Michael Redd. Ben Wallace. Clifford Robinson. Manu Ginobili. These are the exceptions, not the rule. By and large, star players enter the NBA as First Round Draft Picks (the four listed above are examples of the few NBA stars who were not), which is the primary reason why First Round Draft Picks are highly valued by NBA franchises – because they represent opportunities to draft (in most cases) more talented players than are available by the time the second round of the draft rolls around.
At the same time, there is also a financial incentive to having/using First Round Draft Picks to build a franchise. The Collective Bargaining Agreement sets a parameter for the salary of First Round Draft Picks, often making them cheaper to pay during their first few years in the league than they could garner on the open market. This parameter is known as the Rookie Scale, and it sets a scale amount for each of the 30 players drafted in the 1st round of any given season. The team is then free to negotiate to pay the player between 80% and 120% of that player’s rookie scale amount for the first three years of their rookie scale contract. The fourth year of the rookie scale contract is a percentage of the player’s 3rd year salary. The details of rookie scale (amounts, percentages, etc.) can be found in this exhibit, found at the NB Players Association website.
The overwhelming majority of rookie scale contracts are paid at 120% of rookie scale, but there have been exceptions where players were paid less than this maximum number. For example, George Hill and Sergio Rodriguez each signed rookie scale contracts that paid them less than the 120% maximum.
A few more rules regarding First Round Draft Picks are found in the CBA:
- The third and fourth years of a rookie scale contract are actually team options that must be exercised by the team a full year before they commence. So, the team must pick up the team option on a 3rd contract year by Oct. 31st of the player’s second year. Similarly, the team must pick up the team option on a 4th contract year by Oct. 31st of the player’s third year. (Should Oct. 31st be on a weekend in a given year, the deadline is pushed back to the next weekday)
- If a player signs his rookie scale contract after January 10th, the amount of his scale (base) amount is reduced by 1/170 for every day after January 10th that the contract is signed.
- Teams that are over the cap can sign their First Round Draft Picks to a rookie scale deal by means of the Rookie Exception
- A player’s rookie scale is set by the year he is signed, not the year he was drafted. If a player was drafted in June 0f 2008 but is signed in July of 2009, the 2009-10 scale amount is used to set his contract amount.
- If more than 3 years have transpired since a player was drafted in the First Round and he hasn’t yet signed an NBA contract, the team can either sign him to a rookie scale deal or the team can use a different exception or available cap space to sign the player to a different contract amount. For example, this past summer, San Antonio signed Tiago Splitter to a contract amount much higher than his rookie scale amount using their Mid Level Exception. This was only an option because more than 3 years had transpired between the date he was drafted and the date that he signed his contract.
- At any given time, a team must hold one or more First Round Draft Picks in at least one of the next two upcoming drafts. This pick does not have to be their own pick.
- The order of the First Round of the draft is set as follows: the first 14 positions are for the teams that did not make the playoffs in the preceding season and their order is set by an annual lottery held in May. The other 16 draft positions are then determined in reverse order of the number of wins that the team had in the preceding season. If two or more teams have the same number of wins, position is established by means of a coin toss.
- The draft itself is held at the end of June, after the NBA Finals have concluded