The NBA Buyout: What It Is and How It Works
What does Buyout mean in the NBA? Let’s discover all the details about another common term in the NBA Market.
In our Complete Guide to the NBA Market, we discussed the topic of the Buyout, which we will explore in detail in this article.
What is a Buyout?
A Buyout is a mutual separation between a team and a player who still has a valid contract. Both parties agree on the terms of the break, both practically and financially, before ending the relationship permanently.
How does a Buyout work?
A Buyout is a market tactic that doesn’t make either party happy: the player will only receive a portion of their contracted salary, and the team will keep that salary on the books, which will count against the Salary Cap.
Essentially, the team and the player agree on a severance package in exchange for the player’s ability to sign with new contractual terms with a different team.
This is the case of John Wall, who received a Buyout from the Houston Rockets, giving up a significant portion of his earnings in order to sign a new contract with the Los Angeles Clippers.