When are incentives adjusted for cap purposes?

[So Cal Blazer Fan]

I know that there is adjustment each year of incentives in player contracts as far as whether they are labeled as likely or unlikely. I'm wondering if this transition takes place once a team's season is completed, once the season is over for all teams, on July 1st, or ??????

For example, the $333,333 unlikely incentive in Zach Randolph's contract that was talked about extensively a couple of months ago when he made the All-Star team. I know that in future years that this incentive will be listed as likely and will increase his $$$ impact against the cap. But will the Grizzlies have that much less cap space on draft day 2010 or does it essentially only affect their cap position starting in 2010-11?

I don't see it having a major effect on any team this year, but I could see how it might affect a future team depending on if the transition (either up or down) in cap space takes place before or after the draft.

[answerthink]

Salaries are adjusted for performance bonuses at the beginning of every salary cap year. In addition, performance bonuses may be re-evaluated if a player is traded.

Neither unlikely bonuses that are ultimately earned nor likely bonuses that are ultimately not earned would change a team's original cap calculation for the then current year. They do, however, change a team’s tax calculation.

[FGump]

"neither...would change a team's original cap calculation for the then current year."

Why not? The cap is a continuous ongoing calculation, not a one-time thing. Once a bonus is earned or not earned, wouldn't the team's cap at some point be charged accordingly (even if that meant a change) rather than continue to be listed as a (wrongly) projected item?

[answerthink]

I can't really answer the question of why, but the CBA has no such adjustment mechanism.

The Marcus Camby discussion from a few days ago is a good depiction. Utilizing Dunk's info, Camby has earned all $1.5M of his likely bonuses and $500k of his unlikely bonuses in addition to his $7.65M base salary, but I believe his salary is still being reported at $9.15M for cap purposes.

[Dunkenstein]

I believe his salary is still being reported at $9.15M for cap purposes.

That's correct. I think it's because bonuses that are achieved or not achieved are toted up on June 30th, the same time as final luxury tax numbers are calculated.

[bgwizarfan]

Here's another question related to that. Take Nate Robinson, who was given $4,000,000 with $1,000,000 of Unlikely Bonuses this year. The $1 million was for the team making the playoffs and Nate playing in 58 games. Since the Knicks did not make the playoffs in 08-09, the $1 million was Unlikely. When he switched to Boston, the $1,000,000 became Likely since Nate played in >58 Games in 08-09 and the Celtics made the playoffs in 08-09. Robinson's salary became $5,000,000.

However, Nate fell out of the rotation and suspectly only played in 56 total games (Boston kept him out of 2 April games... hmmmmm). Therefore, for Luxury Tax purposes, he will only count $4 million and not $5.

My question is what now becomes of his Free Agent Amount this summer? Is it based off of the $5 million amount (so $10,000,000). or is it based off of the $4 million amount (so 8 million). I know the Celts are over the cap and they won't be stressing over this, but this is a situation that could arise elsewhere and I'm interested anyway.

[Dunkenstein]

Robinson's cap hold will be based on what he was paid ($4M).

[So Cal Blazer Fan]

Thanks for the information. Much appreciated.