NBA Salary Cap Chat With Larry Coon 2/22/12

Larry Coon the noted author of the CBAFAQ, will answer your Salary Cap and Collective Bargaining Agreement questions. Larry will answers your questions about the Salary Cap, NBA trades and the new CBA at 3:00pm

  1. Jay Picolo

    Do you see the Hornets trying to move other players besides Kaman at the deadline, and do you see them actually getting a 1st round pick for him.

    • Larry Coon

      Ever since they nixed the deal with the Lakers, the goal of the Hornets has been to minimize the salary obligations in preparation for the sale of the team, and to load up on young players & picks. Kaman clearly isn’t a part of their long-term plans, and they’d be all for flipping him for more young players and draft assets. But remember, they already tried to trade him and didn’t find any takers, so no one out there was willing to meet their asking price.

      I think he can still contribute, so I think there will be a market for him closer to the trade deadline.

  2. Leon

    Larry, if a team is under the cap, do they have to come within 25% of an incoming contract, if the incoming contract puts that team over the cap?

    • Larry Coon

      For determining whether salary matching is necessary, they use the team salary AFTER the trade is completed. So if a team starts & ends under the cap, they don’t have to match salaries at all. But if the start under the cap and end over the cap, they can’t go over the salary matching limit.

      But it’s no longer a 25% limit for teams that aren’t taxpayers. It’s (and here’s where it gets messy):

      The GREATER of: (the LESSER of 100% + $5 million, or $150% + $100,000) or 125% plus $100,000.

      In other words, there are now effectively two “switchover” points — one at $9.8 million, and the other at $19.6 million.

      * If the team is trading away $0 to $9.8 million, then they can take back 150% plus $100,000.

      * If the team is trading away $9.8 million to $19.6 million, then they can take back 100% plus $5 million.

      * If the team is trading away more than $19.6 million, then they can take back 125% plus $100,000.

      BUT if the team ends up over the tax line after the trade, they can take back 125% plus $100,000 no matter how much salary they are sending out.

      Perfectly clear, right? :-)

      (No word from the league yet as to whether they did this specifically to make it harder for me to explain.)

  3. Jayson

    Is there a limit to the amount that teams can spend on the luxury tax? Does the luxury tax escalate (i.e. beyond the eventual 2:1, at a certain point does it go 3:1)?

    • Larry Coon

      I guess there’s a theoretical limit if you consider 15 players on max contracts. But not even then, because a team could waive a bunch of guys who are on max contracts. So no, there’s really no limit.

      The Luxury tax stays $1 for $1 for two years, then it starts to be progressive. For every $5 million over the tax line, the tax rate goes up. Starting in 2014-15 there is a further penalty if the team is a “repeat offender,” paying tax in three of the four previous seasons. The basic rates will be (for a given amount over the tax line):

      $0 to $5M = $1.50
      $5M to $10M = $1.75
      $10M to $15M = $2.50
      $15M to $20M = $3.25 — and increasing by 50 cents for every additional $5M.

      For the repeater rate, add $1 to each of those tax rates.

      So, for example, a team with a payroll $12 million over the tax line in 2013-14 pays a tax of $21.25 million — the incremental maximum of $7.5 million for their first $5 million over the tax line, plus the incremental maximum of $8.75 million for their next $5 million over the line, plus $5 million for their last $2 million over the tax line.

  4. Jesse

    UC students for life!

    Two things: one, is a Bynum/DH12 possible if the Lakers took on Hedo’s contract and threw in a defensive player on a cheap contract, like Barnes? Two, Think a blake/gasol for hinrich/smith trade realistic? I think the Hawks are clamoring to play horford at his natural position and to get rid of hinrich.

    Wouldn’t these two trades solve ALL of the lakers problems? Defense at the PG, outside shooting, athleticism, etc?

    • Larry Coon

      I think Orlando is going to try to move Hedo in any deal for Dwight. And while everyone assumes that the Magic naturally would be interested in Bynum as a replacement for Howard, from what I’ve heard about the Magic’s thinking on the matter, that just isn’t the case.

