Salary Cap Chat With Larry Coon 12/07/11

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 ongoing CBA talks at 3:00pm

  1. Marcus

    It seems like the new CBA made signing an extension a bad idea for guys like Deron Williams, CP3 and Dwight Howard. Would it not have made more sense to make it so teams could offer significantly more money in an extension that to a free agent (even their own free agents)?

    • Larry Coon

      You’re right — in a free agent signing players with Bird rights can get five years and 7.5% raises, and in an extension they can get four TOTAL years with 7.5% raises. The total years in an extension includes any remaining years on the player’s current contract. So if you’re Chris Paul, you’re looking at signing through 2014-15 with an extension, or opting out in 2012 and re-signing through 2016-17. I think they should have given players more incentive to extend with their current teams (while still disincentivising extend-and-trade transactions).

      Now if you’re a team looking to trade for Paul, Dwight Howard or Deron Williams, you pretty much have to make a leap of faith that they will re-sign with you next summer. This will probably lower the trade value of Paul (at least), because a team like the Clippers won’t be included to offer as big a package for what may turn out to be a one-year rental.

  2. Marcus

    Hypothetical Question: Carmelo wasn’t traded to the Knicks last season. All other things being equal, how much money could the Knicks offer him as a free agent this year? (Now that we know the CBA details)

    • Larry Coon

      This is rough (just scratched-out), but I think it’d be about $8.6 million.

  3. Chicago Charles

    How much available cap space does Chicago have–and other teams? Can any team exceed the cap with a player from a new trade?

    • Larry Coon

      Chicago doesn’t have any cap space — they’re about $7 million over the cap. And other teams? I’m not answering for all 30 teams in a chat — sorry.

      Teams can go above the cap as the result of a trade, but there are limits. Taxpaying teams can acquire 25% more salary than they trade away. Teams that aren’t taxpayers can acquire either $5 million more or 50% more.

  4. Carl Brown

    Do the Detroit Pistons have enough CAP space for a significant FA signing?

    • Larry Coon

      Their payroll adds up to about $48 million, so not counting cap holds, they have about $10 million in cap room. If they amnesty Rip Hamilton they’ll have a lot of room.

  5. a different matt

    If a player gets an extension or new contract with his current team, can that team amnesty that player down the road? For example, if Dallas were to resign Chandler (however unlikely), could they use their amnesty on him later?

    • Larry Coon

      No, amnesty is only for players who are already under contract, and only for players who don’t change teams once business opens. Any amnestied player has to be on that team’s roster at the end of the 2010-11 season, with no trades or gaps in the interim.

  6. Matty

    Why do teams under the cap get a Room Exception? Aren’t exceptions for teams over the cap? I’m not sure I understand the concept of an exception for below cap teams – they are under the cap and don’t need an exception. What am I missing?

    • Larry Coon

      Exceptions aren’t just for teams under the cap, although that’s true for the most part. They also go to teams just a little bit under the cap. Let’s say a team has a payroll of $57 million, with a salary cap of $58 million. If they lose their exceptions just for being under the cap, then by virtue of being $1 million under, the team would lose its ability to use the $5 million mid-level exception.

      So what they do is add the values of a team’s exceptions (including any trade exceptions and cap holds) to their payroll, and if the sum is over the cap, then they keep their exceptions. In the above example, the team has a $57 million payroll and a $5 million mid-level, adding up to $62 million, so they’re okay — they keep their mid-level. But let’s say they make a trade where they drop $6 million in salary. Now their payroll is $51 million, so the sum of their payroll and exceptions is $56 million — which is below the cap. Their exceptions vanish, and they just have cap room left.

      The new, $2.5 million exception is for teams in this situation. If a team is below the cap, but just a little bit, then this gives them a little extra spending room. If they ever drop below the cap so the sum of their payroll, cap holds and exceptions (including this $2.5 million exception) are less than the cap, then they lose this exception.

      This exception was designed for teams like Miami last year, which gutted their roster to create cap room to sign free agents. Once they sign those free agents, this exception gives them the ability to bring in another player at a salary above the minimum.

  7. James

    Can the Lakers combine their trade exception left over from last year’s Sasha V. trade with another exception, such as the “mini” MLE to acquire a higher salaried player?

    • Larry Coon

      Nope. Exceptions can’t be combined like that. The Lakers will be able to use the Vujacic exception on or before December 15 to acquire a player or players making a combined $5,475,113 or less, without needing to send out corresponding salaries to match.

  8. Shawn

    Does using the amnesty clause on a player make that players full contract amount available to sign free agents? For example would using amnesty on Gilbert Arenas give the Magic enough room to sign a max level contract? Say…Chris Paul or Deron Williams?

    • Larry Coon

      No, it wouldn’t. Amnesty DOES take the player off the team’s cap. But if a team is, say, $20 million over the cap and amnesties a $10 million player, they’d end up $10 million over the cap.

  9. Edreese

    Which salaries would be required to make a CP3/Curry type deal?

    • Larry Coon

      From a straight salary standpoint, CP3 makes $16,359,805, and Curry makes $3,117,120 — so GS has to add a lot more to make it work. I doubt Dell Demps would be very interested in David Lee or Andris Biedrins, so that means they’d need to include either Monta Ellis or a combination of lower-salaried players. (They could also find a three-way deal where another team would want Lee.)

