What Does a Two-Way Contract Mean in NBA?

When the drafting process for NBA begins a lot of aspiring new prospective players are waiting for their name to be called. However, coaches see things differently and want the best of the best in their teams.

For the players who do not get selected during a draft, NBA takes on the new aspiring talent to help them polish their skills by playing in the G-League.

G-League is a place where the new talent can hone their skills playing professional basketball. It also allows these players to have a chance to sign a two-way contract with the NBA. Here we will try our best to depart knowledge on how a two-way contract works and what does it mean.

What Does a Two-Way Contract Mean in NBA?

The two-way contract is a way to ensure that the player gets paid for playing in either of the leagues that are NBA or the G-League. Let’s elaborate with an example for instance; a player is signed by New York Knicks and the West Chester Knicks.

He gets paid the G-league salary while playing for the West Chester Knicks and is paid an NBA minimum rookie-level salary while on the roster of the New York Knicks.

Why offer a two-way contract?

A two-way contract allows the players to get the practice they need before they can be chosen for the NBA. It’s a great way for the team to make sure their chosen talent is getting the experience they need before they can take up a spot on the roster.

Not being chosen for the NBA during the draw can be very disappointing, however, the disappointment leans away when the teams offer the players a two-way contract to improve their performance.

This method allows the coaches to monitor the performance of the player for a year or more. And when it’s time they can end up joining the team. The best part is the player gets the practice they need along with a retainer fee that keeps them working hard and motivated.

When were two-way contracts initiated?

The two-way contracts are a common practice of the NHL, which signs up players based on their talent and skills. Then send them in to play for the AHL that is the American Hockey League, the affiliate team of NHL that helps foster the new talent and hone their skill before they can play in the NHL.

The NBA began this practice in the year 2017-18 and offers it exclusively to those players who do not get drafted in the NBA league. According to the rules, these players can only spend 45 days on the roster of the affiliate team and have to spend the rest of their time in the G-league.

Teams in the NBA have a maximum limit of two undrafted players to be chosen to be on the roster. This further allows the coaches to move their undrafted players freely from the G-league to the NBA team. This also takes the number of players for each team up to 17 players on the roster.

What is the salary compensation of a two-way contract?

The salary for the players who go undrafted and end up in the G-leagues can make a good salary for the days they spend in the G-leagues and if chosen for the 45 days on the NBA roster the amount goes up significantly.

A player who is in the G-leagues gets paid $45000 and if chosen for the NBA roster, the 45 day period then the salary bumps up to $204000. It is a win-win situation essentially for both the team and the players.

Two-way contracts, worth it or not?

Choosing the undrafted players to play in the G-leagues and improve their skills to become polished enough to join the NBA squad seems like an excellent idea to promote the new talent. However, some people do not agree with this approach as much.

If the players perform well they get chosen by the NBA leagues and can play with them as an NBA player. However, if the team and coaches don’t believe that they are the right fit for the team, the NBA team can simply walk away at the end of the two-way contract tenure. This makes it a win-win situation for both the players and the teams.

Let’s look at some pros and cons of signing the two-way contract:

Two-Way Contract Pros:

Lifelong dream fulfillment:

The two-way contract allows players the opportunity to play in the major leagues and also hone their skills in the G-leagues. Yes not being drafted can be a big blow to the player’s morale but being chosen for the G-leagues helps them inch their way closer to the NBA league and that’s what matters.

Coaching tips:

Playing as a two-way player, allows you to work with the NB talent and personnel like coaches and trainers. This is the best way to learn and gain the skills you need to be chosen for the NBA.

Two-Way Contract Cons:

Lesser Earning:

Players do earn through G-league and NBA, but the amount they can earn from overseas games is a very large sum of money and that puts a damper on the amount that is given to the player by NBA and the G-league.


The players who sign the two-way contract essentially sign their life off. Their freedom is gone and they have no say in anything as they are not considered as important. Some players are okay with playing the G-leagues and do not have any intention of playing for the NBA.


Now we know what does the two ways contract mean and how it is important for the players who are aspiring to join the NBA team. We also shed some light on the G-Leagues that help the players hone their skills in a professional basketball playing environment and how it matters to the players.