Buy-outs

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NYG
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Buy-outs 

Post#1 » by NYG » Sat Aug 12, 2017 3:54 pm

Is there a minimum requirement in a buy out? For exaggerated example, if the Bulls bought out Wade, if he agreed to gets $0 in 2017-18 to void his contract with the Bulls is that legal?

Is there a waiver process for bought out players?

What is the specific rules on buy outs?
HartfordWhalers
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Re: Buy-outs 

Post#2 » by HartfordWhalers » Sat Aug 12, 2017 6:31 pm

NYG wrote:Is there a minimum requirement in a buy out? For exaggerated example, if the Bulls bought out Wade, if he agreed to gets $0 in 2017-18 to void his contract with the Bulls is that legal?

Is there a waiver process for bought out players?

What is the specific rules on buy outs?


Bought out players are waived through the normal process, and must clear waivers on their original contracts.

The buyout is an agreement about what happens to a player if they clear waivers. There is no problem with any and all unearned money being agreed to go anywhere between 0 and 100% paid.
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Re: Buy-outs 

Post#3 » by DBoys » Sat Aug 12, 2017 11:12 pm

To add to that ...

*There is no such thing in the CBA as a "buyout."
*What is termed a "buyout" by media is actually just a negotiated modification to the "guarantee" provision in a contract.
*The guarantee part of the contract is one of the few parts of an NBA contract that can be altered at a later date by mutual consent.
*As HW noted, they will say if X happens (in these cases, the if the player clears waivers, typically tied to doing so by such-and-such date), then the guaranteed amount changes in the following way.
*Because it's a change to an already-executed contract, it requires the full & signed agreement of both player and team.
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Re: RE: Re: Buy-outs 

Post#4 » by DoItALL9 » Fri Oct 20, 2017 2:34 pm

DBoys wrote:To add to that ...

*There is no such thing in the CBA as a "buyout."
*What is termed a "buyout" by media is actually just a negotiated modification to the "guarantee" provision in a contract.
*The guarantee part of the contract is one of the few parts of an NBA contract that can be altered at a later date by mutual consent.
*As HW noted, they will say if X happens (in these cases, the if the player clears waivers, typically tied to doing so by such-and-such date), then the guaranteed amount changes in the following way.
*Because it's a change to an already-executed contract, it requires the full & signed agreement of both player and team.

Do you know there to be any rule against paying "more" in a buyout?

Example: could the Nets negotiate a buyout with Jeremy Lin right now and pay this year's and next year's salary at once in exchange for him not opting into his player option for the 2018-2019 season?

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Re: RE: Re: Buy-outs 

Post#5 » by DoItALL9 » Fri Oct 20, 2017 2:41 pm

HartfordWhalers wrote:
NYG wrote:Is there a minimum requirement in a buy out? For exaggerated example, if the Bulls bought out Wade, if he agreed to gets $0 in 2017-18 to void his contract with the Bulls is that legal?

Is there a waiver process for bought out players?

What is the specific rules on buy outs?


Bought out players are waived through the normal process, and must clear waivers on their original contracts.

The buyout is an agreement about what happens to a player if they clear waivers. There is no problem with any and all unearned money being agreed to go anywhere between 0 and 100% paid.

Do you know there to be any rule against paying "more" in a buyout?

Example: could the Nets negotiate a buyout with Jeremy Lin right now and pay this year's and next year's salary at once in exchange for him not opting into his player option for the 2018-2019 season?
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Re: RE: Re: Buy-outs 

Post#6 » by HartfordWhalers » Fri Oct 20, 2017 5:13 pm

DoItALL9 wrote:
HartfordWhalers wrote:
NYG wrote:Is there a minimum requirement in a buy out? For exaggerated example, if the Bulls bought out Wade, if he agreed to gets $0 in 2017-18 to void his contract with the Bulls is that legal?

Is there a waiver process for bought out players?

What is the specific rules on buy outs?


Bought out players are waived through the normal process, and must clear waivers on their original contracts.

The buyout is an agreement about what happens to a player if they clear waivers. There is no problem with any and all unearned money being agreed to go anywhere between 0 and 100% paid.

Do you know there to be any rule against paying "more" in a buyout?

Example: could the Nets negotiate a buyout with Jeremy Lin right now and pay this year's and next year's salary at once in exchange for him not opting into his player option for the 2018-2019 season?


So:

1) There are rules on when a contract can be renegotiated up in general. These require it be 3 years after the contract was signed, so Lin wouldn't qualify
2) Renegotiations require cap space, so even if he qualified the Nets would need to have that much cap space which they don't (they do have some, just not enough to cover Lin's next year salary)

In general you need to meet those two to pay 'more', neither of which the Nets do. Which means that in general the answer is a clear no.

Teams have historically tried to do this similar effect with trades:
Sixers trade Jason Thompson owed 6.5m and 3m for Wallace owed 10m / 0m {Not the exact amounts but close enough off memory.}
Thus moving the cap hit all into one year.

The trade market is imperfect, and trades like that have often looked like 2/2 for 5/0 (or even 6/0) where the team looking to dump the future obligation has to eat a larger obligation now than they are dumping.
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Re: RE: Re: RE: Re: Buy-outs 

Post#7 » by DoItALL9 » Fri Oct 20, 2017 5:16 pm

HartfordWhalers wrote:
DoItALL9 wrote:
HartfordWhalers wrote:
Bought out players are waived through the normal process, and must clear waivers on their original contracts.

The buyout is an agreement about what happens to a player if they clear waivers. There is no problem with any and all unearned money being agreed to go anywhere between 0 and 100% paid.

Do you know there to be any rule against paying "more" in a buyout?

Example: could the Nets negotiate a buyout with Jeremy Lin right now and pay this year's and next year's salary at once in exchange for him not opting into his player option for the 2018-2019 season?


So:

1) There are rules on when a contract can be renegotiated up in general. These require it be 3 years after the contract was signed, so Lin wouldn't qualify
2) Renegotiations require cap space, so even if he qualified the Nets would need to have that much cap space which they don't (they do have some, just not enough to cover Lin's next year salary)

In general you need to meet those two to pay 'more', neither of which the Nets do. Which means that in general the answer is a clear no.

Teams have historically tried to do this similar effect with trades:
Sixers trade Jason Thompson owed 6.5m and 3m for Wallace owed 10m / 0m {Not the exact amounts but close enough off memory.}
Thus moving the cap hit all into one year.

The trade market is imperfect, and trades like that have often looked like 2/2 for 5/0 (or even 6/0) where the team looking to dump the future obligation has to eat a larger obligation now than they are dumping.

Thanks a bunch. I was considering how the Lakers could try to trade Deng or Clarkson for Lin to clear some cap space for summer 2018

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Re: Buy-outs 

Post#8 » by DBoys » Fri Oct 20, 2017 7:40 pm

The Lakers will try to trade Deng for an expiring contract. I can't imagine anyone will be interested in a simple Deng-for-expiring (since Deng's contract is so horrendous), so most likely the best the Lakers can hope for is to find a way to attach extra-desirable assets to Deng as part of the outgoing. Ingram has been mentioned speculatively, although I wonder if that would even be enough value to create interest, since the Deng deal is really bad.

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