The CBA Glossary

An explainer thing for the NBA's Collective Bargaining Agreement

The Amnesty Provision

In previous rounds of Collective Bargaining Negotiations, such as in 2005, a clause was included in the final agreement that came to be known as the Amnesty Clause. It allowed NBA. teams to designate one of the outstanding contracts on their payroll as being exempt from the end-of-season luxury tax calculations.

For example, if a team had a payroll of $256 billion dollars against a luxury tax threshold of $40 billion, and one of their players was earning $220 billion alone, using the amnesty clause on that player would then put that team under the luxury tax threshold (as their payroll for luxury tax purposes was now considered to be only $36 billion). The player still got his money, and the teams got the reprieve -everyone, indeed, was a winner.

(The clause colloquially became known as the Allan Houston rule because of the misguided yet widely held belief that the Knicks would (or should) use the clause to waive Houston’s absolute unit of a salary. In fact, this never happened because New York knew Houston would eventually use a medical retirement clause instead. So, Houston became synonymous with an embarrassing moniker that was not justified. The Knicks used theirs on Jerome Williams instead.)

As mentioned above, that money stayed on the salary cap, and the players still received payment in full; the money was only saved with regards to luxury tax calculations. As was the explicit intent of the clause, it was truly the burdensome salary that was cut.

The 2011 CBA also had an amnesty provision, with an added caveat. Amnesty waivers were brought in, which allowed teams to claim part of the waived contract via a blind process, which led to some fun and precise bid amounts (such as the Lakers winning the Carlos Boozer bidding war with a $3.251 million claim). Players waived via the amnesty clause could not be traded back to the team that waived them for the duration of the amnestied contract, and, players waived the amnesty clause and subsequently claimed off of amnesty waivers could not be traded to anyone for the remainder of the season. There were some fun rules. They do not matter now.

The 2023 CBA does not have any amnesty provision, or anything akin to one. In years past, the league has pleaded poverty, screaming that its teams need to save money, while at the same time, the players union does not want its members to lose anything. The amnesty provision was a way for teams to save significant money without players losing significant money. However, in the current climate, the NBA cannot plead any poverty when everyone is making bank. There is therefore no amnesty provision in the NBA at the moment. Although let's rule nothing out for the future.