NEWSLETTER
With the front office effectively ruling Lonzo Ball out for the entire 2023-24 season, the organization applied for the Disabled Player Exception on Sunday.
Immediately after the news broke, I noticed a lot of confusion online about exactly what the exception meant. I thought it couldn’t hurt to add some context and explain why it might not actually be as helpful as some might think.
Hope this helps!
What Happens First?
A team applies for a disabled player exception when it’s far more likely than not that an individual will miss the entirety of an NBA season. The league office will now have to review the submission and agree that it’s highly unlikely that Ball sees any playing time this year.
The Bulls were unable to begin this process until the start of the new league year, which was July 1st. It may now take some time for the league to go through their protocol, but Ball’s recent injury history could help them come to a decision sooner than later. As Bulls fans know well, Ball has undergone three different surgeries on his knee since January 2022. There are real questions about whether or not the young point guard will ever truly be able to suit up for NBA action ever again.
Is Ball Still on the Team?
I saw this misinterpreted a lot online when the news first broke. Lonzo Ball isn’t going anywhere. He is still a member of the Chicago Bulls organization and still on the team’s payroll.
In other words, the Bulls didn’t apply for a career-ending injury exception. This is simply a provision that deals with his availability for the 2023-24 season and nothing else. If they do eventually apply for the career-ending injury exception, I believe they can have the entirety of his remaining salary written off the books (Ball would still get his money but it wouldn’t count against the cap).
How Much Can the Bulls Get?
A Disabled Player Exception allows a front office to receive half of a player’s salary for that season. Lonzo Ball is set to make $20.4 million this upcoming year, which means the Bulls would receive a $10.2 million exception.
Who Can They Use It On?
If the Chicago Bulls wanted to use the cash to sign a free agent, they can only ink that player to a one-year deal worth a maximum of $10.2 million. Similarly, if they want to acquire a player via trade or pick someone up off waivers using the exception, that player must be in the final season of his current contract.
To put it differently, it’s highly unlikely the Bulls would be able to use this DPE to make a run at an RFA like Boston’s Grant Williams. Not only do I doubt the league approves the exception in time, but Williams isn’t going to want a sign a one-year deal. Instead, the far more likely outcome would be the Bulls going after a player similar to Zach Collins of the Spurs, whose $7.7 million salary would fit into the exception.
The exception can also only be used on ONE player.
Why Might They Not Use It At All?
The DPE is a far more restrictive exception than meets the eye. This isn’t just free cash the Bulls can spend without it showing up on the books. Any use of the $10.2 million exception would work directly against the luxury tax. And, for the Chicago Bulls, we all know the luxury tax often operates as a hard cap.
While the organization has declared that they have the green light to exceed the tax, they have yet to do so this season. Instead, they have used the mid-level exception to sign guard Jevon Carter to a three-year deal with a $6.7 million AAV. They also recently signed Torrey Craig to a two-year deal, but whether this came via the remainder of the MLE or the bi-annual exception worth roughly $4.5 million is unclear. Regardless, adding in the new deal for Coby White this offseason (which is believed to have an AAV of roughly $11 million), the Bulls reside just about $5.3 million away from the tax (including Ayo Dosunmu’s cap hold).
This number could change if the team sees Ayo walk. But, assuming he stays, Chicago would still have a few more full-time roster spots left to fill with likely veteran minimums. In other words, it’s hard to envision any situation right now where the Bulls could use most or the entirety of the $10.2 million exception without entering the tax.
I guess I should clarify that if it was granted this second, Chicago could use it instead of their remaining $5.7 million of the MLE to sign a player and stay below the tax. But then it would be the remainder of the MLE that likely isn’t being used.
Now, if the Bulls decide they want to finally go over the tax, then there isn’t as big of an issue here. The only thing we’d have to keep in mind is that they are hard-capped due to signing Carter with the MLE, which means they can not exceed the first tax apron (about $7 million over the luxury tax line). But, again, whether the Bulls will actually put themselves in a position to pay the tax for only the second time in franchise history is fair to doubt.
The timing of when the team gets this exception is also a big deal. The chance of them receiving it in time to use on one of the best remaining free agents is low. With that added context, the overall most likely situation would be that the Bulls wait to use it for a trade – if at all. Perhaps if the team is in a legitimately competitive position around the trade deadline, the team would opt to go into the tax to add a player for a playoff push. Although, if the Bulls are in that good of a position, I can already envision the front office saying something like “we like the group we have” and allowing the exception to go to waste.
So, yeah, this probably isn’t as exciting as you once thought it was. It’s still better to apply for the exception and give yourself maximum flexibility, but there is a very real possibility this money just goes to waste (as it has for many teams in the past).
H/T to CBAFAQ and Hoops Rumors for some added clarification
