Salary Cap Chat With Larry Coon 12/28/11

1. Chris

   Hey Larry, are sign and trades limited to 4.5% raises or do they enable full 7.5% raises this coming offseason?

   • Larry Coon

     Down to 4.5 percent.

2. Alex

   What would you think of Indiana moving Danny Granger for a big like Al Jefferson from Utah?

   • Larry Coon

     I think Granger is worth a lot more than that, I was at Staples Center last night for the Jazz season opener against the Lakers. Jefferson was 2-16 with 10 rebounds, and didn’t do anything to impress me the entire night. Granted, this is a one-game sample, but his entire career is made up of such one-game samples.

3. Sam

   Maximum contracts were calculated based on a modified 48.04% cap last season. Does the new agreement keep the 48.04/51 ratio and apply it to the lower cap?

   • Larry Coon

     With this CBA they base it on 42.14 percent of projected BRI (down from 48.04 percent).

4. Rich

   How long does a guy sit on the waiver wire before just becoming an unrestricted free agent? Seemed like a long time between Lin being waived and the Knicks picking him up.

   • Larry Coon

     The current waiver period is 48 hours when a player is waived between August 15 and the end of the subsequent season, and seven days otherwise. This offseason the waiver period was always 48 hours.

     The Knicks didn’t claim Lin off waivers. He cleared waivers, and they signed him as a free agent.

5. David

   Larry, please explain to me what the benefit was to either Tyson Chandler or the New York Knicks by acquiring Chandler via sign-and-trade.

   The Ronnie Turiaf dump could have been accomplished as a two-team deal with WAS. Andy Rautin’s $600k contract was non-guaranteed. And, of course, there are no favorable years or annual raises by doing S&T anymore.

   Meanwhile, Dallas got a huge trade exception that it later used to acquire Lamar Odom. This seems highly unfair for the Mavericks to acquire such a trade asset when there really wasn’t much (if any) consideration for it.

   Please help me out here with an explanation. This has been driving me crazy for weeks!

   • Larry Coon

     I’d need to go back & look everything up — for instance, I think Rautins had some guaranteed salary. I just did quick look, and he is still on Dallas’ books with some salary, despite being waved prior to the season. I don’t know if that’s enough to throw off the deal if they didn’t do it the way they did it. There were also some draft right & pick trades involved, which were maybe enough to make them want to do a S&T. Or maybe New York & Chandler simply did Dallas a favor by doing it in such a way that they acquired a trade exception.

6. David

   What is the cap figure (next year and beyond) for an amnestied player claimed off waivers? Is it the BID amount or the PRIOR FULL SALARY amount?

   For instance, let’s say the Sacramento Kings wanted to trade Travis Outlaw next August. Is his cap figure in trades the $3M bid amount or his full $7M salary from his Nets contract?

   If it’s the former, it seems somewhat unfair for the Kings to get the benefit of using Outlaw’s contract for salary-matching due to his cap figure when they are only actually paying a fraction of that amount.

   Would the “next acquiring team” have to pay Outlaw’s full salary? Or just the same amount that Sacramento was paying?

   • Larry Coon

     Amnesty is another one of those things that’s subtly complicated. If a team is the winning bidder, then their bid amount is spread among the remaining years of the player’s contract, but the amount applied to each season depends on whether the player’s salary in that season is fully-guaranteed, partially-guaranteed, or non-guaranteed. I’ll skip the excruciating details, but the reason for this is because they didn’t want the player’s old team to have to pay more for an amnestied player than they would have had to pay had they simply waived him outright (without amnesty). Since teams don’t pay non-guaranteed salary for players they waive, the amnesty rules account for this by forcing the bidding team to pay all non-guaranteed salary.

     Outlaw didn’t have any of these quirks in his contract, however. The Kings bid $12 million for him, and their bid was spread evenly among the four years of his contract — $3 million per year. If he’s traded, then $3 million is the salary figure used, and his new team would be responsible for the same $3 million.

7. Jeff

   Jeff, can you elaborate on rookie scale rules for 2nd round picks? Is there a rookie scale? Can club pay player whatever he wants? What if player doesn’t accept salary? And after two years, 2nd round pick is restricted but can they get max salary?

   Seems like its for player to be a 2nd round pick, rather than late 1st round pick. You can make more money sooner. Strange.

   • Larry Coon

     Well, first of all I’m not Jeff. My name is Larry — nice to meet you.

     There is no rookie scale for second round picks. The team may pay the player any amount they wish, up to the maximum — assuming they have the cap room to give the player that much. While it’s true that a team can technically pay the player more as a second round pick than as a late first round pick, keep in mind that a player becomes a second round pick only when 30+ teams pass on him. Those typically aren’t the sorts of players who warrant a big salary as a rookie.

     If the player doesn’t accept his salary (and this applies to first round picks as well), they can either sit for a year and re-enter the draft, or they can play elsewhere (such as Europe) — but the drafting team still owns the player’s rights if he plays pro ball elsewhere.