      Since the Warriors are under the tax level, they can take advantage of the new, relaxed 150% trade rule (presumably, but there’s a detail in the settlement that makes me think this might not be available to them). If they can acquire 150% (plus $100K) of what they send out, then they’d have to send Curry and another $7.73 million. That’s Charlie Bell and Dorell Wright, or another similar combination.

  10. Britt

    When a team uses their amnesty on a player, what is the waiver bidding process? Does the old team get the salary relief that the new team bids, or is the player getting old contract + new contract?

    • Larry Coon

      There’s no new contract. This works by waiver claim, so the old contract is still valid, the player doesn’t become a free agent, and he doesn’t get any extra salary. They’re just changing the waiver rule so that instead of acquiring the players’ entire salary, they acquire the portion they bid for, with the player’s original team responsible for the rest.

  11. Peterson

    Dear Larry,

    What are the possobility of a Dwight Howard to Chicago Bulls megadeal? What should the Bulls give up to keep Orlando satisfied (like eating Turkoglu’s contract). Let’s say they did it, what would be the chance to sign Jason Richardson to MLE?

    • Larry Coon

      I’m hearing rumblings about the Bulls being suitors in the Howard sweepstakes. If they got him, it’d probably be something like Boozer, Asik, Deng & Gibson for Howard & Turkoglu.

  12. Axel

    it appears that the most viable moves and starting 5 the Lakers can set up is:

    Tyson Chandler + CP3 + PAU + Artest + Kobe.

    Or

    Dwight Howard + JJ Barea + Artest + Pau + Kobe.

    Either way, we could spend MLE on Free agents JJ or Tyson and fill the voids at PG or C with any potential blockbuster trade.

    • Larry Coon

      You think Tyson Chandler is going to sign for the Lakers’ $3 million mid level? Barea won’t even sign for that amount.

  13. BigTyme

    Can a amnestied player veto a team dat wins a bid?

    • Larry Coon

      No.

      I was a little curious about one thing — this wouldn’t be pertinent this year, but it might be so two years from now. Let’s say the Lakers hold on to their amnesty for two years (until the big luxury tax kicks in), and let’s say Kobe has a steep decline, and the Lakers decide it’s not worth paying him $30 million in salary and other 300 kajillion in luxury tax. (Yes, “kajillion” is now an official word when applied to the new luxury tax.)

      So the Lakers amnesty Kobe — can another team make a secondary waiver claim on him?

      Here’s why I thought the answer might be no — a waiver claim is considered a change of teams by ASSIGNMENT (like a trade). Kobe has a no-trade clause, and a trade is another form of assignment. So Kobe’s no-trade clause wouldn’t prevent his being amnestied, but it might prevent another team from claiming him.

      But I asked the league about that, and was told a no-trade clause wouldn’t affect a waiver claim. It’s details like this that are driving the lawyers nuts right now as they rush to finalize a new CBA.

  14. Tim

    Could this happen?

    Nets sign Chandler, which makes CP3 happy.

    3 Team trade between Nets, NOH and Magic. Magic get D-Will (he wants to play with D12), Nets get CP3, NOH get players and picks (i.e. Lopez, Anderson, J-Richardson.

    Any possibility the 3 Teams do something similar to that? (I know salaries need to match)

    • Larry Coon

      In theory something like that could work, but there are a lot of moving parts to your scenario.

  15. Larry Hughes

    Do you believe the Bulls w/ C Butler or Jason Richardson can beat a healthy Miami team w/ Dalembert in a 7 game series?

    • Larry Coon

      It’d be a series I’d enjoy watching, that’s for sure.

  16. andy

    Next year, how much does Eric Gordon count against the cap if the Clips wanted to sign D-12 or CP3? Can the clips sign a max free agent before extending Gordon (thus taking them over the cap) with Gordon’s contract only counting as his qualifying offer of 5.1M, and then signing Gordon for closer to his value?

    • Larry Coon

      Gordon’s hold will be $5.1M, but the Clippers hope to lock him up to an extension before then.

  17. Manish

    How long do you think majority of NBA team and fan will be fine with being nothing more then training ground for superstar player….do these player know that this will eventually kill NBA

    • Larry Coon

      There’s a balance here, between teams’ (and their fans’) interests in retaining players, and the players’ freedom of movement. I think the current rule changes will help in the long run, but of course it’s hard to convince someone in New Orleans of that right now.

  18. zowie

    If the Heat want to sign Dalembert, but he’s worth more than the MLE, can they entice him with a big contribution to his Haiti charity, or would that be circumvention of the rules?

    • Larry Coon

      The league would nix something like that as circumvention.

  19. jamal

    what center do you see the heat getting ?

    • Larry Coon

      I don’t think they can afford any of the guys they really want. I see them swinging a trade for someone, or picking up someone who’s cut from another team.

  20. alex

    will the amnesty take the salary off the books as well or only for tax purposes.

    • Larry Coon

      Both salary cap and tax — but the team still has to pay the player.