Salary Cap Research: Are Teams Waiving Fewer Players On Non-Guaranteed Salaries?
Today's guarantee deadline came and went with few waivers. It feels like January 7 has been getting quieter each year, so I checked my data since the 2021-22 season to see if that's true.
Today is the leaguewide cutdown date and we saw just three players on standard, non-guaranteed salaries waived: Bruno Fernando, Branden Carlson, and Orlando Robinson. Doesn’t that feel lower than usual in previous years? It feels like January 7 used to have a much larger scale of waivers to keep track of.
In total, 11 players on minimum, non-guaranteed salaries for this season were waived ahead of the January 7 guarantee date. Could there be a shift of fewer non-guaranteed players being waived mid-season in recent years? I decided to check my data from these past four seasons to see if I was on to something.
Players on non-guaranteed or partially guaranteed salaries generally accrue a daily cap hit for each day they are on a roster. For fully non-guaranteed players, these daily cap hits are what they earn for their time spent on an active roster. For example, Orlando Robinson earned $959,779 of his $2.1 million salary for spending 80 days with the Kings.
These players’ salaries only become guaranteed if they remain on the roster through 5 PM ET on January 71. If waived on that day, they only receive payment for days spent on the roster, which is roughly 46 percent of their base salary. This allows teams to maintain flexibility ahead of the trade deadline, such as creating more space below the luxury tax or opening up a roster spot. It also allows teams with large luxury tax penalties to marginally reduce costs.
I went back as far as the 2021-22 season2 to see the rate of non-guaranteed salaries that became guaranteed. I narrowed the criteria by a couple of factors:
Players must have a mid-season guarantee date. This prevents including players who were waived before the season started and thus teams had their decisions made in advance.
Players must spend at least one active day on the team's roster. This is so the players being considered accrue daily cap hits (some of these players could have large partial guarantees, but that's okay).
Players must be on a minimum salary. I didn’t want to count players on larger salaries since they rarely get waived3.
Players who were on non-guaranteed minimum salaries signed from previous seasons count.
Players who signed non-guaranteed salaries during the regular season count.
Players signed to 10-day contracts don't count.
Here's what the numbers reveal:
2021-22: 38 total non-guaranteed salaries. 16 players (42 percent) were waived before their guarantee date. The remaining 22 had their contracts guaranteed for the rest of the season.
2022-23: 36 total non-guaranteed salaries. 9 players (25 percent) were waived before their guarantee date. The remaining 27 had their contracts guaranteed for the rest of the season.
2023-24: 39 total non-guaranteed salaries. 7 players (18 percent) were waived before their guarantee date. The remaining 32 had their contracts guaranteed for the rest of the season.
2024-25: 28 total non-guaranteed salaries. 11 players (38 percent) were waived before their guarantee date. The remaining 18 had their contracts guaranteed for the rest of the season.
Teams were increasingly keeping non-guaranteed players beyond the guaranteed date between 2021-22 and 2023-24. The 2021-22 season saw 42 percent of non-guaranteed players waived mid-season. The following 2022-23 season saw a significant drop, with only 25 percent of qualified players being waived. This trend continued in 2023-24 where just 18 percent of qualified players were cut — less than half the rate from two seasons prior.
The current 2024-25 season appears to buck this trend with 39 percent of qualified players being waived. However, this season’s non-guaranteed players are a little trickier to evaluate for this.
For example, several teams signed multiple players for brief stints due to injuries. The Oklahoma City Thunder signed and waived three players (Alex Reese, Malevy Leons, and Branden Carlson). The New Orleans Pelicans did the same with Elfrid Payton and Jaylen Nowell.
Also, the Pistons signed Javonte McCoy to a non-guarantee salary and waived him the next day so they wouldn’t be penalized for being below the minimum team salary floor for too long. This season's waiver rate could be closer to previous seasons without these unusual circumstances.
Also, this season had a significantly lower amount of minimum salaried, non-guaranteed players on active rosters than previous ones. That number could contribute toward inflating the current 39 percent rate. Time will tell if fewer mid-season non-guaranteed salaries will be a new trend or if that number will rise back into the high 30s next season.
So what's driving this shift toward keeping players on non-guaranteed deals? Here are a couple of reasons that could explain:
Limited tax savings: Waiving a partially guaranteed, minimum salaried player doesn't give luxury tax teams significant savings since they’re incurring a large dead cap hit. Teams gain more tax savings by guaranteeing the player, then trading him ahead of the trade deadline and incurring no cap hit for the player. However, this often requires the team to include an incentive attached to the player, such as a future second-round pick.
Fewer savings on older veterans: Veterans with more years of service accumulate larger daily cap hits. This makes waiving them less appealing. For example, if the Indiana Pacers waived James Johnson today, a player with over 10 years of service, they would’ve incurred a $1.5 million dead cap hit against his $2.1 million salary4. The minimal savings give credence to the first explanation and often make it more practical to keep veterans through their guarantee dates.
Trade purposes: Minimum salary contracts can be useful for trades since teams can absorb minimum salaries without sending players back. Also, teams can aggregate multiple minimum salaries only between December 15 through the trade deadline. If a non-guaranteed player is trade-eligible ahead of the trade deadline, and the team doesn’t need to reduce costs, they might as well hold onto the player in case his salary could be utilized for aggregation purposes.
Two-Way contracts: Teams are increasingly signing young players to two-way contracts who might have previously received standard non-guaranteed salaries. In 2024-25, only 15 players on non-guaranteed deals were two-way eligible, compared to 21 in 2023-24. Also, teams have dedicated second-round selections for two-way slots more often in recent years. It’s possible the expansion to a third two-way slot could reinforce this trend.
When you consider all these factors, I suppose you could say the league has gotten more efficient at handing out non-guaranteed salary structures. Also, it’s good business for teams when they guarantee their players’ salaries.
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We used to call it the January 10 cutdown date, but that’s just because the player had to have cleared waivers before January 10 to not get fully guaranteed. That’s why teams must cut their players no later than January 7. That’s also why Robinson counts as 80 days with the Kings instead of 78, for those who were counting.
2021-22 is the first season where I got my salary cap data truly organized, so I can’t guarantee accurate results for previous seasons.
Paul Reed is an exception this season, but he was waived and brought back so the Pistons can maximize their cap space. Also, this is your reminder that Zion Williamson survived the guarantee cutdown date.
Johnson's veteran minimum salary counts as $2.1 million for the Pacers but he is actually earning $3.3 million.