Hardship Exception

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The Memphis Grizzlies set a record this season having a total 33 different players on their roster, which breaks the previous record of 28 also set by the Grizzlies in 2015-16 and 2018-19. Of the 33 players, 12 were signed to a hardship exception. What exactly is a hardship extension and why would a team need to use it?



 

Normally, NBA team rosters are capped at 15 players on standard contracts, with up to two additional players on Two-Way contracts. The hardship exception allows a team to exceed this limit temporarily. This is crucial during periods when injuries deplete a significant portion of the roster, ensuring that the team can continue to compete effectively without permanent or long-term changes to their roster composition.

 

A hardship contract is 10 days long and can be renewed once to the same player. After the second 10 day stint, the team has to sign the player for the remainder of the season if they want to keep him. Typically, the salary for a 10-day contract is calculated as a pro-rated share of the minimum annual salary appropriate to the player's years of experience in the league. This amount does not count towards the team’s salary cap.

 

A team is eligible to sign players under a hardship exception when they have four players who are either injured or ill and under standard NBA contracts. Specifically, the first three players must have missed at least three consecutive games due to injury or illness, and it is expected that all four will continue to be unable to play for at least two additional weeks. The determination of whether a player is expected to be unable to play for at least two weeks, making a team eligible for a hardship exception, is made by a physician designated by the NBA.



 

Teams can exceed the standard roster limits using hardship contracts when they have an unusually high number of injured players. This temporary adjustment is not possible with standard contracts, which would require permanent roster spots and possibly necessitating the release or trading of other players to make space. Under the NBA’s hardship rules, teams are allowed to have more than 15 players on the roster temporarily.

 

It is important to note that even when a player is injured, their salary still counts towards the salary cap. This rule applies even if the player is out for the season or a significant part of it due to their injury (other than if granted a Disabled Player Exception). Therefore, the hardship contract is particularly important for NBA teams in staying cap compliant and minimizing tax burdens.

Published April 15, 2024.