NBA Cap Hits, Exhibit 9s, and Non-Guaranteed Contracts: Teams Walk a Financial Tightrope

The NBA salary rules are complex, and nothing illustrates that better than how teams handle non-guaranteed contracts and Exhibit 9 clauses.

It’s all about timing, injuries, and cap management. Some teams shrug off minor hits; others feel the pinch in a big way.

Exhibit 9: Cheap, but Not Without Consequences

Exhibit 9 contracts are summer and preseason tools designed to minimize risk. If a player on an Exhibit 9 deal gets injured, the team incurs just a $15K cap hit upon waiving him. It’s small change for most teams, but for franchises flirting with hard cap thresholds or luxury tax lines, even that pocket change matters.

Take the Knicks. They waived Landry Shamet after he dislocated his shoulder in preseason, taking on a $15K cap hit.

Doesn’t sound like much, right? Well, the Knicks are only $581K under the second apron, so even that minor hit squeezes their flexibility. It might mean waiting an extra few days to sign a 15th man later this season.

The Lakers? Same story. Waiving Jordan Goodwin after his preseason injury cost them $15K — dropping them to just $30K below the second apron. That’s not game-changing, but when margins are this tight, every dollar counts.

For the Spurs, who waived Nathan Mensah under similar circumstances, the $15K is barely a blip on their radar. San Antonio’s far from tax trouble, so no harm, no foul.

The Bigger Problem: Non-Guaranteed Contracts

Once the regular season starts, Exhibit 9 contracts disappear, and things get pricier. If a player on a non-guaranteed deal gets injured, his full salary sticks on the books. And that’s where it gets tricky.

Look at the Pacers and James Wiseman. The former No. 2 pick tore his Achilles and is out for the season. If Indiana waives him now, his entire $2.24M cap hit remains on their books — no relief.

For a team just $500K below the luxury tax, that’s a headache. It means Indiana’s ability to take on salary in trades is significantly hampered unless they find a creative way around it.

The Takeaway

This is why timing is everything in the NBA. Teams need to weigh the benefits of keeping a player against the financial and roster constraints of an injury.

For wannabe contenders and cap-strapped teams like the Knicks, Lakers, and Pacers, even small hits can have ripple effects.

Meanwhile, for Wiseman and the Pacers, it’s a harsh reminder of how quickly a non-guaranteed contract can become a guaranteed headache.

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