NBA Salary Cap Chat With Larry Coon 2/23/13

1. Deven

   Do you think the harsher luxury tax that kicks in the next season scared off many teams at the trade deadline?

   • Larry Coon

     It might have had some effect, but I think this summer is when we’ll really start seeing movement that reflects the progressive luxury tax.

2. Deven

   Why is Danny Ainge always reluctant to make a big move? To me, he’s hurting this team in the long-run rather than in the short-run. He could have traded Pierce and KG to get younger assets and they can start building for the future. What’s your take?

   • Larry Coon

     I think the Celtics were in an odd situation — they either had to make a big deal, unloading Pierce AND Garnett, and probably other pieces, or they had to make a big acquisition to keep the team competitive. A smaller deal — like unloading only Pierce or Garnett, or making a small acquisition — really wasn’t an option. Plus he had KG’s no-trade clause to deal with.

     Big deals are hard to complete, especially in February when the season is in progress, roster size limits are in place and there’s a hard deadline. It wouldn’t be unreasonable if it turned out that Ainge tried but ultimately couldn’t pull off a blockbuster.

3. Deven

   Why is Josh Smith still in Atlanta?

   • Larry Coon

     Because he still plays for the Hawks?

     Okay, seriously — you could justify his holding onto Smith in a couple ways, but mostly those would be post-hoc rationalizations — twisting the evidence to support your conclusions rather than the other way around. The real answer could simply be that Danny Ferry worked hard on a deal, and even got close with the Bucks, but in the end decided that the null hypothesis (not doing anything) was better for him than pulling the trigger on a sub-optimal deal.

     How could something like this happen? Other GMs know when teams HAVE to move a player, and scale back their offers accordingly. Ferry just might not have gotten a satisfactory offer, and would rather risk Smith’s free agency this summer than accept a deal he didn’t like.

4. Deven

   Does this boring trade deadline lead up to exciting offseason?

   • Larry Coon

     I think this offseason will be interesting, but I think it’s unrelated to the lack of excitement at the trade deadline. Also keep in mind there were big deals, but the teams got them done early — the Rudy Gay trade, and before that, the James Harden trade. Much smarter to get a deal done BEFORE you’re under the gun.

5. Deven

   With the Rockets getting Thomas Robinson, is that the steal of the trade deadline?

   • Larry Coon

     I think so. Robinson was the number five pick in the draft just last summer.

     What do you think the Kings could have gotten for the number five pick had they dangled it in front of other teams BEFORE the draft? Did they get anything comparable to that? Did half a rookie season make THAT much of a difference?

     I think the move was incomprehensible from a basketball standpoint. However, the cynic might note that the cash-strapped ownership just netted a couple million dollars cash right before they sell the team. It’s kinda like pulling the high-end stereo out of your car right before you sell it, and replacing it with beat-up cassette player.

6. Mike James

   Can the Lakers amnesty Kobe after this season and then sign him to another 1-2 year contract to cut costs?

   • Larry Coon

     The technical answer to your question is no. If a team amnesties a player, they can’t re-sign or re-acquire him for the duration of the terminated contract.

     The practical answer to your question is that — despite what Mark Cuban thinks — the only way the Lakers would even remotely consider using amnesty on Kobe Bryant is if he were to blow out a knee or something and his career is finished.

7. sam

   hi larry
   when it comes to the new cba you are the only one i trust to be correct every time. your knowledge of the agreement is off the charts. my question is the rockets sign lin and asik to rear end heavy deal, but they count against the cap as 8 mil per. if the rockets trade either of those players will the new team’s cap hit be 8 mil per or 5,5,15 thanks

   • Larry Coon

     In the case of contracts signed using the Arenas provision (Lin, Omer Asik and Landry Fields) the salary in the first two seasons is kept in check, and the player can receive a substantial raise beginning with the third season of the contract. In order to offer the substantial raise, the team must have as much cap room as they would have needed to have without the Arenas provision being in effect. In other words, the Rockets couldn’t offer Lin a substantial raise unless they had a substantial amount of cap room last summer, even though only $5 million went to Lin in the first season.

     The NBA accounts for this discrepancy by charging the average salary in the entire contract against the cap in each season of the contract. So while Lin’s actual salary is $5 million, $5 million and $15 million, the cap hit for the Rockets is $8.3 million in all three seasons. This keeps the Rockets from double-dipping — they can’t “use” the fact that they were well below the cap to sign Lin, and do the same thing with Asik. They had to have enough cap room to have signed both without the Arenas provision.

     Now to your question — if such a player is traded, the new team inherits the same cap hit. If Lin had been traded at the trade deadline, his trade value would have been $8.3 million, and his cap hit for the new team would have been the same $8.3 million for three seasons.

     Had the Knicks matched Lin’s offer sheet and kept him, his actual salary would have counted against their cap — $5 million, $5 million and $15 million. This is because the Knicks didn’t need to have a substantial amount of cap room above the mid-level exception in order to offer Lin a contract, so the NBA didn’t need to account for it by reserving more of their cap room.

     Had the Knicks retained Lin and later traded him, his trade value would have been $5 million this season, and his new team’s cap amounts would have been the same $5 million, $5 million and $15 million.

     The rule of thumb here is that for Arenas contracts, the new team always inherits the same cap amounts the trading team had.

