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John Hollinger has written an article stating that because the Nets apparently used the non-taxpayer MLE (NTP MLE) to sign Teletovic that they have mathematically excluded themselves from the possibility of trading for Dwight Howard due to the hard cap that is created for teams that use the NTP MLE.

I wanted to get everyone's thoughts here because its not clear to me that the hard cap for the NTP MLE works as sensibly as one might think. Mods: Just to clarify, I am not replicating an ESPN Insider article below. What follows is my own calculation.

Taking all the signings to date, the Nets have $53,589,878 under contract for 2012-13:

Williams $17,177,193
Wallace $8,900,000
Evans $1,600,000
Teletovic $5,000,000
Johnson $19,752,645
Brooks $1,160,040

The Nets also have cap holds of:
Humphries $12,000,000
Lopez $7,692,458
Green $854,389
Three slots $1,420,812

Thus, the Nets have a salary figure at the moment of $75,557,537.

Generally, my understanding is teams that use the NTP MLE must not go above the "apron" which is the luxury tax threshold + $4 million.
http://www.cbafaq.com/salarycap.htm#Q25

For some reason, Hollinger thinks the apron is $74,307,000 for 2012-13. I did not think the salary cap and luxury tax lines have been set yet so I wasn't sure where this number was coming from. However, assuming Hollinger's number is correct he asserts the Nets have a problem.

A team can go above the apron when adding cap holds to their salary cap figure because cap holds are not considered salary when determining whether the NTP MLE is available. http://www.cbafaq.com/salarycap.htm#Q14

If the Nets trade Humphries, Lopez, and Brooks to the Magic for Howard then they'd be trading $20,546,847 in salaries (i.e., their current cap holds) and taking back $19,536,360 (Howard's 2012-13 salary). When you factor in five cap holds for five open roster slots that is another $947,208 (recall they already had three open slots so you are just adding salary for the extra two slots). That puts the Nets at $74,073,446.

I think there are discrepancies in Hollinger's math. Can someone spot where I've made an error?

Nanogeek wrote:http://insider.espn.go.com/nba/story/_/id/8128257/nba-do-not-bet-dwight-howard-brooklyn

John Hollinger has written an article stating that because the Nets apparently used the non-taxpayer MLE (NTP MLE) to sign Teletovic that they have mathematically excluded themselves from the possibility of trading for Dwight Howard due to the hard cap that is created for teams that use the NTP MLE.

I wanted to get everyone's thoughts here because its not clear to me that the hard cap for the NTP MLE works as sensibly as one might think. Mods: Just to clarify, I am not replicating an ESPN Insider article below. What follows is my own calculation.

Taking all the signings to date, the Nets have $53,589,878 under contract for 2012-13:

Williams $17,177,193
Wallace $8,900,000
Evans $1,600,000
Teletovic $5,000,000
Johnson $19,752,645
Brooks $1,160,040

The Nets also have cap holds of:
Humphries $12,000,000
Lopez $7,692,458
Green $854,389
Three slots $1,420,812

Thus, the Nets have a salary figure at the moment of $75,557,537.

Generally, my understanding is teams that use the NTP MLE must not go above the "apron" which is the luxury tax threshold + $4 million.
http://www.cbafaq.com/salarycap.htm#Q25

For some reason, Hollinger thinks the apron is $74,307,000 for 2012-13. I did not think the salary cap and luxury tax lines have been set yet so I wasn't sure where this number was coming from. However, assuming Hollinger's number is correct he asserts the Nets have a problem.

A team can go above the apron when adding cap holds to their salary cap figure because cap holds are not considered salary when determining whether the NTP MLE is available. http://www.cbafaq.com/salarycap.htm#Q14

If the Nets trade Humphries, Lopez, and Brooks to the Magic for Howard then they'd be trading $20,546,847 in salaries (i.e., their current cap holds) and taking back $19,536,360 (Howard's 2012-13 salary). When you factor in five cap holds for five open roster slots that is another $947,208. That puts the Nets at $74,073,446.

I think there are discrepancies in Hollinger's math. Can someone spot where I've made an error?

There are multiple reasons:

You're not trading the capholds but the salary that they get. But if you're over the cap and you give a bird agent a raise of more then 20% then his byc-status kicks in, and only 50% of his salary counts as outgoing.

So the Nets would have to send out equivalent salary to 19.5M (they can't take in more salary then they send out since they're over the apron)

Humphries 9.6 (max 9.6 or his outgoing salary would be halved)
Brooks 1.2
Lopez 17.4 (since only 50% counts as outgoing so 8.7M)

As you can see one problem is the contract for Lopez, it would be higher then the max.

Also since both Orlando and Brooklyn are over the cap Orlando couldn't take on the salaries in this example since it's too much money for them.

Oh and the Apron from Hollinger? That's the contractually guaranteed minimum. Some sources claim that the cap (and with it the Lux and Apron) might rise, but I'd say its unlikely since the season is 16 regular season games shorter and the cap is in relation to the total revenue.

