[Note: These rules are relevant for the 2019 offseason only. 2020 thresholds will be available after the salary cap is set after the 2019-20 season. Expect the numbers below to rise slightly]

Here’s a quick rundown of the relevant rules with respect to the RFA offer sheet process:

  • RFA’s can make contact with all teams, including their own, regarding potential interest on June 26. They can’t sign new contracts or offer sheets until July 1 at 12pm.
  • If an RFA wants to accept an offer from another team after July 1, paperwork must be submitted to the league outlining the terms of the proposed contract. The original team has 7 days to exercise their right to match the terms of the offer sheet. During this time, they are not allowed to trade the RFA player.
  • If the original team chooses to accept the terms of the offer sheet, they are also not allowed to trade the player for one year from the date of exercising their right to match.
  • If the original team declines to match the terms of the offer sheet, the player and his new team enter into a contract under the proposed terms. The original team is then entitled to draft pick compensation based on the following table:
 Calculated Offer Sheet Amount  Draft Pick Compensation
$1,395,053 or below  None
Over $1,395,054 to $2,113,716  Third Round
Over $2,113,717 to $4,227,437  Second Round
Over $4,227,438 to $6,341,152  First Round & Third Round
Over $6,341,153 to $8,454,871  First Round, Second Round, and Third Round
Over $8,454,872 to $10,568,589  Two First Rounds, Second Round, and Third Round
Over $10,568,590  Four First Rounds

 

The offer sheet amount, for purposes of the draft pick compensation table above, is calculated by dividing total compensation by the lesser of the number of years of the offer sheet or five. This discourages offer sheets beyond five seasons as the compensation requirements will increase dramatically.

There are a number of additional rules when it comes to draft pick compensation. Here are a few key highlights (please see CBA Article 10.4 for full details):

  • Teams must use their own original draft picks for purposes of offer sheet compensation. They cannot acquire picks from other teams, however, they can trade away their own picks and then re-acquire them at a later date.
  • Teams owing picks for amounts up to $8,454,871 must have those picks available in next year’s draft (2020).
  • Teams owing two picks in the same round must have them available in the next three drafts (or three picks in the next four drafts, etc)