A very simple question

Post #1 » by **Three34** » Sun Dec 21, 2008 10:59 pm

Can minimum salary contracts, signed using the minimum salary exception, have trade kickers?

Dunkenstein · Post #2 » by **Dunkenstein** » Mon Dec 22, 2008 12:44 am

The CBA prohibits unlikely performance bonuses from being included in a minimum contract. But since I don't believe that a trade bonus (or kicker) would be considered a performance bonus, I can't find anything in the CBA that would prohibit having a trade kicker included in a contract signed using the minimum salary exception.

Post #3 » by **Three34** » Mon Dec 22, 2008 7:28 am

See, that's what I was thinking. Devin Brown's got one, for example, and yet the Hornets gave their whole MLE to Posey and used their BAE on Pargo last year. So they MUST have used the minimum, which means the answer must be yes. I also think that Calvin Booth got one from Billy King, which then became a factor when he was dumped on Minnesota.

I only asked because, when flicking through the FAQ, I noticed where it said that the minimum salary exception "salary was always minimum". This cast the Cloak Of Doubt in my mind.

GrandAdmiralDan · Post #4 » by **GrandAdmiralDan** » Mon Dec 22, 2008 8:08 am

Sham wrote:See, that's what I was thinking. Devin Brown's got one, for example, and yet the Hornets gave their whole MLE to Posey and used their BAE on Pargo last year. So they MUST have used the minimum, which means the answer must be yes. I also think that Calvin Booth got one from Billy King, which then became a factor when he was dumped on Minnesota.

I only asked because, when flicking through the FAQ, I noticed where it said that the minimum salary exception "salary was always minimum". This cast the Cloak Of Doubt in my mind.

Yeah, I also have your "Cloak of Doubt" on this.
That being said, Dunkenstein could be 100% correct. I certainly can't think of anything specific to say he isn't.

One thing that does occur to me, if indeed TK's are allowed to be written on contracts signed with the MSE, is that a team trading for that player (and thus activating the TK) would need some other method (TPE, DPE, cap space) of absorbing that salary since the incoming salary would now exceed what the MSE can absorb. Yes? Or no?

Dunkenstein · Post #5 » by **Dunkenstein** » Mon Dec 22, 2008 9:23 am

Sham wrote:See, that's what I was thinking. Devin Brown's got one, for example, and yet the Hornets gave their whole MLE to Posey and used their BAE on Pargo last year. So they MUST have used the minimum, which means the answer must be yes. I also think that Calvin Booth got one from Billy King, which then became a factor when he was dumped on Minnesota.

I only asked because, when flicking through the FAQ, I noticed where it said that the minimum salary exception "salary was always minimum". This cast the Cloak Of Doubt in my mind.

Speaking of Posey, it should be noted that while he got the full MLE, he also got a 10% trade kicker. This reinforces my contention that a trade bonus does not fall under the category of unlikely performance bonuses which cannot be used if it might bring the player's salary over the full MLE.

Larry's comment is true, because as soon as a player signed using the MSE with a trade kicker is traded, he is no longer a minimum salary player. As a result, it should be noted that (as in Booth's case) when the trade bonus kicks in, because the player is no longer a minimum player, the league no longer pays a portion of the player's salary.

And I think Dan is correct. A team needs more than an MSE to trade for a minimum player with a trade kicker, since once that trade kicker is exercised, he is no longer a minimum player.

Post #6 » by **Three34** » Mon Dec 22, 2008 12:10 pm

Minnesota took on Booth along with Carney with a TPE, so that ties in.

Post #7 » by **Three34** » Mon Dec 22, 2008 12:11 pm

Also, if a player's on a minimum salary contract with a trade bonus in it, and he's traded to another team, but that other team can only receive him via the MSE (because they have no TPE, DPE or cap space), can the trade bonus be waived?

GrandAdmiralDan · Post #8 » by **GrandAdmiralDan** » Mon Dec 29, 2008 10:39 am

Sham wrote:Also, if a player's on a minimum salary contract with a trade bonus in it, and he's traded to another team, but that other team can only receive him via the MSE (because they have no TPE, DPE or cap space), can the trade bonus be waived?

I would tend to think it could, just as in the other situations when a player is allowed to consent to waive it to make the trade work. I would have to check the actual CBA on this next time I have slightly more time (and of course if anyone gets around to it before me, more power to you). If so, we'll have to make a slight edit to question #84 in the FAQ. That question currently has no revision history, so perhaps none of us thought to examine that particular angle.

Then again, the wording in the answer to that question may be the way it is for a reason.

