CBA Scenarios: The Amnesty Cut
The NBA and NBPA seemed to be on the verge of an agreement to end the lockout last week but once again talks died out with no deal.
An additional two weeks of the season were cancelled and while some may still be made up, Commissioner David Stern said in certain terms that there won’t be a full 82-game schedule.
The best to hope for is rumored to be 78 games if the two sides can reconvene this week and scratch out a deal. Despite the rhetoric and vitriol, there’s a relatively small gap left to close with the owners willing to go up as high as 50% of Basketball Related Income (BRI) and the players down to 52.5%.
In the meantime, some of the details of what will likely be in the new Collective Bargaining Agreement (CBA) have leaked out. The proposed the Amnesty Clause was touched upon in two articles recently (Getting the Lakers Under the Tax and Getting the Magic Under the Tax) but how would the “Get Out of Jail Free” card impact the league as a whole?
In the 2005 CBA, teams were able to cut a single player in a one-time move that trimmed those dollars off the luxury tax computation but the money still counted against the cap (and of course went to the waived player).
The proposed Amnesty would have 75% of the salary coming both the tax and the cap.
It may also be a tool teams may be able to bank for the future (the 2005 Amnesty had to be used within two weeks). Would that enable teams to deal for players with awful contracts by the trade deadline and then cut them lose to gain the cap/tax savings?
The provision is said to only include players under contract before the current CBA but timing may allow for some wheeling and dealing with Amnesty in mind.
Additionally teams may be able to use a Stretch Exception to cut a player while paying out their salary over twice the length of the contract (plus a year). Certainly the Stretch Exception will impact who teams use the Amnesty on.
Given the additional roster spots along with spending power under the cap and tax, the Amnesty wouldn’t be about saving money for the league but some level of improved parity, in that every team gets the chance to erase a mistake.
Looking at the contracts around the league . . . there have been a lot of mistakes.
Approximate Cap/Tax Levels
Last season, teams averaged about $67.5 million in payroll.
The rules are still in flux but if the cap is set to $7 million less than the average (as proposed), it’d be about $60.5 million for the coming season.
The players are going to get compensated less than they did a year ago but that may not directly impact the cap number itself but on reductions in contract length, raises and harsher tax penalties to discourage spending.
In fact, the new CBA is expected to have a higher payroll floor than the previous term. It’s also noteworthy that the total player salaries last season did not reach 57% of BRI.
Additionally, if the tax is $5 million more than the average (as proposed), it would be set at about $72.5 million.
There’s no true way to know today where those numbers will fall but that’s a reasonable estimate. Naturally if the cap sticks at $58 million or drops any lower, the projections to follow would be similarly impacted.
Teams Under the Cap
Rashard Lewis. That’s $15.9 million off the books for the coming season to put the team’s total at slightly under $30 million.
The Kings need to add salary to reach the league minimum. They can add $4.4 million in additional space by dropping Francisco Garcia but that money will need to be spent somewhere else to get the team up to about $51.4 million.
Dropping Garcia would put the Kings at about $30 million.
If the Raptors Amnesty Jose Calderon, they’d have about $20 million to spend but no point guard to speak of on the roster (Jerryd Bayless is barely a combo guard, let alone a one).
It might make more sense to drop Leandro Barbosa’s final year to save $5.7 million instead of $7.3 million on Calderon (although Jose would also give the Raptors another $7.9 million the following season).
The Pacers have plenty of spending power this summer and their “ugliest” contract past this season would be Dahntay Jones at a meager $2.9 million.
The Amnesty would be James Posey to increase the team’s cap room by $5.7 million to roughly $29 million.
Los Angeles Clippers
The Clippers may have in the neighborhood of $14.5 million in cap (before having to deal with restricted free agent DeAndre Jordan).
The team is looking for a starting small forward to replace Ryan Gomes. Amnesty could add $3 million to the team’s cap over the next two years but using the Stretch Exception on Gomes would be nearly the same with an additional $2.4 million in cap.
One option, if the team can’t find the right trade for center Chris Kaman, would be Amnesty. The Clippers would immediately add on another $9.5 million in space to about $26 million.
The tricky part is finding the right small forward to sign with that money. Would Jason Richardson, Jamal Crawford, Arron Afflalo, Nick Young, Thaddeus Young, Jeff Green, Caron Butler, Tayshaun Prince, Shane Battier, Marcus Thornton or Andrei Kirilenko fit the bill?
None are ideal but then the Clippers could also look to use their cap room in trade. Along with their unprotected 2012 Minnesota pick, would they be able to entice a team to give up a top-tier player?
New Jersey Nets
The Nets have tremendous spending power this summer and should look to dump last summer’s mistake, Travis Outlaw, to gain $5.3 million in cap space each year for the next four seasons.
If the team instead used the Stretch Exception ($3.9 million in cap savings but a $3.1 million cap hit each year over nine straight seasons), the team could then Amnesty Johan Petro for another $2.4 million in space.
With both Outlaw and Petro gone, the Nets might be able to get to about $25 million under the cap.
