What does the "Larry Bird Exception" specifically allow teams to do?

The Larry Bird Exception allows teams to exceed the salary cap in order to re-sign their own free agents. This provision is designed to help teams retain their key players, ensuring they can keep their core talent despite the limitations imposed by the salary cap. It is particularly beneficial for teams that have invested in developing their players since it allows for some continuity in team rosters without financial penalty.

This exception is named after the legendary player Larry Bird, who was a key figure for the Boston Celtics. The rule recognizes the importance of rewarding teams for developing their players and encourages them to keep their homegrown talent, which is crucial in maintaining competitive dynamics within the league.

The other answer options do not reflect the specific purpose of the Larry Bird Exception. For instance, signing new players to contracts or acquiring players from different leagues typically involve different mechanisms and do not allow for salary cap exceptions. Similarly, while trades may have their own rules regarding salary matching, they are not directly related to the Larry Bird Exception.