Understanding Team Options
A team option gives the franchise the right to keep a player at a predetermined salary for one additional year. Unlike player options (where the player decides), team options put control in the hands of the front office. This is a valuable risk management tool -- teams can shed salary if a player underperforms or retain bargains if a player exceeds expectations.
The decision calculus involves comparing the option salary to what the player would command on the open market. If the option is below market value, teams exercise it. If the player is overpaid relative to production, teams decline it. The Brooklyn Nets declining Ben Simmons' $40.3M option was one of the clearest cases of production not matching salary. See also: Player Options, Salary Cap, and Luxury Tax.
Frequently Asked Questions
What is a team option?
A contract clause that gives the team the right to retain a player for one additional year at a set salary, or decline the option and make the player a free agent.
When are team option decisions due?
Team options must typically be exercised or declined by June 29th, just before the start of free agency. Some contracts may have different deadlines.
Why would a team decline a team option?
Teams decline options when the salary exceeds the player's current value, either due to decline in performance, injury concerns, or changes in team direction. Declining creates cap space.
Are team options common in NBA contracts?
They're moderately common, often appearing as the final year of mid-tier contracts. Star players typically negotiate player options instead, giving them more control over their careers.
What happens to a player when a team option is declined?
The player becomes an unrestricted free agent, able to sign with any team. If the team exercised the option, the player would remain under contract at the specified salary.