We’ve been hearing a lot of talk about the two-way contracts that were introduced with the new CBA this July. But what are they, and what do they mean for the Dallas Mavericks?
The basics of the two-way deal
Here are the key takeaways from the “two-way” contract:
- Using a “two-way” contract does not affect the roster spots or contracts of the 15 “original” players.
- The players signed under the two-way contract must have less than three years of professional experience.
- These contracts can be used for only up to two years per player.
- Two-way players can be on an NBA roster for only up to 45 days.
- Two-way players get paid on the rookie minimum scale while playing for the NBA team.
- Two-way contracts must be signed prior to January 15th.
- Teams retain "Bird" rights for players under two-way contracts.
Let’s decompress. Basically, the “two-way” contract gives teams a 16th and 17th roster spot for players who can play for the team for a finite amount of games. These two players are more or less shared between the NBA team and its G-League (formerly D-League) affiliate. NBA teams do not need to waive players or assign players to G-League affiliates. These roster spots do not count against the cap.
Two-way players must have less than three years of NBA experience. This means that if a player earns a two-way contract after being in and out of the NBA for two seasons, that two-way contract is only good for one season. After one season, the player would have a total of three years of experience and be unable to sign any further two-way deals.
The amount earned by two-way players depends on which team they are playing for. While playing for the G-League affiliate, they are paid based on a $75,000 annual salary, and while playing for the NBA team, they are paid based on the NBA minimum rookie annual salary, which is $815,615. If a two-way player is on the NBA roster for the full 45 days allowed under the two-way deal, such players can earn up to around $271,000. Here’s how that math works. According to the NBA, a full season is 170 days, so a single day’s salary for a two-way player on the NBA roster comes out to $4,797.74. 45 days on the NBA roster comes out to $215,898. The other 125 days are spent on the G-League roster at a $75,000 salary, which comes out to $55,147, for a total salary of $271,000 for the season.
At minimum, a two-way player would make $75,000 for the season, if the NBA team does not place him on the NBA roster at all. This is an infinitely higher guarantee than that of a typical NBA G-League player ($26,000 a year for Tier A players, $20,000 for Tier B players).
Why this helps NBA teams
After the two-way contract is completed, these players become restricted free agents ,and teams will be able to go over the salary cap to sign them. This is a HUGE clause of this contract.
Imagine an undrafted free agent or deep second round pick becoming an NBA fixture (a la Manu Ginobli, Draymond Green or the Mavs’ own Wesley Matthews) on a two-way contract. The player uses his two-way deal to establish himself as an NBA rotation player, and his team now has early bird rights in restricted free agency and is able to go over the cap to sign him. That’s a huge free agency advantage.
Jonathon Simmons is a good example of why the two-way contracts are so helpful for a team. Simmons went undrafted and signed a two-year contract with the Spurs, where he established himself as a reliable backup guard with potential. At the end of his deal, he became a restricted free agent, but the Spurs renounced their rights in order to open up more cap space. Once he became unrestricted, he signed with the Orlando Magic, likely for more money than the Spurs were willing to pay him. If he had been a two-way player, the Spurs might never have had to renounce him because they could go over the cap to re-sign him.
So NBA teams get a longer version of a ten-day contract, and highly ranked G-League players or international players get much more guaranteed money than the would in the G-League alone. Sounds like a win-win, so where’s the catch?
The catch is that players signed under the two-way contract are unable to sign with any other team while under the contract. For example, Johnathan Motley was recently signed to a two-way contract with the Mavs, therefore; no other NBA team can sign him for the duration of the contract. Normal G-League players are free to sign with any NBA team, regardless of whether the G-League team is affiliated with a particular NBA team.
So why should any of this make you care about the Texas Legends?
First of all, G-League games are a unique smorgasbord of former draft picks, college stars and unknown international players that make for a unique sort of basketball entertainment. (Where else can you see Ben Gordon throw a lob to Satnam Singh??)
Secondly, the games are extremely fast-paced and high-scoring (your Texas Legends averaged 117 points a game last season, good for 3rd in the league).
But that was all true before these two-way deals. Now, for the first time in D-League/G-League history, there is a sense of loyalty or contractual commitment between certain G-League players and their NBA affiliates. In the past, G-League players were available to be poached by other NBA teams, which resulted in a significant amount of personnel turnover. However, with two-way contracts we get two players we know will be playing for the Mavs/Legends for up to two years. Johnathan Motley is a Legend, but now he is also a Maverick, and you won’t see him suddenly whisked away by another NBA team midseason.
It’s clear that Dallas is in a rebuilding stage, and the Legends exist at least in part to develop the Mavs’ young talent. We’ve seen the NBA Summer League grow into must-watch TV because it gives young talent the ability to play against each other. The G-League can now be a similar medium to watch the Mavs’ young talent grow and compete.
So even if you’re tuning in solely to see whether Johnathan Motley is doing enough to earn his full 45 days with the Mavs, the Legends deserve your attention.