On what basis can teams extend offers to first round draft picks?

Teams can extend offers to first-round draft picks according to the Rookie Scale. The Rookie Scale is a predetermined salary structure established by the NBA that outlines the maximum salaries a player can earn during their rookie contract based on their draft position. This scale offers a standardized approach to salary for first-round picks, ensuring that players receive equitable compensation that aligns with their selection in the draft.

Due to this structure, teams are not free to negotiate arbitrarily with first-round picks; instead, the Rookie Scale dictates the terms of the contract offers, providing clarity and fairness across the league. This system is essential for managing team payrolls and maintaining competitive balance within the NBA, as it prevents outlier contracts for rookie players shortly after the draft. Other options do not accurately reflect the established procedures or limitations regarding rookie contracts.