What Does the Rose Rule Mean?

Specific rules in the NBA are unofficially named after players. Some examples are the Charles Barkley rule, the Larry Bird exception, the Allan Houston rule, the Bruce Bowen landing spot rule, and perhaps half a dozen others. One such example, maybe one of the more obscure ones, is the Derrick Rose rule. What does the Rose rule mean, and how does it impact the current NBA?

Why is There a Derrick Rose Rule?

The Derrick Rose rule is designed to compensate overachieving players on their rookie contracts. The clause, enacted after Rose won the MVP while still on his rookie deal, permits young players to earn a greater maximum pay early in their careers – 30% of the cap instead of 25%.

The Rose rule may or may not make sense depending on one’s opinion. Sure, a player hoisting the MVP in a rookie contract is special, but it’s a unique case that doesn’t deserve a rule change. The other school of thought was that these players were so good that their old teams must have an advantage over the other franchises to secure their services.

Some may confuse the Derrick Rose rule with the Designate Rookie rule. The two are related but are not the same. The Derrick Rose rule is officially called the “5th year, 30% max criteria.” The following sections will discuss the specific criteria and the differences between the two related rules.

What is the Rose Rule in NBA?

The Rose Rule aims to give certain young players who meet specific criteria a larger max contract. Instead of the usual 25% of the salary cap, a qualified player is eligible to sign a deal with a salary of 30% of the team’s cap. Derrick Rose forced this exception because he won the league MVP in 2011 in just his third season.

Here are the Rose Rule criteria as specified by the Collective Bargaining Agreement:

• An All-NBA selection in the most recent or two of the previous three seasons.
• Won DPOY (Defensive Player of the Year) in the most recent or two of the past three seasons.
• Won the MVP (Most Valuable Player) Award in any of the past three seasons, a feat Derrick Rose achieved.
• Voted an All-Star Starter twice
• Suppose a free agent is coming off a four-year rookie deal or is a previous second-round selection or undrafted free agency with four years of experience re-signing with the existing team. In that case, he may be eligible for the Rose rule maximum.

The Rose rule is pretty much a performance-based incentive, something that NBA teams are fond of these days. Some may argue that these accomplishments– All-NBA selections and MVP awards– are no rational feats but are based more on fans’ and media perceptions.

While that’s a valid point, the case of players making All-NBA teams, much less winning MVPs, is quite rare. Case in point: Of the 15 players selected in the three 2021-22 All-NBA teams, only three are still in their rookie contracts, Luka Doncic, Ja Morant, and Trae Young. Going back one year, that distinction only goes to Doncic.

There will always be elements of luck and biased involved, but it’s not like Austin Reaves or Udoka Azuibuke will make All-NBA teams soon.

How is the Rose Rule Different from Designated Rookie Rule?

As mentioned, the Rose Rule contract and the Designated Rookie Rule are related but different types of contract rules. What are the differences between the two?

The Designated Rookie Rule enables a team to sign their own player who’s beginning the fourth year of his rookie contract to a longer extension. The NBA only allows teams to lock up players for a total of five years, but Designated Rookies may be locked for up to six years! 

For example, if Player A is on the fourth year of his rookie scale contract and the team decides to make him a designated rookie, they can extend him for five years instead of the usual four.

Here is one of the main differences between the Designated Rookie Rule and the Derrick Rose Rule: No performance benchmarks are needed for designated rookies. However, teams are limited to having a maximum of two designated rookies.

How does the NBA salary cap work for the Designate Rookie Rule? A designated rookie deal must include a beginning salary of at least 25% of the cap, which is generally the maximum compensation for a player with less than seven years of NBA experience. 

The designated rookie rule applies solely to players who sign an extension before the end of their rookie deal. If a player completes his rookie deal and then signs a new five-year contract with his team when he becomes eligible for restricted free agency, he is not officially a designated rookie, although he may look like one to the untrained eye.

The previous section already explained most of the Rose Rule nuances, but there are more clarifications. For example, the mere fact that a player is eligible for a Rose rule extension does not imply that a team must provide the full 30% maximum pay. That is still up for discussion between the player and the team, with an initial salary of 25-30% being feasible. Most Rose Rule contract negotiations are conditional to ensure impartiality between the players and teams.

5 NBA Players Who Signed Contracts Using Rose Rule

There is no doubt that the Rose Rule has made more young NBA players richer, but more often than not, they deserve the money. 

1. Derrick Rose

The rule was named after him, so he’s got to be here, right? After winning the MVP award in 2011, Derrick Rose signed a five-year, $94.3 million extension with the Bulls in the summer of 2012. Derrick made $5,629,082 in 2011-12, but that dollar figure jumped up to $16,402,500 in 2012-13.

2. Kevin Durant

Durant was the first actual recipient of the Rose Rule. KD was in the All-NBA First Team in 2010 and 2011 and benefited from the rule in 2012, while D-Rose got his own in 2013. Durant’s 2011-12 salary will be $15,506,632, and his five-year extension will total $89,163,135.

3. Luka Doncic

Donic qualified for the Rose Rule when he made the All-NBA First Team in 2020. The Mavs swooped up fast and locked him up for a whopping 5-year, $207 million extension, which essentially guarantees that Luka will be with the Mavs until 2026-27.

4. Trae Young

Young made an All-NBA team last year, so he was eligible for the Rose Rule, which the Hawks gladly gave him. He signed the full 30% max treatment, a five-year extension with Atlanta worth north of $215 million.

5. Ja Morant

Morant’s contract extension with the Grizzles spoke the Rose Rule language via certain conditions. If he makes an All-NBA team again next season, he will be able to earn an initial salary valued at 30% of the 2023/24 cap instead of 25%. Morant’s contract is worth $231.42 million if he passes the Rose Rule standards next season, or $192.85 million if he does not.

Wrapping Things Up: What Does the Rose Rule Mean?

The NBA’s Collective Bargaining Agreement is forged by lawyers from both the players and the owners’ side, so it’s not a surprise if it’s a little complicated for the casual fan. Franchises must understand the inner workings of the salary cap and who qualifies for certain contracts and who don’t.

Such is the case with the Rose Rule. What does the Rose Rule mean? Named after the 2011 MVP Derrick Rose, the rule states that any player on a rookie contract who meets specific performance criteria is eligible to receive an extension with a starting salary valued at 30% of the salary cap for the year. 

One of the Rose Rule criteria is if a young player won the MVP Award within the first three years of his contract, he’d be up to a maximum salary typically reserved for veterans with at least six years of experience. Rose won the MVP in his third season; thus, the rule was forged and known by his name.

Despite being named the Rose Rule, it was actually Kevin Durant who was the first beneficiary. Rose qualified for the extension and the Rose Rule in 2013, but Durant, who’s already a 2010 and 2011 All-NBA First Team member (also one of the criteria), was extended by OKC with the Rose Rule in 2012.

With this article’s in-depth explanation of this guideline, you’d be better equipped to answer the question, “What does the Rose Rule mean?” if it comes up anytime.

If you’re interested in learning Derrick Rose’s story, check out this basketball biography book.

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