The obvious move would seem to be Baron Davis who is on hook for $27.2 million of guaranteed money over the next two seasons.
Amnesty would drop the Cavaliers to roughly $8 million under the cap in the first year and trim off another $9.2 million off their cap number the following season.
Cutting Antawn Jamison would do about the same for the Cavs (as far as cap room this summer) but given he’s in the final year of his deal, Cleveland may instead find suitors for Jamison in trade.
Golden State Warriors
The Warriors had a chance to send Andris Biedrins out at the deadline for expiring contracts but passed. Golden State is a team in need of a defensive-minded big and Biedrins is the closest they have to that.
Still, trimming off $6.8 million off their cap for the next three years makes a lot of sense. Use the Stretch Exception on Charlie Bell and the Warriors are looking at about $19 million in cap space.
That should be enough to make a strong run at Nene, who would be a tremendous fit.
That seems like a no-brainer but if the team decides to stick with Biedrins, then the Amnesty on Bell is an anti-climactic move, but one that should give the team about $12.5 million in space this summer.
The Bobcats could use the Amnesty Clause (or Stretch Exception) on any number of players including Boris Diaw, Corey Maggette, DeSagana Diop, Matt Carroll or Eduardo Najera.
The team is rebuilding and needs both rookies (Kemba Walker and Bismack Biyombo) to become cornerstone players.
Of the names listed above, Maggette makes the most and could help the Bobcats get in the neighborhood of $16 million under the cap.
Then again, Corey can still contribute on some level while Diop hasn’t been a regular player for some years now and could help Charlotte to get about $14 million under the cap.
Another interesting Amnesty option might be Tyrus Thomas who is on the books for $33.4 million over the next four years but at 25 years old, he’s still a developing talent worth keeping at a (somewhat) reasonable $8.3 million a season.
The Rockets aren’t holding onto any unpleasant contracts. They’re looking at about $10 million in cap (if they let Chuck Hayes go) so trimming off Hasheem Thabeet to add another $3.8 million in space could be of use when it comes to chasing free agents. That said, the Rockets have high expectations for Thabeet (justified or not), and he is the only center currently on the roster. It seems highly unlikely they Amnesty him.
The Jazz are finally out of tax trouble. Dropping Mehmet Okur via Amnesty would give the team about $7 million in cap space to replace Andrei Kirilenko.
Raja Bell would make a lot of sense via the Stretch Exception to give the team another $1.9 million in cap.
The Nuggets are looking to retain free agents Nene and Arron Afflalo (restricted) but even if both stay, the team should still have cap room to work with.
They can increase that number by dumping Al Harrington who has $20.3 million guaranteed over the next four seasons. Amnesty would turn Harrington’s $6.2 million this coming season into an additional $4.7 million in cap.
Then downside with Harrington gone is that rookie Keith Faried would be the lone power forward on the roster. The Nuggets can bank it for a later date or turn to free agency for a four.
The Suns have Vince Carter on the books for $18.3 million but he’s only guaranteed at $4 million, so he seems a lock to just be waived outright before the season.
Cleaning up the Josh Childress signing with the Amnesty could knock another $4.5 million off the cap to put the Suns about $13 million under.
The last time the Pistons were significantly under the cap they spent their money on Charlie Villanueva and Ben Gordon. Now they should consider using the Amnesty on either. Or Jason Maxiell. Or Rip Hamilton.
Hamilton has wanted out for some time but the Stretch Exception may make more sense if the team makes the bolder choice of dropping Gordon at $37.2 million over the next three years (or Villanueva at $24.2 million over the same).
Drop both Hamilton and Gordon and the Pistons may have in the neighborhood of $27 million in cap space. Nene would make a lot of sense for Detroit.
Oklahoma City Thunder
The Thunder will be under the cap this coming season so using the Amnesty on Nate Robinson might be worthwhile to add an additional $3.4 million in space ($11 million overall)
Long-term OK City is thinking about how to make the numbers work so they can pay Kevin Durant, Russell Westbrook, Serge Ibaka and James Harden beyond their rookie contracts (Durant is already there) so don’t necessarily expect the Thunder to use their cap space to significantly upgrade the roster.
The Magic are going to search for a way to keep Dwight Howard.
The starting point would be the Amnesty Clause on Gilbert Arenas and then the Stretch Exception on Hedo Turkoglu.
That would be about $21.3 million in savings in year one to bring the team’s cap number to about $55 million instead of tax-worthy $76 million.
The Magic can keep going if they use the Stretch on Chris Duhon. The Magic also have trade assets in Jameer Nelson, J.J. Redick, Brandon Bass and Ryan Anderson.
Howard has said he’d like to stay but wants to be on a team that can win a title. The Amnesty and Stretch provisions may give Orlando a chance.
Portland Trail Blazers
The Blazers are faced with one of the more difficult decisions. Sentimentally, Brandon Roy would be a difficult cut but he’s gone from the face of the franchise to a player whose chronically injured knees have reduced him to a bench player.