I understand they'd be trading the actual salaries Lopez, Humphries, etc. agreed to but I'm focused on what the Nets salary figure is after a Howard trade. So I don't think I care how much salary the outgoing players get but rather the salary Howard receives in 2012-13. I just reduced the Nets salary figure by the cap holds of the outgoing players. My point is the Nets aren't over $74.3m after a Howard trade so Hollinger's assertion appears to be incorrect.

Nanogeek wrote:I understand they'd be trading the actual salaries Lopez, Humphries, etc. agreed to but I'm focused on what the Nets salary figure is after a Howard trade. So I don't think I care how much salary the outgoing players get but rather the salary Howard receives in 2012-13. I just reduced the Nets salary figure by the cap holds of the outgoing players. My point is the Nets aren't over $74.3m after a Howard trade so Hollinger's assertion appears to be incorrect.

Well the salaries have to be within 125% so it does matter. And if you're capped out then Lopez becomes a BYC-Player effectively making this trade impossible.

gelek wrote:

Nanogeek wrote:I understand they'd be trading the actual salaries Lopez, Humphries, etc. agreed to but I'm focused on what the Nets salary figure is after a Howard trade. So I don't think I care how much salary the outgoing players get but rather the salary Howard receives in 2012-13. I just reduced the Nets salary figure by the cap holds of the outgoing players. My point is the Nets aren't over $74.3m after a Howard trade so Hollinger's assertion appears to be incorrect.

Well the salaries have to be within 125% so it does matter. And if you're capped out then Lopez becomes a BYC-Player effectively making this trade impossible.

BYC was removed in the new CBA. Yes, the Nets can only count 50% of Lopez new salary but when you add that to an expected Humphries deal + Brooks salary a trade can be done. The issue is not about matching salaries for a Howard trade but rather has to do with whether the Nets are under the hard cap or not if they use the NTP MLE.

Nanogeek wrote:http://insider.espn.go.com/nba/story/_/id/8128257/nba-do-not-bet-dwight-howard-brooklyn


A team can go above the apron when adding cap holds to their salary cap figure because cap holds are not considered salary when determining whether the NTP MLE is available. http://www.cbafaq.com/salarycap.htm#Q14

I think you're confusing capholds and roster charges. What is true is that capholds (e.g. the 12M for Humphries right now) don't count towards the salary cap in regards to the cap calculation of the apron. In fact you will find a lot of teams have capholds of players still on their books that are a couple of years old since they don't cost anything. Dallas once even used KvHorn a couple of years after his retirement in a S&T to make salaries match. BUT if you're over the apron and you have capholds that are still active then you can't just sign those players because their salary would be added over the apron.

I'm starting to think that maybe Teletovic doesn't get the Full MLE but rather the "Full TaxpayerMLE"? Because that would solve the problems in regards to cap.



But the roster charges (the "capholds" of unused roster slots) do count against the cap. Furthermore this:


[quote= "www.cbafaq.com"]
once a team uses its Non-Taxpayer Mid-Level exception, the apron effectively becomes a hard cap for the remainder of that season

If the apron becomes a team's hard cap, it cannot exceed the apron under any circumstance. If the team subsequently needs to sign a player (for example, to replace injured players) it must first create room under the apron by waiving player(s) with non-guaranteed salary, waiving player(s) with guaranteed salary and utilizing the stretch provision, trading downward in salary, etc.

If the apron becomes a team's hard cap, it cannot exceed the apron under any circumstance. If the team subsequently needs to sign a player (for example, to replace injured players) it must first create room under the apron by waiving player(s) with non-guaranteed salary, waiving player(s) with guaranteed salary and utilizing the stretch provision, trading downward in salary, etc. [/quote]

So if you're numbers are correct then the nets would have to renounce Humphries or Lopez before signing Deron/Crash or trading for Joe.

So I'm checking my own math and found some discrepancies so I'm going to rebuild the calc.

After a Howard trade with Teletovic signing for $5m the Nets salaries would be as follows:

Williams $17,177,193
Wallace $8,900,000
Evans $1,600,000
Teletovic $5,000,000
Johnson $19,752,645
Green $854,389 (cap hold)
Howard $19,536,360
Roster Slot $473,604
Roster Slot $473,604
Roster Slot $473,604
Roster Slot $473,604
Roster Slot $473,604

That puts the Nets at $75,188,877.

The simple solution is either include Green in a trade to the Nets or renouce your rights to him. That puts the Nets at $74,334,488.

The balance of $34,488 can be made up by signing Deron to a bit less than the maximum which I'm sure he'd be happy to do to get Howard in town.

Alternatively, Teletovic could take the TP MLE ($3m) or take the NTP MLE but not take the entire NTP MLE but give back just enough so the Nets would be below the hard cap.

In any event, seems a bit histrionic for Hollinger to conclude the Nets are completely out of the running to get Howard in a trade this offseason.

Coon just confirmed Teletovic signed for $3.09m NTP MLE so Nets can go above apron.

BYC still applies to sign and trades, which Lopez and Humphries would be,

Sham wrote:BYC still applies to sign and trades, which Lopez and Humphries would be,

Yes but would only apply to Lopez presumably since Humphries won't get a big raise.