Blazers Toxic Ofer sheet to Milsap

[Dekko1]

It not only has the signing bonus paid up front as normal but also the first year's salary, making the Jazz pay a third of the 30 mil contract immediately if they match.
Any predictions on them matching?

Is adding the rest of the first years salary to be paid up front another legal but really not what was intended for the rule with the lower % for RFAs?

http://blog.oregonlive.com/behindblazersbeat/2009/07/what_is_a_toxic_offer_how_abou.html

The Trail Blazers four-year, $32 million offer to Utah power forward Paul Millsap is front-loaded with what is essentially a $10.3 million signing bonus that must be paid within the first seven days of the contract being approved, according to the player's agent.

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If Utah doesn't match, the Blazers will pay Millsap $6.2 million the first year, $6.2 million the second year, $6.7 million the third year and $7.2 million the fourth year. The deal comes with an up-front payment of a $5.6 million signing bonus and $4.7 million of the contract's first year salary.

"We are definitely pleased with the offer - pleased and excited,'' said agent DeAngelo Simmons. "Paul is excited that Portland showed that amount of interest. They really stepped up and saw his true value.''

The $10.3 million to be paid within seven days figures to be a huge deterrent to a Jazz team that is already over the tax threshold for next season. The team is rumored to be trying to create cap space by trading Carlos Boozer and his $12.7 million salary, but the only way that tactic could clear space is if they deal with a team under the salary cap. Out of the five teams that started the free agent period under the cap, only Oklahoma City has significant space remaining.

Originally, the Blazers offered Millsap a three-year, $24 million deal, but a fourth year was added in order to increase the signing bonus. The league's collective bargaining agreement limits a signing bonus on an offer sheet to 17.5 percent of the deal. The money up front was important to Millsap, 24, because he made the league minimum for the past three seasons ($797,000 last season).

While the Jazz were saying signing Millsap was an offseason priority, they were reluctant to provide the 6-foot-8 forward an offer. As the Blazers were in the process of sending over their offer sheet this week, Simmons said the Jazz came in with a $7 million offer on Thursday. Simmons tried to get the Jazz to go to $8 million, but they balked.

He hasn't talked to Utah since.

"I haven't heard anything from them,'' Simmons said. "I'm sure they will wait until the last day (Friday). But right now, everything is on schedule.''

[So Cal Blazer Fan]

Based on what was reported today, this is how the offer looks to be formatted:

Year 1 - $6,225,000 base salary + $1,400,000 bonus = $7,625,000 cap hit
Year 2 - $6,225,000 base salary + $1,400,000 bonus = $7,625,000 cap hit
Year 3 - $6,725,000 base salary + $1,400,000 bonus = $8,125,000 cap hit
Year 4 - $7,225,000 base salary + $1,400,000 bonus = $8,625,000 cap hit

Millsap gets a $5,600,000 bonus upfront. He also apparently gets the maximum 75% of the first year's salary paid upfront (which is $4,668,750). So the total amount of money paid in July (either by the Blazers or the Jazz) will be $10,268,750. He'll be due the rest of his $1,556,250 regular season salary as normal - in incremental payments as the season progresses.

[Dunkenstein]

On a side note, in order to give Millsap that offer sheet, Portland must have had to renounce such all-time favorites as Chris Dudley, Detlef Schrempf and Voshon Lenard.

[Dekko1]

Not Duds...they just clandestinely contribute to his foundation that provides a BBall camp for kids with diabetes...

[Twinkie defense]

What does it matter to the Jazz if Millsap's first year money is paid in installments or all at once? Seems the main deterrent would be the total cap hit and the luxury tax implications, which are payable at a later date. Surely it's not a problem for them to scare up $6 mil in cash right away?

[FGump]

What does it matter to the Jazz if Millsap's first year money is paid in installments or all at once? Seems the main deterrent would be the total cap hit and the luxury tax implications, which are payable at a later date. Surely it's not a problem for them to scare up $6 mil in cash right away?

Good point. What is the difference between toxic and acceptable?

The cash flow drain went up considerably, of course. But that's just cash flow, because now they'll be able to pay less in later years than they otherwise would have. Yes there's a time value of money (assuming they borrow the cash), but it's easy money to get given the fact that the NBA has credit lines waiting for teams if they want and need to borrow any money; and the net cost to the Jazz would probably be around $1M.

On the visible hit, which is paying money they might not otherwise have had to pay, the cap/tax hit on this deal in year one versus a normal offer is only increased by about $700,000.

That's makes perhaps $1,700,000 extra on a 4 year deal.

Given the fact the Jazz really seem to prefer Millsap, I have a hard time seeing how about $425,000 per year total in net added cost (less than the price for a minimum salary rookie free agent) will ultimately prove to be a decider if Millsap is the guy they want. At $8M a year compared to the $12+M they were paying for Boozer, it looks like an easy choice to me.

I'd also wager that Utah will take the full 7 days to "decide" even if the answer is as easy to them as it looks to me. That makes Portland squirm, takes Pritchard out of the free agency market while he has to watch helpless for a week as another set of free agents go elsewhere (look at it as their payback for such a hardball front-loaded offer, one that ultimately will cost Utah cash but won't gain the Blazers anything), and gives the Jazz a week with leverage to gather bids for Boozer (the leverage being, we might choose to keep him). Once they match, they're more in "have to" mode.

