Contract re-negotiation w/ Over 36 rule?

[JES12]

I understand the new CBA will allow a downward re-structure where a player cannot drop more than 40% of his current year salary and shift that money to a future year making the contract length longer.

But I also know that the over-36 year is almost the opposite when it comes to cap holds.

So I am looking at Dirk's situation, but it does not have to be him specifically.

Let's say a player's contract looks like this:

34yo: $20 mil
35yo: $20 mil
Total: $40 mil

Re-negotiates to something like this:
34yo: $14 mil
35yo: $14 mil
36yo: $14 mil
Total: $42 mil

Would the over-36 rule turn around and apply $7 mil to the first two years making his cap hold $21 mil? Thus negating any strategic reason to re-negotiate?

Maybe I am completely off, but I would like to be straightened out on this.

[mysticbb]

Maybe I am completely off, but I would like to be straightened out on this.

Not quite sure how that is handled in the new CBA, but under the old CBA Nowitzki could sign an extension next season to add two more years and his contract would not fall under the "over 36" rule. Nowitzki is 34 next offseason, thus he can sign a 4 year contract without having to apply the "over 36" rule.

If that stays the same in the new CBA (which is not unlikely), the Mavericks could indeed extend Nowitzki for two more years while droping the salary for 2012/13 and 2013/14 to $12.54m and $13.63m respectively while making up for it during the last two seasons (even give him more money overall).

[JES12]

Any info on this topic?

The previous post does not sound right to me as over-36, as I understand it, is not when you sign your contract, but how many of those years occur when you are over 36.

[DBoys]

I understand the new CBA will allow a downward re-structure where a player cannot drop more than 40% of his current year salary and shift that money to a future year making the contract length longer

^ Not allowed under new CBA

[HartfordWhalers]

I understand the new CBA will allow a downward re-structure where a player cannot drop more than 40% of his current year salary and shift that money to a future year making the contract length longer

^ Not allowed under new CBA

You sure? Espn reported it was added, and reported so after the deal was finalized and voted on.

A new "renegotiation and extension" provision allows an existing contract to be renegotiated so the player is paid a smaller amount over a longer period, but the player's salary cannot decrease by more than 40 percent. Renegotiations previously could only increase a player's salary.

http://espn.go.com/nba/story/_/id/73294 ... -agreement

[dockingsched]

from what i understand about the over-36 rule, only the 4th, 5th, 6th yr of a contract and that a player would be over 36 during those yrs start to fall under this rule. since in your scenario it would only be a 3 yr contract, i think its exempt from the over 36 rule, thus the last yr when dirk would be 36 would be treated as a regular contract yr instead of deferred payment that would count against the cap during the 1st two yrs of the deal.

[DBoys]

I understand the new CBA will allow a downward re-structure where a player cannot drop more than 40% of his current year salary and shift that money to a future year making the contract length longer

^ Not allowed under new CBA

You sure? Espn reported it was added, and reported so after the deal was finalized and voted on.

A new "renegotiation and extension" provision allows an existing contract to be renegotiated so the player is paid a smaller amount over a longer period, but the player's salary cannot decrease by more than 40 percent. Renegotiations previously could only increase a player's salary.

http://espn.go.com/nba/story/_/id/73294 ... -agreement

ESPN erred

http://mavericks.scout.com/2/1145100.html

[HartfordWhalers]

You sure? Espn reported it was added, and reported so after the deal was finalized and voted on.

A new "renegotiation and extension" provision allows an existing contract to be renegotiated so the player is paid a smaller amount over a longer period, but the player's salary cannot decrease by more than 40 percent. Renegotiations previously could only increase a player's salary.

http://espn.go.com/nba/story/_/id/73294 ... -agreement

ESPN erred

http://mavericks.scout.com/2/1145100.html

Thanks! I was kind of counting on you to get that answer one way or another, as every time I searched for the exact wording in the CBA, I could never find anything but that Espn take. Now I know why...

[mysticbb]

Now I know why...

Don't be so harsh on ESPN, they likely didn't have the new CBA at hand at that time and relied on informations from some "insider".

It seems like the 40% rule is written in to make a contract like Nick Collison's not possible anymore. If I understand that correctly, in such a case the Collison salary for the 2011/12 couldn't have been lower than 60% of his previous year salary, which would be $7.962m instead of the $3.273m he is now receiving. That also implies that Collison's high salary last season was the result of a renegotiation and not a signing bonus.

Regarding the over 36 rule and Nowitzki: Nowitzki is allowed to sign a two year extension next offseason. This contract counts completely normal against the cap, not as deferred compensation. The CBA explicitly says that qualifying veterans at the age of 33 and 34 can sign 4 yr contracts without being classified as "over 36". Nowitzki will be 34 next summer.

[HartfordWhalers]

Now I know why...

Don't be so harsh on ESPN

Haha. No I was picking more on me then ESPN. I meant it in terms of I kept looking for something that didn't exist, and couldn't understand why I couldn't find it. Back to my day job of photographing Big Foot.