      I really liked the idea of Hinrich on the Lakers a couple years ago. Now, I have to worry about what he’s got left.

  5. Kevin

    The Mavs have to move Marion for Dwight, but do they have to do so before the deadline or can they make a run with him and trade him in the offseason?

    • Larry Coon

      He can be traded after the season or in the offseason. But if Dwight & Deron are ready to sign and Dallas isn’t able to unload Marion in the offseason, they’re going to be kicking themselves.

  6. Shahin O.

    Hey Larry,

    Derrick Rose said he would love to play with Pau Gasol, Kobe wants the Lakers to just make a decision on Pau, the Lakers want to get Dwight Howard and a solid SF/outside scorer, and the Magic want more for Dwight than just Bynum… so how about this?

    LAKERS GET:
    * Dwight Howard, C (fr. Magic)
    * Luol Deng, SF (fr. Bulls)

    BULLS GET:
    * Pau Gasol, PF (fr. Lakers)
    * Hedo Turkoglu, SF (fr. Magic)

    MAGIC GET:
    * Andrew Bynum, C (fr. Lakers)
    * Carlos Boozer, PF (fr. Bulls)

    I know the Lakers NEED a PG (maybe sign Arenas and/or lean on Blake/Goudelock/Morris but who says no here?

    http://games.espn.go.com/nba/tradeMachine?tradeId=7qvrbly

    • Larry Coon

      It’s a better deal for the Lakers than Pau & Bynum for just Howard, but they trade away both their big assets without acquiring a (desperately needed) point guard.

      But I think the main impediment is the Magic. For whatever reason, they’re not so high on the idea or Bynum OR sending Dwight to LA. And I think they definitely want no part of Boozer’s contract.

  7. David

    Larry, assuming that the Lakers will absolutely not trade both Pau and Bynum for Howard, doesn’t the previously-offered package from the Rockets of Kevin Martin, Luis Scola and Goran Dragic make the most sense for the Lakers? Scola would mitigate the loss of Pau at PF. Dragic would give them an upgrade (and youth) at the PG spot. And Martin could either (a) start with Kobe on the wings, (b) come off the bench as a Sixth Man Extraordinaire or (c) be packaged with Bynum for Howard (should work under cap rules as two trades: 1. Bynum-for-Howard, 2. Martin-for-Turkoglu). I know the Lakers would prefer Lowry from Houston, but that’s NOT happening. So, then, why WOULDN’T this move make total sense?

    • Larry Coon

      Yeah, it’s an interesting dilemma for the Lakers. John Hollinger hit on this in his Per Diem today as well.

      I liken it to Maslow’s hierarchy of needs (what can I say, I’m a science nerd…). You can’t be worried about high-level needs like self-actualization when your more basic needs (like food & shelter) aren’t met. The Lakers have more high-level players (Kobe, Pau, Bynum) than do most teams, but they have gaping holes at the other two starting positions — their basic needs (of putting at least a competent player at all five positions) aren’t met.

      Easy enough to say they should fill those holes (along with adding bench depth), but how do they do that? The answer is to trade one of their high-level players for multiple competent ones, and Pau is the obvious choice to move. A trade moving Pau for a reasonable one, three and four would shore up their weaknesses and make them a much better team.

      I think there’s a number of Houston scenarios that could work. I don’t know that Kevin Martin is a great fit — he’d be mostly redundant behind Kobe — but there are various combinations that could help both teams. And I agree — if Houston was willing to put Lowry in the deal, it’d already be done.

  8. Alex

    I know the Raptors are trying to avoid long term salary, but does a Barbosa for Marion and Beaubois trade make sense for both teams?

    Dallas gets rid of Marion’s contract to free up cap space for DWill-D12 and Toronto gets some value and nice young prospect for Barbosa who will likely leave at the end of the season.

    Biggest issue is Toronto’s willingness to take on Marion’s contract. Maybe there is a buy-out they can agree on this summer or maybe Toronto is semi-competitive next year with Marion, a healthy Bargnani, Valanciunas and a top-5 draft pick.