Perhaps he can return to a higher level of play; maybe he’s damaged goods at $69 million over the next four years.
The Blazers might bring back another oft-injured player in Greg Oden which would keep the Blazers well within luxury tax range.
Using the Amnesty on Roy would change the economics significantly, taking $11.3 million off the first year and $51.5 million over the four-year life of his contract.
If the Blazers don’t have the stomach to cut Roy, Amnesty on Marcus Camby’s final year would trim $9.6 million off the books to at least help keep Portland under the tax.
Los Angeles Lakers
Luke Walton no longer has a role on the team and can be used to trim about $4.3 million off the team’s salary for the next two seasons.
Given that LA will be in the higher tax bracket, that might be a savings of $8.6 to even $12.9 million a year.
A bolder move might be dropping Metta World Peace for a larger savings over three seasons. Walton could then be dropped via the Stretch Exception.
Expect Walton to go regardless but if Peace is the cut, it would mean LA is looking to seriously tighten the belt under what looks to be a frighteningly punitive tax system for the high-spending teams.
Tax may be an issue for Boston if they use their Mid-Level Exception and/or re-sign restricted free agent Jeff Green. Jermaine O’Neal may be a necessary tax cut from $6.2 million to $1.6 million.
If the Mavericks fully intend to re-sign Tyson Chandler, J.J. Barea and Caron Butler, then they need to seriously consider using the Amnesty on Brendan Haywood.
Although $8.7 million per year is reasonable for a center (over four seasons, Haywood’s fifth and final year isn’t guaranteed), the Mavericks could otherwise be looking at a sizable tax bill.
San Antonio Spurs
Dropping Richard Jefferson via the Amnesty would help the Spurs get out of the tax in year one and trim an additional $16 million over the following two years.
The Hawks will probably drop the overpaid Marvin Williams, who is set to make just under $25 million over the next three years. The cap hit would drop from an average of $8.3 million to $2.1 million.
Atlanta would have about $12 million to spend under the tax, possibly to retain free agent guard Jamal Crawford and to add a small forward to replace Williams.
Now if the team went for the bolder move of dropping Joe Johnson (and use the Stretch Exception on Williams), suddenly the team has $48.5 million in salary and about $12 million in cap space.
But what’s the point? They’re still on hook to Johnson for that $107 million. It would make a lot more sense to try and trade him (to a team like the Clippers).
New Orleans Hornets
The Hornets will be under the cap if David West and Carl Landry leave as free agents. Neither Emeka Okafor nor Trevor Ariza seems like viable Amnesty cuts unless the team intends to completely rebuild.
If so, Okafor would add about $10 million in cap space over the next three years.
The Bucks dealt for Stephen Jackson but if they wanted to instead go for cap space, Amnesty would do the trick, adding $6.9 and $7.5 million over the next two years. The team would then have roughly $14.5 million to spend.
Another possibility would be Drew Gooden who is set to make $26.3 million over the next four years but if the team wanted to drop Gooden, his contract would be better suited for the Stretch Exception.
Drop both and the team could get in the neighborhood of $18 million under the cap but there’s a very solid chance the Bucks opt to keep their Amnesty for later date.
New York Knicks
The Knicks are looking to maximize cap room in 2012. There’s about a $250k gain in space if they use the Amnesty on Renaldo Balkman instead of the Stretch Exception and that little bit may be worthwhile.
The Sixers have to decide on restricted free agents Thaddeus Young and Spencer Hawes.
Philadelphia isn’t likely to go for cap space so Amnesty would be about avoiding tax. Andres Nocioni would get the job done.
Alternatively if the team goes in a different direction entirely, letting Young and Hawes go, they can in turn Amnesty Elton Brand to get significantly under the cap (about $17 million) but that seems the unlikely path.
Save It for a Rainy Day
The Bulls made a huge leap this past season led by NBA MVP Derrick Rose. Carlos Boozer didn’t quite live up to expectations but he’s still worth keeping if Amnesty means Chicago still has to pay him $60.6 million over the next four years not to play.
Chicago’s not going to get far enough under the cap via Amnesty and there’s no real point in using it on someone like C.J. Watson ($3.4 million for a $2.6 million cap deduction). The Bulls aren’t close to the tax, so they don’t gain any significant cap space and would still have to pay Watson the same salary regardless.
The HEAT may come close to the tax if they use their Mid-Level Exception. Mike Miller should be the cut if necessary but there’s no reason for Miami to waive him unless the tax does become an issue.
The Grizzlies may also near the tax this season if they re-sign restricted free agent Marc Gasol (as they intend to) but are otherwise in the no-man’s land where the Amnesty may not help economically.
The Wolves are under the cap and could Amnesty Brad Miller to gain $3.6 million in space but given Miller has just $848k guaranteed in 2012, the Stretch Exception would make more sense. The same can be said of Martell Webster.
Other possibilities would be Anthony Tolliver, Nikola Pekovic or even Luke Ridnour . . . but only if maximizing cap space became a priority. Holding may make the most sense for the Wolves.