The first week of July is the NBA’s moratorium. During this time, the NBA’s accountants do the final audit for the previous season (seasons change over on 1st July – usually), and work out the exact amounts of the salary cap, exceptions and the like for the following season.
During this period, teams are prevented from making certain moves, including most signings and trades. However, they are allowed to begin negotiating with free agents. It is a time of great buzz, lots of Twitter updates – but little actual movement.
One of the more misunderstood aspects of the moratorium is that it is not really designed to slow down free agency. In practical terms, it often achieves the opposite. Because teams know they cannot immediately execute most transactions, they spend weeks preparing in advance, lining up contingency plans and prioritising targets so that negotiations can begin the moment the permitted window opens.
The result is that the first few hours of free agency are frequently the busiest of the entire offseason. Deals worth hundreds of millions of dollars can reportedly be agreed within minutes of negotiations becoming legal, to the point that in 2022, 34 deals were “announced” in the first 34 minutes. They were not official announcements, but to the outsider, news is news.
For league officials, the period is also one of the busiest administrative stretches of the year. Hundreds of contracts, option decisions, tenders, guarantees and trade documents must be reviewed in a matter of days.
By the time the moratorium concludes, much of the offseason has already been established. What follows is less a frenzy of formal completion of agreements that have largely been settled during the preceding week. Whether it should be that way or not, just know that it is.
This is what is both permissible and banned in that period.
What teams can do during the July Moratorium
From 6pm (all times Eastern) on 30th June, teams can do the following:
- Negotiate with unrestricted free agents from other teams
- Negotiate with restricted free agents regarding potential offer sheets
From 12.01am on 1st July, teams can do the following:
- Negotiate extensions, both veteran and rookie scale
- Sign restricted free agents to their qualifying offers, including maximum qualifying offers
- Sign tenders
- Waive players
- Claim players off waivers
- Convert a two-way contract into a standard NBA contract
From 12.01pm on the same day, they can also do the following:
- Sign offer sheets (twelve hours after negotiations began)
- Sign players with the Second Round Exception
- Sign players to two-way contracts
- Sign rookie scale contracts
- Convert Exhibit 10s into two-way contracts
- Sign players (be they from other teams, rookies, their own FAs, or wherever) to the minimum salary, as long as it for no more than two years (which is the maximum length permissible via the Minimum Salary Exception anyway)
What teams cannot do during the July Moratorium
- Made any trades other than waiver claims
- Sign free agents for any contracts other than the above (including, but not limited to, using cap space and/or MLEs)
- Sign extensions
This, then, prohibits the majority of free agency movement for a week.
The negotiation period opening at 6pm on 30th June is a relatively new wrinkle that sees the negotiation process begin slightly sooner. Teams used to have to wait until midnight between the two dates to begin negotiations, but this in practice suited no one, and has thus been brought forward since 2019 to a more sociable hour.
Before the moratorium period ends, neither teams nor players (including agents or anyone acting on their behalf) are allowed to publicly announce that they have agreed to a contract that cannot yet be officially signed. You will see leaks among the media all the time, but you will not – or should not, at least – see anyone on the team or agent side put their name to it. (During the 2023 moratorium, players and their representatives were expressly allowed by the CBA to publicly discuss or announce agreements, even though teams remained subject to the restriction. I do not know why.)
Unless extraordinary circumstances require otherwise, the moratorium begins with the season – on 1st July every year. It ends at 12pm on 6th July.
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