NBA

What is the two-way contract in the NBA?

The league introduced two-way contracts in 2017 as a means to help undrafted players secure deals with NBA teams, who can sign two two-way players per season.

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What is the two-way contract in the NBA?
Thearon W. Henderson AFP

At the start of the 2017-18 season, the NBA introduced two-contracts, which allows a player to sign a guaranteed deal with an NBA franchise and play for both its NBA professional team and its G-League affiliate. For example, if a player signs a two-way deal with the Chicago Bulls, he will be able to play for Chicago’s G-League team, the Windy City Bulls..

The two-way contract was introduced to benefit undrafted players who do not make the cut in the NBA Draft and enables teams to keep these players "on retainer" without having to sign to a full-time contract. Players drafted during the first or second-round of an NBA draft are also often signed to two-way contracts. Two-way players are often considered to be the "16th and 17th men" on a roster. Each NBA team is allowed to offer two two-way contracts per season to players with fewer than four years of NBA experience.

Several players have signed two-way deals this season, including Ohio State guard Duane Washington Jr., who signed a two-way contract with the Indiana Pacers after going unselected in the 2021 Draft, and Austin Reaves and Joel Ayayi, who both signed with the LA Lakers and will play with the South Bay Lakers.

Two-way contract rule changes

Two-way players were originally permitted to spend 45 days per season with their NBA team but were ineligible to play in the playoffs. However as a result of the pandemic, the league permitted two-way players to become eligible for the 2020 NBA Playoffs.

For the 2020-21 season, the amount of time a two-way player could play with his NBA team was increased to 50 games, while the minimum salary for two-way contracts increased from an initial $81,955 minimum to an overall salary worth up to $449,155.

For the upcoming 2021-22 season, the NBA Board of Governors also approved changes to roster-related rules regarding the use of two-way players during the regular season.

As per the NBA communique: “For the 2021-22 season, each two-way player will be paid a flat salary equal to 50% of the minimum player salary applicable to a player with zero years of service. A player under a two-way contract will be permitted to be on the NBA team’s active list for no more than 50 games during the regular season, with no limit on practices, workouts or other activities with the NBA team.

“In addition, there will be no deadline for signing two-way contracts with respect to the 2021-22 season, a change from the rule in the Collective Bargaining Agreement that prohibits teams from signing a player to a two-way contract after Jan. 15 of any season.”