Any cap guru's out there?

[CitySushi]

I had a few questions regarding Free Agent signings and MLE questions:

1) Is there any maximum percentage/amount you can allot for an ascending salary contract? For example could you sign a player for a 2 year contract, which pays him 2M the first year and 5M the second?

2) For the MLE, does the MLE only apply towards the first year of a contract or the overall average value over the lifespan of the contract? For example if we have 3M for a MLE, can you sign a player to a 2-year 8M contract that pays him 3M the first year and 5M the second year? Or can you only sign the player to a 2-year 6M contract that pays him 3M annually?

I'm just wondering how the MLE works and if there are any loopholes to sign players to more lucrative deals like the examples above? Any insight would be awesome.

 

[CameronFrye]

I had a few questions regarding Free Agent signings and MLE questions:

1) Is there any maximum percentage/amount you can allot for an ascending salary contract? For example could you sign a player for a 2 year contract, which pays him 2M the first year and 5M the second?

Maximum raise allowed is either 4.5% or 7.5%, depending on the contract. The 4.5% raise max is generally reserved for MLE contracts or vet exception contracts. A player can have a huge jump in his year 2 salary, but he'd have to take a lower base in year 1 to get it. It doesn't make sense in most cases. But there are situations where it happens. (See below for an example).

2) For the MLE, does the MLE only apply towards the first year of a contract or the overall average value over the lifespan of the contract? For example if we have 3M for a MLE, can you sign a player to a 2-year 8M contract that pays him 3M the first year and 5M the second year? Or can you only sign the player to a 2-year 6M contract that pays him 3M annually?

Again, it's a 4.5% raise max. Plus, MLE contracts can only run three years. A team can give a player a low first-year deal then jack up the rates on the second year, but the total value of the deal has to match the price that a standard MLE would give over the life of the deal. Essentially to get a huge raise, the player would have to take a lower base pay in the first year.

I'm just wondering how the MLE works and if there are any loopholes to sign players to more lucrative deals like the examples above? Any insight would be awesome.

As for loopholes - hell yes there are loopholes. Everything I just stated is standard fare for contracts. But smart GMs can buck the system. For instance, Jeremy Lin signed a 3-year, $25 mil deal with Houston. Instead of giving him the maximum possible raise each of the years of his deal, GM Darryl Morey kept him at a low base pay for the first two years then ballooned the shit outta the third year. Because the total salary matched what would have been a standard contract, the NBA accepted it. And because the Bricks were in trouble with the NBA for violating the salary cap in consecutive years, they had restrictions on what they could do with future salaries. Morey knew that and stuck the "poison pill" provision into the deal to prevent the Bricks from being able to match without trading away valuable players.

Generally, the Lin type contracts are not done. But with creative and intelligent GMs, a lot of things are possible.

 

[CitySushi]

Appreciate the info. The reason I asked had a lot to do with the deal that Jeremy Lin received from the Rockets. I know Morey structured it so that it would highly affect the Knicks in the Luxury Tax as they had Chandler, Melo and Amare all locked up to huge deals. I was just wondering if the Warriors might be able to do the same, but I understand the restriction with the average salary deal with the MLE.

 

[CameronFrye]

Appreciate the info. The reason I asked had a lot to do with the deal that Jeremy Lin received from the Rockets. I know Morey structured it so that it would highly affect the Knicks in the Luxury Tax as they had Chandler, Melo and Amare all locked up to huge deals. I was just wondering if the Warriors might be able to do the same, but I understand the restriction with the average salary deal with the MLE.

Morey structured Lin's deal the same way he structured Omer Asik's deal. So if any team can convince the Rockets to trade Asik, the new team is going to ASSume a $5.2 mil deal this year and a balloon payment of $14.89 mil next season.

Personally, I don't think both are worth $14.89 mil combined. So for Houston to have to pay each of them that amount is crazy.

 

[NBKLee]

Okay, someone explain this one to me



Every time I threw up a possible incentive laid out deal for a FA, on other boards, I've been told you can't do that in the NBA, but this basically flies in the face of that argument.


If this was the case, why can't the Dubs throw out a similar deal for Oden? I know Oden may have 1 good pinky toe left, but we can offer him the vet minimum and bundles of incentives to play for us?

 

[NBKLee]

Sorta off topic, but here's the Cap figure this year 58.7 mil,

Tax set 71.1 mil

 

[CameronFrye]

Okay, someone explain this one to me



Every time I threw up a possible incentive laid out deal for a FA, on other boards, I've been told you can't do that in the NBA, but this basically flies in the face of that argument.


If this was the case, why can't the Dubs throw out a similar deal for Oden? I know Oden may have 1 good pinky toe left, but we can offer him the vet minimum and bundles of incentives to play for us?

Anyone who tells you that it can't be done does not know what they are talking about.

In practice, most teams guarantee a player's entire contract, but there is no rule that says a contract must be guaranteed. In the case of Bynum, his knee history pretty much demanded that he take a contract with a lot of non-guaranteed money. Of course, teams are allowed to build escalator bonuses into those deals, so Bynum will recoup much of his non-guaranteed salary based on playing time.

In the NBA, if 50% of a player's salary is guaranteed in the first year of a deal, they cannot guarantee more in subsequent years of the same deal. The Cavs cannot guarantee 50% in the first year then 75% in year 2. But they could guarantee 75% in Year 1 and then 50% in year 2.

As for the Oden idea, that guy is the poster child for non-guaranteed contracts. The only thing stopping a team from offering Oden a non-guaranteed deal seems to be his apparent reluctance to accept any deal right now. A lot of teams are pursuing Oden, including the Mavericks, the Heat, the Kings and the Pelicans. I don't think that Myers and the Dubs are even talking with his agent right now.