8. Ken Virzi

   So if the FA can sign a 5 year deal and make more money but if another tem wants him what would he lose if they offer a 1 year deal followed by a max the next year?

   • Larry Coon

     There are two problems with your line of thinking. The first is that years equals financial security. If a player signs a one-year deal and gets hurt, that may the only money he makes the rest of his career. By signing a longer deal the player locks-in a lot more money in case the worst happens.

     The second problem is that Bird rights take three years to ramp up. I assume you are thinking that a capped-out team (if it has cap room, then why sign just a one-year deal?) signs the player to a low-value contract (perhaps with the Mid-Level exception), plays the season, and then signs a max deal. But this is exactly the reason Bird rights take three years — after one year the player could only receive a 20% raise over what he make the year before.

     So even if a player was willing to take a one-year hit in order to play where he wanted, three years is usually asking too much.

9. Dorian

   Does the cba or nbpa allow players to restructure their contracts at all? Ex: if a player wants to take less money to free up more for the franchise.

   • Larry Coon

     Players and teams can sometimes restructure contracts upward. They are not allowed to restructure contacts to reduce salary.

10. Mike Larry

    Is it possible for the Lakers to reduce Kobe’s salary next season? Maybe by amnestying him this off-season and then signing him to another deal?

    • Larry Coon

      Short answer: no.

11. david

    Do you see Matta being amnesty during the summer? His defense is incredible i dont see the Lakers being able to replace his defensive mindset

    • Larry Coon

      I think he gets amnestied, yes. If the Lakers re-sign Dwight and keep a payroll that is $30 million over the tax line their tax bill will be about $85 million. If they waive Metta their tax bill drops to $42.725 million — in other words, it gets cut in half.

12. Michael

    What teams are heading towards a world of hurt due to the repeater tax and what is a hypothetical situation one of these teams will have to deal with?

    • Larry Coon

      To be clear, it’s not the repeater tax that’s the issue right now, it’s the progressive tax, which starts at $1.50 per dollar and increases for each $5 million the team is over the tax line.

      Just to give you one example, look at the Lakers. If they retain Dwight Howard they will have a $100 million payroll once again. This season being $30 million over the tax line means a $30 million tax bill. next season the same $30 million over the tax line will mean a $85 million bill. That’s a LOT of money to pay, even for a team like the Lakers (who also have to deal with inheritance and estate issues right now).

13. allan

    With the jj redick trade, are the magic in any position to sign a free agent for more than the mid level or is everything going to happen summer of 14?

    • Larry Coon

      Right now Orlando is committed to about $53.6 million for next season, although a chunk of that is non-guaranteed. They can do some shopping, but likely would need to clear additional salary to offer someone a max deal.

14. Gediminas

    Hey Larry,

    what do you think are Lakers management options if Dwight surprisingly decides to bail the team and sign with another team this summer?

    How do they remain competetive?

    • Larry Coon

      If he bails they put Pau at center, augment the roster the best they can with limited resources (perhaps facilitating a Howard sign-and-trade to bring back a PF and some scoring punch), and limp through to 2014 when the books are mostly cleared and they can go shopping.

15. Ken Virzi

    Was there ever consideration with new CBA talks to grandfather the contracts. For example Kobe’s contract was signed under the old CBA so there should have been some consideration for the huge contracts until they expire. I feel the new CBA was very anti Lakers and maybe a few others like Dallas

    • Larry Coon

      This was a discussion that occurred in 2005 when they first put in the Luxury tax. The Lakers wanted existing contacts to be grandfathered in, because they had huge deals in place for Shaq and Kobe which were signed under the old agreement, before the luxury tax was even a consideration. They were voted down by other owners. Reportedly the conversation went, “If Shaq is too expensive for you, we’ll take him off your hands!”

      Amnesty is the compromise that was reached. A team could adjust its team salary by waiving a player and having his salary excluded from the tax. This was repeated in 2011, when they changed both the tax and the cap rules (the cap is now based on 50 percent of revenues rather than 57), and amnesty gave both tax and cap relief.

16. Ruben

    If Dwight Howard decides to leave the Lakers, where would the Lakers turn to next? would they have enough cap room to sign a significant FA such as A.I.if he leaves Denver or would they have to make a trade?

    • Larry Coon

      No, the Lakers won’t have ANY cap room if Howard leaves. I think they’re pretty confident he will re-sign, or — to use a Jerry Buss poker analogy — they have a good had but not necessarily the nut, and they’re pushing all in.

      Plan B would be to use a sign-and-trade to try to get something for him, I guess. Brooklyn won’t really be an option, however, for reasons I outlined in my blog.

17. josh

    Larry, can a GM talk to an agent about signing that agent’s player and in the process of selling the agent and player on the team mention that they (the GM) are going to try to trade for a superstar player under contract with another team without it being tampering? What are the tampering rules regarding GMs talking to agents about players in the Agent’s stable that are under contract elsewhere?

    • Larry Coon

      They can’t hold conversations with anyone regarding a future contract or acquisition. Any expression of interest in obtaining the services of a player who is under contract with another team is prohibited. This specifically extends to a team employee expressing interest in acquiring another team’s player by trade, whether it be to the public or to an agent.