Over 36 rule

[ep1987]

Does the cbafaq have this correct?

http://www.cbafaq.com/salarycap.htm#Q56

Specifically the last part about aggregation.

In the first season it applies to the example Coon takes the cap hits and aggregates and distributes. Then in the following two years he uses the payment schedule.

http://www.ipmall.info/hosted_resources ... ion%29.pdf

Page 143 is the relevant section of the cba; i personally belive that Coon may have erred and was supposed to use the payment schedule for the first aggregation also.

[answerthink]

I too believe that LC made a slight mistake, though I do not believe he was supposed to use the payment schedule but rather the team salary amount.

Art VII, Sec 3(a)(2)(iii) says that all “Salaries” will be aggregated and attributed in equal shares. “Salaries,” according to Art I, Sec 1(ggg), refers to a player’s cap hit as opposed to his actual compensation. I believe the FAQ answer would have been fine without the last two charts.

[ep1987]

But remember we're talking about a cap hit which has been artificially modified and is then subject to aggregation and re-distribution. Furthermore your suggestion would render repeating the process pointless once all zero years had been re-distributed.

"For each Salary Cap Year of an Over 36 Contract beginning
with the second Salary Cap Year prior to the First Zero Year
(as defined in Section 3(a)(2)(vi) below), if the player has not
been placed on waivers as of the July 1 of such Salary Cap
Year, then the Salaries of the player for such Salary Cap
Year and the subsequent two (2) or fewer Salary Cap Years
covered by the Contract (including any Zero Year (as
defined in Section 3(a)(2)(vi) below)) shall, on such July 1,
be aggregated and attributed in equal shares to each of such
three (3) or fewer Salary Cap Years."

My emphasis.

[answerthink]

I am not sure why you are emphasizing what you are. In LC’s example, the Salary "of the player for such Salary Cap Year” would be $5.225 million. The Salaries in “the subsequent two (2) or fewer Salary Cap Years covered by the Contract (including any Zero Year)” would be $5.45 million and the zero year of $0.

I find both your and LC’s methods unlikely because, in each case, the combined cap hits would equal more than the value of the contract.

I could be mistaken. I have certainly been shocked by the league's interpretation of what I deemed clear language in the past. (Interestingly, the 2005 FAQ has it distributed as I am suggesting).

[ep1987]

I'm emphasising 'or fewer'; when would there ever be fewer than two salary subsequent cap years that needed to be aggregated and re-distributed under your proposal?

The sum of the cap hits being greater than the salary paid is entirely the point of the over 36 rule; it is supposed to make such contracts unnattractive, it makes no sense for the cap hit to fall so dramatically after the first year.

Basically i believe that this rule is intended to penalise teams in the first year of a four year deal and the first two years of a five year deal (the deferred salary added to these seasons ends up counting twice).

[answerthink]

When there are two years remaining on the contract, there is one subsequent year. The salaries need to be aggregated and re-distributed every salary cap year. If the future salaries change (due to changes in recognition of bonuses, etc.) then the previously aggregated and re-distributed amounts will change.

I don't agree that the point is to make these contracts unattractive. I believe the point is that the league doesn't believe such old guys can make it through so many years (effectively making these contracts added payments into retirement), so they avoid that theoretical circumvention by redistributing. As the player proves the league wrong, they adjust.

The language in the CBA seems quite clear (insofar as the term “Salaries” is defined). It is possible that the league messed up in drafting the document. It is also possible that I am mistaken. You and I are reading the same words. I am not sure what more I can tell you.

Anyway, I am not in the best of moods so I apologize if any of that seems rude.

[ep1987]

No not at all; the over 36 rule is a somehat murky issue. I fully understand where you're coming from and the re-calculation every year could be to account for unlikely incentives becoming likely (or vice versa) and/or trade kickers.

After reading the 2005 and 1999 faq it seems this rule harkens back to a time when longer contracts were permitted such that multiple re-calculations were necessary; this would make the reductions in cap number much less dramatic.

It would also mean that as far as aggregation and re-distribution were concerned the re shifting of deferred salary would occur more often compared to re-calculations due to bonuses and kickers.

Conclusion; you're very likely correct.