     A second round pick IS restricted after two seasons, but the offer sheets for these free agents are complicated. It uses something called the “Gilbert Arenas Provision,” which I explain HERE. There are two reasons for the Arenas provision. One is exactly as you suspect — it prevents second round picks from cashing-in before first round picks can. The other reason is that it prevents teams from losing their players to offer sheets they can’t match, because they don’t yet have full Bird rights.

8. andy

   Have all the bird exceptions stayed the same in this CBA?

   • Larry Coon

     Pretty much the same — the one change they made works in the players’ advantage.

     Rookie scale contracts are for two seasons, with two additional seasons each with a team option. It used to be that if the team didn’t pick up their team option for the fourth year, they couldn’t use the Bird exception to give the player any more than he would have made had they picked up the option year. Likewise, if they didn’t pick up their team option for the third year, they couldn’t use Early Bird to give the player any more than he would have made had they picked up the option. Both these limitations were removed from the new CBA.

9. Jeff

   Read the league pays difference for veteran’s minimum salary over what 2nd year minimum salary makes. So for luxury tax purposes, which salary is included? Full amount or Amount – Reimbursed amount?

   • Larry Coon

     Right — the maximum salaries goes up by years of service, so a 10-year vet makes a lot more than a rookie, even though both are making the minimum salary. But they didn’t want there to be any reason for teams to shy away from older vets, so they made it so the team itself pays the same — they pay only the two-year veteran portion of the player’s salary, with the league picking up the rest, and they are taxed at the rate of a two-year veteran.

10. Chicago Charles

    If a player is designated as the franchise player like D. Rose–what advantages is that for his team? Financial, cap avantages? What?

    • Larry Coon

      A “Designated” player can get the max for a 7-9 year player (30 percent of the cap) after his fifth year. The team gets to lock him in sooner and longer. Remember, LeBron James & Chris Bosh all timed their first big extensions to make them free agents after seven years, so they could sign max deals at 30 percent of the cap. It didn’t go well for Cleveland or Toronto.

11. andy

    How much cap space does a vacant roster spot use up when determining how much a team can offer free agents? For example, Dallas next year with only 4 players signed, do any of the other 8 roster spots count against the cap?

    • Larry Coon

      Yes. The rookie minimum salary counts against the cap for every roster spot (fewer than 12) that is not accounted for by a contract, rights to a first round draft pick, or unrenounced free agent.

12. John

    If the Lakers are still talking with the Magic about a Howard trade, would there be any benefits for them to get a 3rd team involved and take on some expiring contracts so they could try and get D. Williams when he hits free agency? This is assuming they deal both Bynum and Gasol…

    • Larry Coon

      There’s almost no conceivable way the Lakers could have enough cap room to go after Deron Williams if they have Kobe Bryant and Dwight Howard on their roster.

13. Kevin S.

    True or False – If the Nets can’t trade for Howard before December 31 (and they almost certainly can’t), they should simply hold enough cap space for him next summer, keeping their assets and lack of Hedo Turkoglu so they can have a better team in 2012-13.

    • Larry Coon

      To the best of my knowledge, the Magic intend to hold on to Howard through the all-star break, and move him shortly before the trade deadline. So that takes extensions out of the picture — he would have to be traded by December 30 in order to extend prior to the end of the season*.

      So if they’re confident that Howard will sign with them next summer, they’re probably better off hanging onto Brook Lopez & their draft picks, avoiding Hedo Turkoglu, and signing him outright when they can. If they’re not confident, then by trading for him they have the ability to offer him a full Bird contract (five years, 7.5 percent raises), which would give him the upper hand.

      A number of teams are considering the possibility that Howard may be traded to a team that he won’t necessarily re-sign with (LA, Chicago), and that Howard will test the free agent market. They’re preparing to have cap room ready next summer.

      *There is also the possibility that Howard could opt-in for 2012-13 with his new team, like Chris Paul did with the Clippers.

14. Chicago Charles

    Other than locking in a “designated” player to a contract for 7-9 years–are there any cap considerations for the team–not just the player–like a luxurary tax exemption?

    • Larry Coon

      Nope.

15. taoye

    The new CBA does not allow teams in luxury tax land to make sign-and-trade deal. Does that mean they can not trade their own FA in a SnT deal, nor can they receive a FA in a SnT deal? Or is the restriction only one sided?

    • Larry Coon

      If refers to teams ACQUIRING players, not to sending them away. But also keep in mind that this rule doesn’t kick in for two years, and the team has to be over the “apron” ($4 million over the tax line) before their ability to use sign-and-trade is restricted.

16. Patrick

    Dear Larry,
    Thank you very much for answering my question in your last chat (or the one before that). I really appreciated the in-depth answer.
    Have a great 2012!
    Patrick

    • Larry Coon

      Thanks! And we’ll wrap up my chats for 2011 on that note. (Although given the question ordering in the chats, this one will likely appear somewhere in the middle.)

      Have a happy and safe new year, everyone.

17. Jeff

    If NYK wants to resign Baron Davis this summer, can they use any sort of Bird Exception or must they use the MLE?

    • Larry Coon

      They’ll have the one-year version of Bird rights, called (ironically) Non-Bird. But they can only use Non-Bird to give him a 20% bump. They’ll have to use the Mid-Level if they want to give him more.