LarryCoon · Post #9 » by **LarryCoon** » Sun Jan 4, 2009 8:48 pm

Well...first of all, they no longer (as of '05) give the player the ability to waive his trade bonus (or a portion thereof), because it constitutes giving the player trade veto rights. That said, the cases where the trade bonus is amended (and amended with consent in previous CBAs) refers specifically to cases where it would take the salary over the maximum salary.

That notwithstanding, I think you're talking about a situation that could never arise to begin with. A minimum salary contract (signed using Exhibit 1A rather than Exhibit 1) prohibits bonuses of any kind. Refer to Article II, Section 6(f):

Every Contract entered into between a player and Team that is intended to
provide for Compensation equal to the Minimum Player Salary (with no bonuses of any kind) for
each Season must contain the following sentence in Exhibit 1A of such Contract and shall be
deemed amended in the manner described in such sentence: “This Contract is intended to provide
for Compensation for the ____________ Season(s) equal to the Minimum Player Salary for such
Season(s) (with no bonuses of any kind) and shall be deemed amended to the extent necessary to
so provide.”

I know this could be read with multiple interpretations -- one is that it doesn't permit bonuses of any kind. The other interpretation is that this paragraph only applies to that subset of minimum salary contracts which provide for no bonuses of any kind, and this paragraph is mute regarding other minimum salary contracts (which do provide bonuses). My experience in talking to them directly tells me that while the second interpretation is possible (and is how I would objectively read it), the first interpretation is the correct one.

LarryCoon · Post #10 » by **LarryCoon** » Sun Jan 4, 2009 8:52 pm

And just one more data point -- I did specifically ask the league about Exhibit 1 vs. 1A -- can a minimum salary contract utilize Exhibit 1 at the team's discretion? I was told that no, they always use 1A when it's the minimum salary. While it's not airtight, it also strongly suggests that no minimum salary contract contains bonuses.

Post #11 » by **Three34** » Thu Jan 8, 2009 1:44 am

OK. So, going to back to Devin Brown for a minute:

a) Did he get a trade kicker, as it seems like he did?
b) If so, how?

GrandAdmiralDan · Post #12 » by **GrandAdmiralDan** » Fri Jan 9, 2009 3:34 pm

LarryCoon wrote:Well...first of all, they no longer (as of '05) give the player the ability to waive his trade bonus (or a portion thereof), because it constitutes giving the player trade veto rights.

They do though, unless I am not understanding what you are saying above somehow...

I believe Sham was referring to this:

The CBA allows the player to waive part of his trade bonus, if necessary to allow a trade to fit within the 125% plus $100,000 margin.
http://members.cox.net/lmcoon/salarycap.htm#Q84

LarryCoon · Post #13 » by **LarryCoon** » Sat Jan 10, 2009 4:36 am

GrandAdmiralDan wrote:They do though, unless I am not understanding what you are saying above somehow...

Ug....no, I was thinking about one set of rules while talking about the other. Sorry 'bout that.

Post #14 » by **Three34** » Tue Mar 30, 2010 5:36 am

This thread is bumped from over a year ago.

It turns out that Devin Brown did have a trade kicker in his minimum salary deal after all. Therefore, when the Bulls traded for him in January, did they:

a) use a TPE created from their 2009 deadline deals to incorporate his new, slightly bigger salary, or
b) did Brown waive it?

B seems unlikely considering that he had earlier vetoed a deal that would have necessitated him doing exactly that, so I can't imagine the passing of a single month would have changed much in his mind. Therefore, was it A?

I ask this because it determines his cap hold in the offseason. If he didn't have a trade bonus, then he's got a cap hold of $854,389. But if he did, it's more like $1.2 millionish. This will matter a lot when we're trying to find ways of signing Chris Bosh to the max while simultaenously retaining Early Bird rights on the mighty Devin Brown in order to give Bosh the star wing player he has so desperately missed during the Colangelo era.

The lesson here, as always; trade kickers in minimum salary contracts are a pretty bad idea.

bgwizarfan · Post #15 » by **bgwizarfan** » Wed Mar 31, 2010 2:17 pm

I'm pretty sure it was just a straight up 1-1 simultaneous trade. In other words, both salaries fit within the 125% +$100,000 rule. No TPE's used... perhaps they could have used them, but since both CHI and NO did not get any TPE's from this resulting trade, then I'm fairly certain both teams just made it a simultaneous trade.

As for the cap hold, I'm not certain how that would work. Brown would either be the normal minimum for a 2 year free agent or 130% of his salary now with the bonus. But as you said, not really relevant since Brown is horrible and should be renounced regardless.