[raleigh]

On a side note, in order to give Millsap that offer sheet, Portland must have had to renounce such all-time favorites as Chris Dudley, Detlef Schrempf and Voshon Lenard.

By far my favorite part of the offseason. Why there's no sunset provision on rights is an eternal mystery to me...

[Three34]

They lose them when players officially file their retirement papers. However, players rarely do that until they're pension eligible. Aaron McKie and Keith Van Horn are the reasons why.

[Dunkenstein]

They lose them when players officially file their retirement papers. However, players rarely do that until they're pension eligible. Aaron McKie and Keith Van Horn are the reasons why.

Also many of them just can't be bothered to fill out the paperwork. There's no way a Chris Dudley or a Detlef Schrempf is going to be included in a sign-and-trade.

[daddyfivestar]

If Utah matches, is there a waiting period they can trade Millsap (other than the 1 yr to Port)?

Scenario - they match then trade him receiving back $3 mil and player savings to make up the difference in the "up front" bonus they'd have to dole out.

What if they matched and traded him the same day? Would they even have to give him anything or could the new team, say OKC or MEM, pay him? Is this even possible (not plausable, I know this is weird thinking)?

Why was I wondering?
Because Portland/Utah/Denver are pretty strong rivals and I think Portland and Denver are places they'd rather not have Millsap go.


EDIT - NOW SAme with Gortat. Can Orlando deal him anywhere soon, ex Dallas?

[Three34]

They lose them when players officially file their retirement papers. However, players rarely do that until they're pension eligible. Aaron McKie and Keith Van Horn are the reasons why.

Also many of them just can't be bothered to fill out the paperwork. There's no way a Chris Dudley or a Detlef Schrempf is going to be included in a sign-and-trade.

It's probably like a 0.05% chance, but for what it's worth, the Mavericks discussed working Vernon Maxwell into a connotation of the Kidd trade had they not found a workable alternative. That would have sucked, but they did consider it.

The league might kick off, though.

[Dunkenstein]

The league might kick off, though.

I have a tough time picturing David Stern as a Place Kicker. Now Adam Silver . . . I hear he's got quite a leg, but no accuracy past 40 yards.

[Three34]

At some point you will embrace my English terminology. Not today, maybe, but there will come a time.

[Dunkenstein]

At some point you will embrace my English terminology. Not today, maybe, but there will come a time.

Would "working Vernon Maxwell into a connotation of the Kidd trade" be another example of your "English terminology"? Are you talking about the language used by people living in England, or the one used by those who wear English Leather cologne?

[Three34]

On second thoughts, maybe you'll never embrace it.

[FGump]

Another question on a signing bonus....

I understand how the cap hit is allocated. But I'm wondering about the ramifications in the event of a future trade.

The bonus is of course paid up front but capwise is spread over the length of the contract. But let's say at some point Utah matches then wants to trade him. Do they get any percentage of that bonus - since it's considered to be part of the full contract and not just a part of year one - reimbursed to them by the team that trades for his contract? Or is that effectively a massive salary add-on for whoever has him at the point in time the contract begins?

[bstein14]

I would guess that his new team would not have to pay any of the bonus (as its already been paid) and I think that would make him a more valuable asset.

I'm surprised more teams don't do this, as they create a player's contract that more cash strapped teams would be interested in.

[bgwizarfan]

I have a couple questions with this situation. First, does anyone have a reference point for the 75% Advance? Where in the CBA is it? I know it must exist, but I can't seem to find where it says you can receive 75%

Secondly, the signing bonus seems to be 17.5% of the total compensation (including the signing bonus). Like you'd think if the Base Compensation was $32,000,000, and the signing bonus would be $5,600,000 (which it is), that the total compensation would go to $37,600,000. But the Base Compensation just gets parred down so that the $5,600,000 fits within the $32,000,000. So it in essence becomes $26,400,000 with a $5,600,000 SB, which is much greater than 17.5%.

I know in Larry's FAQ he goes through an example where the compensation is parred down, but to me that is just relevant because it would violate the MLE. When cap room's involved, I don't get why it would automatically be parred down. Can you just make whatever you want your total offer to be 20% (or 17.5?).

i.e. i'm offering my player $100,000,000 (assuming it's legal). Can $20,000,000 be a signing bonus, and then it becomes $80,000,000 of Base Compensation? Even though the bonus is then 25%.....

[Dunkenstein]

I have a couple questions with this situation. First, does anyone have a reference point for the 75% Advance? Where in the CBA is it? I know it must exist, but I can't seem to find where it says you can receive 75%

Art II, Sect 12(e) says that "Every Uniform Player Contract entered into or extended after the date of this Agreement must provide that for each Season of such Contract, the player will be paid at least twenty (20) percent of his Salary for such Season, excluding Likely Bonuses and any portion of the player’s Salary attributable to a trade bonus, in Current Base Compensation in accordance with the payment schedule provided in paragraph 3 of the Contract."

My reading of that paragraph is that up to 80% of a player's yearly salary can be paid in advance of the normal 12 semi-monthly payments that begin on November 15.