The ripple effect of two-way contracts for next season

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Updated: February 24, 2017

The addition of two-way contracts to the NBA Development League next season is a game-changer. The structure of rosters will look different as players move fluidly back-and-forth between teams. The two-way contracts allow for improved integration between the NBA and their D-League affiliates. But with such a change comes perhaps some unintended consequences.

To clarify a few things, each NBA team (including those without D-League affiliates of their own), may sign up to two players to two-way contracts. Players may move freely back and forth between both teams as the two-way players do not count against the 15-man NBA roster.

A player may spend a total of 45 days on the NBA roster before a team must provide them with a qualifying offer to keep them on the NBA side. Players with three years or fewer of NBA service may sign a two-way contract. For more details on salary, click here for a breakdown.

Reputation To Be Built

First, NBA teams will be navigating uncharted waters with two-way contracts. Speaking to a number of NBA front office people, some suggest two-way deals will be offered nearly immediately after the NBA Draft, while some suggest teams might wait it out through training camp.

Whatever the case may be, teams will need to establish credibility with this first year of two-way contracts. Teams may bring two-way players up to NBA rosters for up to 45 days, but there is no guarantee they will do so. The minimum a two-way player can earn is $75,000, while they can cap out at approximately $275,000 if they are on an NBA roster for the maximum allotment.

At first teams will be cautious about making sure players don’t use up those days early (unless they have outperformed their deal at which point they will max them out and sign them to a qualifying offer thereafter). With that, teams should take consideration into ensuring a player does see those 45 days on their roster.

Obviously a player has to earn it, and should be treated on a case-by-case basis, but if a player has, for example, 22 days left on their deal, teams should call up that player for the remaining 22 days of their deal in order to maximize their salary and reward them for signing a two-way deal.

Most of this is done on handshake agreements between teams and agents obviously, but teams who provide players with greater opportunity on the NBA side will definitely see greater attention the following year when teams can offer new two-way deals.

Watered Down D-League Draft

I’ve written extensively on the draft and its needless length. Each season the D-League seems to acknowledge this by reducing the number of required rounds. Last season, the draft was reduced to six rounds from eight, with only the first four rounds required for draft selection.

As reported this past week, the D-League is acknowledging this once more by reducing the draft to four rounds in total according to a league source. Any teams who traded for fifth or sixth round picks will not be compensated for those picks, nor are teams allowed to trade those picks (obviously).

Two-way contracts just add another layer to D-League rosters that make the draft value plummet. Add your two-way contracts, plus affiliate players (up to four from NBA training camp), as well as returning players (some teams had five returners this past season) and you are already at 11 players, before the draft even takes place. D-League rosters are allowed a maximum of 12 players, with 10 being active on game day.

Thus, it will be even more challenging for players to make a roster outside of the first round of the draft.

Add in the fact there will be three new teams added to the D-League next season and a late first-round pick doesn’t hold the same value as it did even two years ago (19 teams took part in the 2015 as opposed to 25 next year).

Thus, in the first four rounds you’ll hear 100 names selected with a majority being waived roughly 10 days later at the end of training camp. That isn’t to say gems can’t be found in the draft. Marcus Posley was selected 44th overall by the Skyforce and has been a valuable rotational piece for them this season.

Fewer 10-Day Deals?

I’ve heard multiple opinions on this concern. Does the addition of two-way contracts negate the need for 10-day contracts? Yes and no.

Two-way players don’t count against the NBA roster and thus are 16th and 17th addition for guys who can earn minutes on the NBA side to continue their development. That being said, the two-way contracts are for those on the cusp of the NBA but aren’t quite there yet, thus some D-League seasoning could help them on that path.

10-day deals, typically, are for teams looking for someone who can contribute immediately. Whether that’s through a rebuilding process and turn a new leaf over with a roster, or for a team looking to add a piece for a playoff piece. That’s certainly not always the case, but for the most part 10-days are for the immediate future, whereas two-way deals are viewed as the long-term option for teams.

Plus, if a team needs a point guard but neither of their two-way players are such, they can add a point guard from the D-League or free agency through a 10-day deal to fill that roster void.

The other question becomes, where do all the minutes go? With the addition of the two-way contracts, it’s been predicted the minutes for 10-day deals next season might be cut in half next season as a result of two-way contracts. That remains to be seen, but it would seem reasonable to think teams have a greater investment in two-way players thus giving them limited minutes would take priority over a 10-day deal.

Risk/Reward

Teams will often subsidize the low D-League salaries with training camp guarantees. Those can range anywhere from $50,000, up to $250,000 (Ben Bentil). That will no longer be the case with two-way contracts as players will only be allowed to receive a maximum $50,000 guarantee per the new NBA Collective Bargaining Agreement. If a player is signed with a greater training camp guarantee, that player is not allowed to sign a two-way deal with that team. That being said, this could work a number of different ways.

$50,000 could set the market for some teams across the board for two-way players and affiliates. Teams might be inclined to invite players to camp and offer all $50,000 with the possibility of signing them to a two-way deal based on their camp performance. If a team offers more they can’t do that so it’s possible this is the new market standard for camp players across the board.

Obviously for teams like the Nuggets, Wizards, Pelicans, Trail Blazers, and Clippers, that won’t be the case as they won’t have affiliate players to send to their non-existent D-League affiliate, but this could set a trend moving forward. Again, it all depends on when teams wish to unload their two-way deals. Some teams may choose to be forthright and make a move immediately after the draft, while others might wait to see what a player brings to training camp.

While a player can earn up to $275,000 on a two-way deal, there is a possibility they could earn more if they seek a D-League buyout and sign overseas. That option won’t be afforded to players on two-way deals, as the NBA team controls their player rights. Players who sign D-League contracts are eligible for player buyouts should an opportunity overseas arise.

This begs the question, will players take a deal that limits their potential earnings if they aren’t called up to the NBA roster, or opt to control their own destiny via the D-League with the possibility of signing a 10-day deal or heading overseas? That remains to be seen.

One Comment

  1. BectonD

    February 27, 2017 at 3:19 pm

    The two-way deals will be a windfall for undrafted rookies; and 3rd year players that flamed out on their original rookie contacts.

    But it does not address the minimum wage salaries paid to veteran in the G-League.

    Perhaps NBA teams will increase training camp guarantees for veterans (75,000-100,000 range) and top veterans will only be expected to remain in the G-League for 60 days before signing a deal with a European team. (If not promoted to the NBA)

    Therefore, most G-League draft picks of the future, will most likely never play in the G-League or will remain unemployed from November to January. Only gaining a minimum wage salary if the top veterans elect to leave the G-League for greener pastures.

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