What are salary cap exceptions?
The basic rule of the salary cap is that a team’s team salary may not be above the cap at any time unless the team is using an exception. In a system with a soft cap, an exception is the mechanism that allows a team to function while above the cap. LARRY BIRD EXCEPTION — This is the best known exception. Players who qualify for this exception are called “Qualifying Veteran Free Agents” in the CBA, and this exception is formally a component of the Veteran Free Agent exception. This exception enables teams to exceed the salary cap to re-sign their own free agents, up to the player’s maximum salary. To qualify for this exception the player essentially must play for three seasons without being waived or changing teams as a free agent (although there are nuances to this rule, which are explained in question number 26). This means a player can obtain “Bird rights” by playing under three consecutive one-year contracts, a single contract of at least three years, or any equivalent combination.
