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I have a question i have been lurking for a while. I Have seen quite a few NYK fans saying they could Poison pill Clarkson contract. I dont see how the Lakers could not just match it and keep the terms that the knicks wanted to if they Lakers wanted to. The Lakers can match the Max and still have a lot of Cap place can someone explain to me how this "posion pill" will work.

Kirito wrote:I have a question i have been lurking for a while. I Have seen quite a few NYK fans saying they could Poison pill Clarkson contract. I dont see how the Lakers could not just match it and keep the terms that the knicks wanted to if they Lakers wanted to. The Lakers can match the Max and still have a lot of Cap place can someone explain to me how this "posion pill" will work.

So the term Poison Pill actually isn't a real thing in the CBA. It is a media created term and it gets used for two different things.

1. The more accurate way of using it is to describe what happens to a player who signs an extension, but still has this year to play out on his Rookie Scale deal. For example, Jonas Valanciunas this season. He played 2015-2016 on the 4th year of his Rookie Scale deal at ~$4.6 million. But because he already signed an extension, if he was to be traded the incoming value of his deal is the average of that last Rookie Scale year and all the years of his extension. In this case, for trade purposes his salary is not $4.6 million it was ~$13.7 million. For Toronto, the salary out still remains his real amount of $4.6.

Basically, it makes it more difficult to sign a guy to an extension and then turn around and trade him, by making it harder for teams to match salary.

2. This example of Poison Pill is what the people you are talking about are referencing. Clarkson is a RFA, but he's subject to the Arenas Rule. What that means is as a RFA with 2 years or less of experience, other teams are limited in how they can make him an offer sheet.

It gets really complicated, but I'm going to explain it in the easiest way possible. If you want the exact explanation hit the CBA FAQ Q. 45.

Basically, the new team gives the player an offer sheet for 3 or 4 years. For the new team it is structured as the total value/years. So, to keep it simple, If the total value of the deal was $21 million for 3 years, the cap hit for the new team is $7 million per season.

If the original team matches, their cap hit is spread different. They match with the first year up to the Non-Taxpayer MLE, the second year as a 4.5% raise. And then the remainder is put in the final year.

So, the signing team gets a break by spreading the cap hit even. The original team gets a break by being able to match the offer, but they take a "penalty" with the huge jump in year 3.

It was basically designed because a team who picked a player and developed him could have lost him because they couldn't get the necessary space to match the offer sheet. It is called the Arenas Provision because this is what happened when the Wizards signed Arenas away from the Warriors.

It can be really confusing and I recommend you read the FAQ on both topics here:

Example 1: http://www.cbafaq.com/salarycap.htm#Q90

Example 2: http://www.cbafaq.com/salarycap.htm#Q45

Oh, and the Lakers absolutely can match on Clarkson with no worries at all. Whoever is saying they can't is wrong. It would just be structured differently in terms of cap hit for both sides.

Smitty731 wrote:

Kirito wrote:I have a question i have been lurking for a while. I Have seen quite a few NYK fans saying they could Poison pill Clarkson contract. I dont see how the Lakers could not just match it and keep the terms that the knicks wanted to if they Lakers wanted to. The Lakers can match the Max and still have a lot of Cap place can someone explain to me how this "posion pill" will work.

So the term Poison Pill actually isn't a real thing in the CBA. It is a media created term and it gets used for two different things.

1. The more accurate way of using it is to describe what happens to a player who signs an extension, but still has this year to play out on his Rookie Scale deal. For example, Jonas Valanciunas this season. He played 2015-2016 on the 4th year of his Rookie Scale deal at ~$4.6 million. But because he already signed an extension, if he was to be traded the incoming value of his deal is the average of that last Rookie Scale year and all the years of his extension. In this case, for trade purposes his salary is not $4.6 million it was ~$13.7 million. For Toronto, the salary out still remains his real amount of $4.6.

Basically, it makes it more difficult to sign a guy to an extension and then turn around and trade him, by making it harder for teams to match salary.

2. This example of Poison Pill is what the people you are talking about are referencing. Clarkson is a RFA, but he's subject to the Arenas Rule. What that means is as a RFA with 2 years or less of experience, other teams are limited in how they can make him an offer sheet.

It gets really complicated, but I'm going to explain it in the easiest way possible. If you want the exact explanation hit the CBA FAQ Q. 45.

Basically, the new team gives the player an offer sheet for 3 or 4 years. For the new team it is structured as the total value/years. So, to keep it simple, If the total value of the deal was $21 million for 3 years, the cap hit for the new team is $7 million per season.

If the original team matches, their cap hit is spread different. They match with the first year up to the Non-Taxpayer MLE, the second year as a 4.5% raise. And then the remainder is put in the final year.

So, the signing team gets a break by spreading the cap hit even. The original team gets a break by being able to match the offer, but they take a "penalty" with the huge jump in year 3.

It was basically designed because a team who picked a player and developed him could have lost him because they couldn't get the necessary space to match the offer sheet. It is called the Arenas Provision because this is what happened when the Wizards signed Arenas away from the Warriors.

It can be really confusing and I recommend you read the FAQ on both topics here:

Example 1: http://www.cbafaq.com/salarycap.htm#Q90

Example 2: http://www.cbafaq.com/salarycap.htm#Q45

Ok its what i thought in example 2 they clearly state they could just use there real cap space to match. So the Lakers could a Match with pure cap space and get him for 8 Mil a year or b match with the MLE and take a huge hit in 2 years... I think 2 years from now is better =b

I would add some comments:
1 The term "poison pill" is used generally for situations in which the contract/payout is a certain amount, but the cap hit may be another, for CBA reasons.
2 In the situation described in OP, we have to understand that this situation (called the Arenas Rule) ONLY comes into play if a team wants to make an offer that exceeds the Non-Taxpayer MLE of 5.7M or so. If the player signs an offer for less than that, the Arenas rule is inapplicable.
3 But if they want to offer more than that, the contract offer sheet must be for at least 3 years, and must be structured as follows:
MLE,
MLE+4.5%,
a big jump to more than another 4.5% raise (could be up to 2016 max, if desired),
then a 4th yr is possible for "yr 3 amount +/- 4.5%"
4 For the team making the offer, the cap hit (in each yr) would be the average salary.
5 For a team matching the offer, the cap hit will be whatever the contract is, each year. So cap hit in yr 1 will be MLE, and in yrs 3 and 4 may be huge.
6 Regardless of whether the deal is matched or not, the player gets paid per the contract offer sheet.
7 If the player is traded at a later time, somewhere months or years down the road, the cap hit will be as determined originally (ie, it will continue to be one way if it was matched, and a different way if it was not).

To possibly give a little context, this exact situation played out with Jeremy Lin and Omer Asik a few years back. They were both Arenas RFAs and the Rockets gave them both deals. Their then current teams (NY and CHI) chose not to match, and the Rockets got both players for an average cap hit of around $8 million.

But as DBoys said, they were paid by the terms of the offer sheet. So, their deals were something along the lines of $5 million, $5 million, $15 million in actual money. Tons, and I mean TONS, was written incorrectly about how if they were traded, the acquiring team would have a cap hit of $15 million in the last year. The cap hit would not adjust from the $8 million, but the acquiring team would have been on the hook to pay $15 million in actual dollars.

Again, a little confusing potentially, but thought the real world example might help with context.