In the third year of an offer sheet to a veteran with one or two years of experience, the team making the offer is allowed to offer a considerable jump in salary, based on the amount of room they have under the cap. But what if they have a ton of room under the cap (let's say 30 million)? I would assume maximum salary restrictions come into play. My question is:
What can equal the max? The salary in the third year of the contract, or the average salary over the life of the contract? My guess is the former.
Max Salary Using Gilbert Arenas Provision
Max Salary Using Gilbert Arenas Provision
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JNichols42887
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Re: Max Salary Using Gilbert Arenas Provision
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answerthink
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Re: Max Salary Using Gilbert Arenas Provision
Neither.
The first-year salary in the offer sheet provided to a restricted free agent with one or two years of service cannot be greater than the average salary. The second-year salary in such an offer sheet is limited to the standard 8% raise.
If the offer sheet calls for the maximum salary allowed in the first two seasons, as described above, the third-year salary can be as high as it would have been in the third year had the first year salary not been limited to the average salary by this rule.
Perhaps an example is easier to follow. Had the player’s salary not been limited, in the first year of his contract he would have been eligible for the greater of (x) 25% of the 48.04% salary cap in effect at the time the contract is executed, (y) 105% of the salary for the final season of the player’s prior contract, or (z) $9 million. Therefore, the maximum salary the player could receive in the third year of such an offer sheet is the above amount, multiplied by 1.16.
Raises (and decreases) for the fourth and fifth seasons are limited to 6.9% of the salary in the third season.
If the raise in the third season exceeds the standard raise (8% of the salary in the first season of the contract), the average salary of the entire contract must fit under the salary cap at the time the contract is executed.
The first-year salary in the offer sheet provided to a restricted free agent with one or two years of service cannot be greater than the average salary. The second-year salary in such an offer sheet is limited to the standard 8% raise.
If the offer sheet calls for the maximum salary allowed in the first two seasons, as described above, the third-year salary can be as high as it would have been in the third year had the first year salary not been limited to the average salary by this rule.
Perhaps an example is easier to follow. Had the player’s salary not been limited, in the first year of his contract he would have been eligible for the greater of (x) 25% of the 48.04% salary cap in effect at the time the contract is executed, (y) 105% of the salary for the final season of the player’s prior contract, or (z) $9 million. Therefore, the maximum salary the player could receive in the third year of such an offer sheet is the above amount, multiplied by 1.16.
Raises (and decreases) for the fourth and fifth seasons are limited to 6.9% of the salary in the third season.
If the raise in the third season exceeds the standard raise (8% of the salary in the first season of the contract), the average salary of the entire contract must fit under the salary cap at the time the contract is executed.
Re: Max Salary Using Gilbert Arenas Provision
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JNichols42887
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Re: Max Salary Using Gilbert Arenas Provision
Perfect. Thanks!