What exactly happens when a team and a player agree to a buyout? A buyout is a negotiated agreement in which a player gives up part of the guaranteed money left on his contract in exchange for the team releasing him.
The mechanism is not theoretical right now. In 2026, the Dallas Mavericks released Klay Thompson from $17.5 million owed for the 2026-27 season, and after he cleared waivers he signed a two-year deal worth roughly $13 million with the Miami Heat.
Heat president Pat Riley did not hide his enthusiasm about the fit: “Klay is one of the most iconic players to ever suit up in the NBA. A four-time battle tested world champion who will fit perfectly into his role as an all-around player at both ends of the court. We all talk about his shooting skill, but there is so much more he brings to the game. We are blessed that Klay chose the Heat in our quest to challenge for championships,” Riley said.
What happens after a buyout is signed?
The player does not become a free agent immediately. He is placed on waivers for 48 hours before he can sign with a new team.
Who can claim a player during the waiver window?
Any team can claim him during those 48 hours. If more than one team files a claim, the team with the worst record gets priority and absorbs the remainder of his existing contract.
If nobody claims him, he clears waivers outright. At that point he becomes an unrestricted free agent who can sign with any team he chooses.
The full sequence runs through the same fixed steps every time:
- The player and team agree on how much guaranteed money he gives up.
- The team formally waives him.
- A 48-hour claim window opens; the worst-record team wins if there are multiple claims.
- If unclaimed, he clears waivers and signs as an unrestricted free agent.
How is a waiver different from a buyout?
A waiver, unlike a buyout, is a unilateral team decision. There is no negotiation with the player, and the team stays on the hook for his full remaining salary.
Why does the cap math matter?
Whatever amount a player gives up in the buyout comes off the team’s cap sheet, while whatever remains stays on the books. That is why buyouts typically happen in the final guaranteed year of a contract.
Why do teams agree to buyouts at all?
Teams pursue buyouts for cost savings and roster fit. They also use them to let respected veterans chase a championship elsewhere.
Are there limits on which teams can sign a bought-out player?
Under the current collective bargaining agreement, a team above the first or second tax apron cannot sign a bought-out free agent whose pre-waiver salary exceeded the non-taxpayer mid-level exception amount. For the 2024-25 season that threshold sat at $12,822,000, with the first apron itself set at $178.132 million.
The rule is designed to keep competitive balance between high-spending and lower-spending franchises, preventing the wealthiest contenders from stacking bought-out stars.
The 2025 buyout cycle showed the rule in motion across several rosters. Ben Simmons moved from the Brooklyn Nets to the Los Angeles Clippers, Alex Len went from the Washington Wizards to the Los Angeles Lakers, and Torrey Craig left the Chicago Bulls for the Boston Celtics.
What does history say about the buyout market?
The size of these agreements varies widely. Carmelo Anthony gave up $25.5 million of a $27.9 million salary in his 2019 buyout with the Hawks, while Dwyane Wade gave up $8.3 million of $23 million to leave the Bulls for the Cavaliers in 2017.
The payoff for teams can be significant. P.J. Brown signed as a buyout-market veteran and won a championship as a role player with the 2008 Celtics.
Readers who enjoy rules explainers like this one may also want the breakdown of World Cup 2026 extra-time rules or how UFC judges score a fight.
When do most buyouts actually happen?
Buyouts cluster around the All-Star break and rarely appear after March 1. That date is the deadline for a player to be eligible for that season’s playoffs with a new team.
