Why Players are opting out of Contracts

Recently, in NBA news. We’ve had a series of players opting out of their contracts.

Brandon Bass, Deron Williams, Lou Williams, and Gerald Wallace will, in fact, use their early termination options as expected. This means that they will have a chance to hit the free agent market come June 30th when Free Agency is scheduled to begin. That doesn’t mean, necessarily, that they will be leaving their respective franchises. In fact, a lot of them are likely to return.

They are using their player ETO’s because it makes more sense from a financial security standpoint. Here is why.

Under the new CBA rules, players are not allowed to be extended for more than four years including the season that they’re playing the extension year in. For example, if Lou Williams chose to extend with the Nets he’d only get a max of three years in an extension. Since he’s using his ETO he can return for 5 years with Bird Rights or he can leave and go sign with someone for 4 years.

Because of that increase in years, the player will be paid more and have a longer sense of financial security with his ETO. In a different scenario like Derrick Rose’s or Russell Westbrook’s, they were able to extend for more years because of their playing prowess coming off of a rookie deal. Russell Westbrook was designated the Thunder’s “designated player” so they were allowed to extend his contract for 5 years through 2017. Derrick Rose was able to get a 7 year extension because of the Derrick Rose Rule which says that you can take a rookie contract to its 30% maximum salary if he wins MVP, is on the first or second team all NBA twice, or makes an All-Star team twice.

There are many other Salary Cap questions to be answered. If you have any, you can go here for more.

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