A two-way contract is a professional sports contract which stipulates that an athlete’s salary is dependent upon the league in which the athlete is assigned to play. This is opposed to a one-way contract that would pay the same salary regardless of where the athlete is assigned to play.
Two-way contracts are common for professional ice hockey players who aspire to play in the National Hockey League (NHL). Any hockey player entering the NHL for the first time will sign an entry-level, two-way contract with an NHL team stipulating that he will receive a higher salary if assigned to play with the NHL team, but will receive a lower salary if assigned to play for a team in the minor leagues such as the American Hockey League or the ECHL.
Beginning in the 2017–18 season, the National Basketball Association added two-way contracts between NBA teams and their NBA G League affiliates. Unlike in the NHL, these contracts are not offered to every aspiring NBA player, but only to undrafted players whom a team would like to keep "on retainer" without having to sign to a full-time contract. Each NBA team can have up to two two-way contract players per season, and are typically considered to be "16th and 17th men" on a roster. Excluding time spent before and after the G League's season begins and ends, players on two-way contracts can spend up to 45 days in the NBA while spending the rest of the season in the G League. As of the 2017–18 season, players earn $75,000 while they are in the G League and roughly $204,000 if they spend the maximum 45 days on an NBA roster. The two-way contract system benefits young undrafted players who do not want to play professional basketball overseas, as well as those who believe an organizational investment in them is beneficial to their development. Some player agents are concerned about this system, because in exchange for guaranteed employment at a higher salary than a typical G League player, two-way players give up the freedom to be called up from the G League by any NBA team, possibly one with intent to sign the player to a 10-day contract, which could eventually lead to a full-time NBA roster spot sooner than with a two-way contract.
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