Two-Way Contracts: Superficially Alluring yet Fundamentally Flawed
Two-way contracts
Briante Weber (Tim Warner/Getty Images)

“I think two-ways are the worst thing to happen to players in a long time.”

This was said by an unnamed NBA agent via text regarding the league’s newest darling, two-way contracts. It is the kind of blunt negativity that is directly antonymous with the norm. These deals are usually gushingly praised instead of critiqued in a way that suggests they never should have existed in the first place.

Two-way deals are so beloved essentially because they create 60 more jobs in the NBA. Each team is awarded two and the low salary that is paid out does not count against the cap. These deals are given to young players and are used by teams in need of a player usually following an onslaught of injuries. The players on these contracts mainly reside in said team’s G League affiliate for most of the year.

The constant praise over these deals also occurs because of the storylines that are inherent to them. Their simple existence creates a massive amount of job opportunities for those that may have never gotten a chance. The stories that come from the successes are then like content candy to NBA journalists.

That opening statement does, however, reflect a burgeoning opinion amongst some NBA agents. New things do usually go through a probationary period filled with discomfort but the problems with these deals run deeper than a simple change.

The obvious issue with these new deals is the dramatic drop in money that players are given. Minimum deals for a player with no experience is $838,464 and a player who has four years of experience (the maximum level of experience for a two-way eligible player) is $1,621,415 . The most any player can receive on a two-way deal is $275,000 with most getting much less. This happens because teams purposefully do not allow their two-way guys to accrue the necessary 45 games of experience to receive it.

The same anonymous NBA agent said, “teams are explicitly violating 2-way compensation rules. There’s no good way to ‘police’ these deals. Agents get paid basically nothing on these deals and teams flat out lie to try to steal money from, and exploit, 2-way contract players.”

This is not the only way that teams have gotten away with paying their players significantly less. A type of contract called “Exhibit 10” exists within these deals and they are pennies compared to what was offered in the past. NBA agent BJ Bass illustrated how this is a significant blow to players hoping to make legitimate money in the NBA. “You used to be able to do partially-guaranteed contracts – for example team could offer $500k – and if the player doesn’t make the team out of camp – he gets the $500k and goes to the G League. With the Ex10, the cap is now $50k – and the team had the right to convert to 2-way within 60 days.”

Essentially, their second qualifying offer is just another two-way contract which is adjacent to restricted free agency. Not only are players getting offered significantly less money because of this but they have far less control over their futures. Any player who does not perform well enough to make it on an active roster does not just get pushed down to the G League. Under two-ways, they become restricted to the G League team that owns their two-way contract. A player under a two-way contract in the G League can’t be picked up by whatever team may need them but instead is only allowed to be called up by the team their affiliate is under.

Josh Magette (Photo by Scott Cunningham/NBAE via Getty Images)

This not only hurts the player but then, in turn, hurts teams that may be in need of a certain player. An anonymous NBA agent explained why:

“Teams previously could access all the top players in the g-league if they needed/wanted to. Now they’re very limited. If a team needs to call up a PG, they will not be able to call up the best PG in the G-League since he’s likely locked in on a 2-way with someone else. Mathematically, they probably won’t be able to call up any of the top 12 PGs actually (60 2-ways means roughly 12 at each position). The previous system allowed “poaching”, as some teams called it (e.g. Dallas poaching Yogi from Brooklyn). But that works both ways. And each team could “poach” from 29 others. Personally, if I ran an NBA team, I would rather allow myself to be poached while being able to poach from 29 others. Odds are always going to be in your favor in this system since there’s only a 3.3% chance (1 team out of 30) that you have the best player at a given position. Thus, “poaching” gives you the ability to access the other 96.7% of players where the best players most likely reside. And every team can access this equally, so it works for everyone.”

Due to all of this, agents are beginning to believe that the best fringe players are running to Europe. Most are in search of not only more money but more freedom. Bass is one of those agents, “This pushes the top talent to Europe – and significantly waters down the talent pool teams have to pick from out of the G-League.” A league that one would assume the NBA would want to be as talent rich as possible.

These problems are not what the league was hoping for when creating two-way contracts but this is only their first year of existence. Some agents are extremely happy that their players, who may have never have gotten a chance to play in the NBA, now get a shot. Ed Grochowiak believes, “He (Reggie Hearn) may not have ever played in the NBA if it not were for two-way contracts.” Grochowiak, after just one year, was completely enthralled with what the NBA is doing to create more jobs.

Another anonymous NBA agent stated that he “generally likes” two-way contracts and saw no clear reasons to want to get rid of the deals.

The problem seems to be the disconnect between upper and lower level G-League players. Those clearly deserving of a roster spot are being shortchanged while the players whose path is not so clear are finally getting a chance.

Gary Payton II (Mark J. Rebilas/USA TODAY Sports)

The negatives simply seem to outweigh the positives at this point as another unnamed NBA agent said, “more guys were pissed than happy in the first year” and “for guys like Briante Weber, it sucks for him. The Rockets were fucking loaded. They gave him a two-way contract and cut him in the middle of January. I would be fucking pissed.”

Two-ways are a fantastic idea that may simply be going through growing pains but it seems much more likely there needs to be significant changes to the system.

One possible solution may be having an increased wage for experience, much like the one that exists for minimum deals. Each year of experience netting a player more and more money. Another would be to allow the second qualifying offer be a legit qualifying offer and not another two-year deal. Doubling down on a two-way contract is an easy decision for any NBA team but a tough thing to accept for many hopeful NBA players.

Two-ways could also allow for “poaching” when players have been stuck in the G League for a certain amount of days with no NBA playing time. The last and most obvious solution would be to simply pay these players more.

These deals, on the surface, provide a lot of value to the league. When diving deeper, it is quite easy to see something much less appealing. One year is not a great indicator of the complete value of any one thing. It takes much longer to understand something fully but, right now, two-way contracts are not the perfection they are perceived as. And there is a chance, they may never be.



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