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Let's say a team that is over the luxury tax trades away a player for whom they had Bird's Rights. They receive a player on a 1-year contract worth $7 million. This new player did not have Bird's Rights from his previous team. So that means he won't have Bird's Rights with his new team either.

Since the team is over the luxury tax and they do not own Bird's Rights, is it impossible for them to retain their newly acquired player after the season?

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The short answer is yes they can retain their newly acquired player after the season. That player will become a free agent and can go wherever he chooses. If the team offers him a contract that he chooses, a few things can happen:

  1. The team can trade away other cotsly players to stay under the salary cap number
  2. They can choose not to resign any players from the previous year (assuming they have players with expiring contracts)

  3. They can choose to go over the salary cap and pay a luxury tax

  4. The player may be eligible for another exception depending on who he is.

Since there is a soft salary cap in the NBA, things can get very tricky. There are many exceptions for players and ways to get around the luxury tax.

If the NBA salary cap as a whole is of interest, more information is posted on this FAQ:

NBA CBA Salary Cap FAQ

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  • You should probably mention the specific element of bird/nonbird/whatnot that applies here (Non Bird Rights, allowing the player to re-sign up to 120% of his previous salary), as this is very different from what he can sign for as a Bird or Early Bird player.
    – Joe ♦
    Oct 17 '14 at 16:49

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