As we first outlined in 2023 when it was introduced as a new addition to the NBA’s Collective Bargaining Agreement, the second-round pick exception allows NBA teams to sign their second-round picks to standard contracts without requiring cap room or another exception (such as the mid-level) to do so.
Like the rookie scale exception, the second-round pick exception isn’t limited to a single use. It can be deployed as many times as needed in a given league year.
The second-round exception can be used to sign a player to either a three-year contract that includes a third-year team option or a four-year contract that features a fourth-year team option.
Teams have made good use of the new exception over the past couple years, with nearly every second-round pick who gets a standard contracts now being signed using the second-round exception.
The values of the second-round pick exception change every year along with the NBA’s minimum salary scale, so with this year’s second-rounders starting to sign, it’s worth updating the numbers to ensure they’re accurate for 2025/26
Here are the details for ’25/26:
Three-year deal
- The first year can be worth up to the minimum salary for a player with one year of NBA experience.
- The second and third years are worth the second- and third-year minimum salaries for a rookie.
- The third year is a team option.
As our chart of minimum salaries shows, in 2025/26, the maximum three-year salary for a contract with this structure would be about $6.7MM. Here’s the year-by-year breakdown (option year in italics):
| Year | Salary |
|---|---|
| 2025/26 | $2,048,494 |
| 2026/27 | $2,150,917 |
| 2027/28 | $2,525,901 |
| Total | $6,725,312 |
While the second- and third-year salaries will remain static in any three-year contract signed using the second-round exception, the first season can be as low as the rookie minimum ($1,272,870). A three-year deal that starts at that minimum amount would be worth a total of $5,949,688.
Four-year deal
- The first year can be worth up to the minimum salary for a player with two years of NBA experience.
- The second year can be worth up to the second-year minimum salary for a player with one year of experience.
- The third and fourth years are worth the third- and fourth-year minimum salaries for a rookie.
- The fourth year is a team option.
In 2025/26, the maximum four-year salary for a contract with this structure would be nearly $10MM. Here’s what it looks like from year to year (option year in italics):
| Year | Salary |
|---|---|
| 2025/26 | $2,296,274 |
| 2026/27 | $2,411,090 |
| 2027/28 | $2,525,901 |
| 2028/29 | $2,735,698 |
| Total | $9,968,963 |
As with the first year of the three-year deal, the first two seasons of the four-year contract don’t necessarily have to start this high. They could be as low as $1,272,870 for year one and $2,150,917 for year two, for a four-year total of $8,685,386.
In any deal that uses this four-year contract structure, the salary increase between the first and second season can’t exceed 5% if the second season is above the minimum. For instance, a team wouldn’t be permitted to negotiate a contract that starts at the rookie minimum ($1,272,870) and jumps to $2,300,000 in year two, even though that second-year salary comes in below the maximum allowed.
Players who are signed using the second-round pick exception don’t count against a team’s cap between July 1 and July 30 of their first season.
That rule allows teams to preserve all the cap room they need until July 31 without having to worry about their second-rounders cutting into it, as well as positioning those players to sign their first NBA contracts before taking part in Summer League games.
