This is his third year. Had the Heat doled out a one-year deal, Whiteside could have been made a restricted free agent this summer.
But here’s the thing: Restricted free agency only gives a player’s incumbent team the right to match a contract the player signs with another team. It still needs to have the means (either the necessary cap space or a large enough exception) to match it.
Back in 2003, the Washington Wizards were able to take advantage of a loophole in the NBA’s salary cap system when they outbid the Golden State Warriors for Gilbert Arenas, a restricted free agent after being a second round pick in 2001. The Warriors were over the cap and thus could only use an exception to re-sign Arenas.
Gilbert was at the time an “Early Bird” free agent, a designation classified for players who have played with their incumbent teams for two years. A team can use the Early Bird exception to re-sign its own free agent for up to 175-percent of his salary in the previous season or the league’s average salary, whichever is greater. Golden State could only match an offer sheet for up to the amount of the Early Bird exception, which was about $4.9 million at the time. Washington signed Arenas to an offer sheet with a starting salary of about $8.5 million, which Golden State was powerless to match.
This loophole was addressed in the 2005 CBA with the “Gilbert Arenas” provision, where it was ruled that an offer sheet made to a restricted free agent in his first or second year in the NBA could not contain a first-year salary greater than the (full) mid-level exception. To put this in context of 2003, the Wizards would only have been able to offer the mid-level exception, which at the time was $4.9 million. Golden State would therefore have had the option to use its Early Bird rights to match the offer sheet for Arenas, if they chose to do so.
The rule change does two primary things: It limits the size of a potential first year salary that a player with one or two years of experience can get on the open market(1), and it guarantees that the player’s prior team can utilize the Non-Taxpayer Mid-Level Exception to match it (assuming, of course, it has access to it).
While the provision only applies to players with one or two years of experience, players with three years of experience can still be made restricted free agents, and since full Bird rights are accrued after three years, their prior teams are generally in a position to leverage those Bird rights to match any outside offers up to and including a maximum salary.
These rules combine to make it nearly impossible to wrestle away any players with three years of experience or fewer. The case of Whiteside, however, is somewhat unique.
By virtue of the two years of experience that Whiteside has already accrued, the Heat will not have the protections of the Gilbert Arenas provision.
But it gets worse. While Whiteside has accrued two years in the league, those years were not in Miami. Therefore, the Heat also has not accrued those two years toward his Bird clock.
Retaining him therefore becomes problematic.
Had the Heat offered Whiteside a one-year contract, despite his restricted free agent status, Whiteside would have become only a “Non Bird” free agent this summer, a designation classified for players who have played with their prior teams for only one season. A team can use the Non-Bird exception to re-sign its own free agent to a contract of up to four years in length, starting at up to 120 percent of either his salary in the previous season or the then-current minimum salary, whichever is greater. For Whiteside, that would have been just $1.2 million.
The Bi-Annual exception, which allows for a two-year contract starting at $2.1 million, wouldn’t have been much better.
The Heat, which projects to be capped out this summer, therefore ran the risk of not being able to match a high enough outside offer and losing him outright after the season.
The full Mid-Level exception – very likely the most the Heat could have offered this summer, a contract which would start at $5.5 million – would surely have been enough, at least as projected at the time of his signing last month, but hardly seems the most efficient utilization of that single-use exception, particularly with the team’s clear focus on maintaining flexibility for the expected availability of several top free agents in the summer of 2016.
And so, the Heat bypassed the one-year contract in favor of a two-year contract, with $100K in guaranteed money to serve as an enticement for Whiteside to accept. Whiteside is now under contract to the Heat through next season. His contract calls for a non-guaranteed minimum salary of $981,348 next year. It could soon become one of the biggest bargains in the whole of the NBA.
http://heathoops.com/2015/01/hassan-whiteside-is-very-much-a-part-of-miami-heats-future/