    • Larry Coon

      Yeah, I think you hit on the problem yourself, and spent your last paragraph trying to talk your way into it. I don’t think the Raps take on Marion’s contract.

  9. Rob Crowley

    Is there a place to review the NBA Bylaws and Constitution?

    • Larry Coon

      Yeah, but first you have to get a job with a team or the league office. The CBA is publicly available, but those two documents are off limits. I haven’t seen either one, and (interestingly) the players association hasn’t seen them either.

  10. John Tambwe

    I have not heard anything or much about the Lakers pursuing Deron Williams. Is it because they will have to give up a lot to acquire him? Or the Nets are just clinging on Williams hoping that they can ship Lopez and a few other players plus draft picks to get DH12 and make things work. Because honestly, I think the Lakers need Deron Williams more than they need Howard.

    • Larry Coon

      I think the Nets are all-in with Deron. Either they keep him and land Dwight or other players to pair with him, or they lose him and start the rebuilding process this summer. I don’t think they’re going to trade him.

  11. kevin

    Larry,
    Given that D-How has no interest in possibly signing with the 76ers this summer.. are there going to be any other impact FA’s out there for the team to pursue this summer, after they amnesty Elton Brand?

    • Larry Coon

      Philly can have some serious cap room if they amnesty Elton. The biggest-name free agents will be Deron Williams, Steve Nash, Jason Terry, Eric Gordon (restricted), OJ Mayo (restricted), Ray Allen, Louis Williams (ETO), Gerald Wallace, and that Lin guy in New York that nobody’s heard of (restricted). There are probably a few others I forgot about.

  12. Floyd

    I have a few questions about the trade exception, specifically the Lakers $8.9 million. If the Lakers make a trade for someone under this amount, do they still have the residual to use at a later time? Can they use the whole amount on multiple players from the same team? Can you give us a list of players that make something close to the exception that you see as potential trades? Thanks a lot.

    • Larry Coon

      The Lakers have one year from the date of the Odom trade to replace his salary. They can do it all at once by acquiring a player making $8.9 million, or they can trade for a $5 million player today and a $3.9 million player in the offseason. It’s like a gift card with a one-year expiration date. The amount you spend comes off the total, but you can spend the rest later.

      There are a lot of players who have been talked about, but a couple are:

      Kirk Hinrich ($8 million)
      Ramon Sessions ($4.3 million)
      Shawn Marion ($8 million — haven’t heard this one for real, but if Dallas wanted to unload him to clear cap room….)
      Michael Beasley ($6.3 million)

  13. Craig

    I’ve heard Steph Curry’s name brought up in rumors involving Gasol. What is GSW’s motivation for trading such a skilled young PG with a team-friendly contract? Injury history? I assume Biedrins ($9 mill) and/or Kwame Brown ($7 mill) would need to be sent back to LA to make salary work. Do you suppose GSW would move Pau back to center?

    • Larry Coon

      I haven’t heard anything about that, and while Pau would make some sense for Golden State, I don’t think they want to move Curry to get him. Of their backcourt tandem, Monta Ellis has always been viewed as the one who would get moved.

  14. Dan

    In gilbert arenas interview he said he can sign with orl next year if he sits out this year. Is that true?

    • Larry Coon

      He was amnestied by the Magic, so he can’t re-sign until the expiration of his amnestied contract, which will be this summer.

      (Note: I originally wrote that they can re-sign him right away, forgetting that they had used their Amnesty provision on Arenas. I apologize for the error.)

  15. Moose Barker

    The Nets traded their first round pick last year in the D-Will trade, but did have a first rounder from a separate trade (MarShon Brooks). Can they still trade their 2012 first rounder in a Dwight Howard trade, despite the rule that consecutive 1st rounders can’t be traded?

    • Larry Coon

      This is one of the most misunderstood rules in the NBA. Teams can’t trade consecutive FUTURE picks. The 2011 draft is in the past, so it has no bearing on whether they can trade their 2012 pick.