How Lonzo’s disabled player exception impacts Bulls in free agency

Barring the signing of former Milwaukee Bucks guard Jevon Carter, the Chicago Bulls have undoubtedly been relatively quiet when it comes to adding fresh talent this free agency period. That could all change soon, however, if the Bulls are granted the Disabled Player Exception they applied for due to Lonzo Ball‘s extended absence.

This news directly contradicts Karnisovas’ previous statements, as he previously seem determined to ride Lonzo’s contract out despite the assumption Ball would not suit up for the Bulls this season. “No, I hope eventually that you’re going to see him on a basketball court again, but I don’t expect him back next season,” said Karnisovas.

Heavy.com’s Joshua Buckhalter recapped Karnisovas’ statements to the media following the conclusion of the 2023 NBA Draft here in this excerpt below.

"“[Karnisovas] also said that the team is not considering applying for the disabled player exception which would allow the Bulls to clear half of Ball’s salary off their books for this season, perhaps providing some wiggle room to further improve the team in his absence. Karnisovas’ answer still establishes the Bulls’ belief that Ball will miss the upcoming season.”"

Shams Charania of The Athletic was the first to break the news of Chicago’s decision to apply for the Disabled Player Exception.

The Bulls may be temporarily unburdened from Lonzo Ball’s albatross contract if granted a Disabled Player Exception in free agency.

Before we get too far ahead of ourselves, it must first be noted that Chicago will need an NBA-pointed panel to grant their approval before the Bulls can get to work recruiting free agents. Given the relative quickness the league has handled these situations in the past, and the fact it’s all but confirmed Ball will not play this season, I’m patiently awaiting good news from the league office soon.

The DPE works differently than other common exceptions we’ve seen the Bulls use in the past, such as the Mid-Level Exception and Bi-Annual Exception. Unlike the MLE and BAE, the Bulls can only use this DPE as a direct replacement for an injured player, meaning players can only be acquired on a one-year deal under this exception. The DPE also grants teams an exception equal to half the yearly salary of the injured player in question. Fortunately, Lonzo’s hefty $20.4 million salary means the Bulls will receive a sizeable $10.2 million exception if granted.

This leaves Chicago with two distinct routes to take:

1. Sign a free agent outright to a one-year deal
   • The most notable remaining free agents, such as Grant Williams and P.J. Washington, will likely be looking for a multi-year deal, rather than a one-year term with little future financial security.
   • This route does, however, give the Bulls a distinct advantage in signing veteran talent to short-term deals as most contenders will likely only be able to offer veteran minimum contracts at this point.
2. Sign-and-trade for a player in the final year of their contract
   • This avenue will be more difficult to explore, as other teams will likely wish to receive assets or incentives in return. That being said, it does offer the Bulls far more options and flexibility to round out the roster.

No matter what decision the Bulls decide to make, it’s important to note that this exception would not clear Lonzo’s contract from the books for this season, and the exception itself would also count against the salary cap. After signing Carter, the Bulls hard-capped themselves at $172 million. With $152 million already invested in the 11 players currently on the payroll (LaVine, DeRozan, Ball, Vucevic, White, Williams, Caruso, Carter, Drummond, Terry, and Phillips), that leaves only $20 million left to spend to use this exception, ideally re-sign Ayo Dosunmu, and address the lack of forward depth. Even with the exception, this won’t be an easy task to manage.