The first week of July marks the league’s annual moratorium, a period when the NBA’s cap calculations are finalized for the upcoming season. The season cycle typically begins on July 1, and during this time the league’s financial teams determine the exact salary cap, reserve provisions, and related rules that will govern the new year.
During the moratorium, teams face restrictions on many moves. Most free-agent signings and trades cannot be completed, though teams may begin negotiations with free agents. This creates a lot of buzz and constant updates on social media, but actual transactions are limited.
A common point of confusion is the purpose of the moratorium. Rather than simply delaying free agency, the period often accelerates it. Because teams cannot immediately execute most deals, they spend weeks preparing in advance—organizing contingency plans, prioritizing targets, and lining up negotiations so that activity can start as soon as the window opens. As a result, the early hours of free agency are frequently the busiest of the offseason, with large deals sometimes being agreed within minutes of the permitted start. In some years, hundreds of millions of dollars’ worth of deals have been reported within the first hour of the window.
For league officials, the moratorium is an exceptionally busy administrative stretch. Hundreds of contracts, option decisions, tenders, guarantees, and trade documents require review in a short timeframe. By the time the moratorium ends, much of the offseason groundwork has already been laid. The remaining period often involves formalizing deals and finalizing paperwork that had been tentatively agreed earlier.
What teams can do during the July Moratorium
From 6:00 p.m. Eastern on June 30, teams can:
– Negotiate with unrestricted free agents from other teams
– Negotiate with restricted free agents about potential offer sheets
From 12:01 a.m. on July 1, teams can:
– Negotiate extensions, including veteran and rookie-scale deals
– Sign restricted free agents to their qualifying offers, including maximum qualifying offers
– Sign tenders
– Waive players
– Claim players off waivers
– Convert a two-way contract into a standard NBA contract
From 12:01 p.m. on the same day, teams can also:
– Sign offer sheets (twelve hours after negotiations began)
– Sign players to the Second Round Exception
– Sign players to two-way contracts
– Sign rookie-scale contracts
– Convert Exhibit 10s into two-way contracts
– Sign players to minimum-salary contracts (for up to two years, which is the maximum length allowed under the Minimum Salary Exception)
What teams cannot do during the July Moratorium
– Make trades other than waiver claims
– Sign free agents to contracts beyond the aforementioned allowances (including using cap space or mid-level exceptions)
– Sign extensions
This framework effectively restricts the majority of free-agent movement for the initial week, while allowing structured progression as soon as negotiations begin.
A note on the timing
The negotiation period opening at 6:00 p.m. on June 30 is a relatively recent adjustment designed to start conversations at a more convenient hour. Previously, teams waited until midnight between dates to begin discussions, but the window was moved forward starting in 2019 to better align with practical workflows.
Public announcements during the moratorium are restricted. Neither teams nor players (including agents) are allowed to publicly announce agreements that cannot yet be officially signed. Media leaks commonly occur, but official confirmations are typically not disclosed until the appropriate time. In certain years, leagues have allowed limited public discussion of agreements, but the general rule is to avoid formal confirmation until paperwork is finalized.
Typically, the moratorium runs from the season’s start on July 1 and ends at noon on July 6, subject to extraordinary circumstances.
In summary, the July Moratorium is a carefully managed period designed to set the stage for the offseason. It balances restricted immediate moves with an expanded, pre-planned negotiation phase, ensuring teams can quickly finalize agreements once the window officially opens. This structure helps maintain order in the transfer process while enabling meaningful activity to commence as soon as permissible.
