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Let's say a team owes a player 10M this year and 10M next year. The player is run over by a bus and killed. It's the bus driver's fault. I would assume that the team owes the player's estate $20M. Can the money be stretched for cap purposes?

Curmudgeon wrote:Let's say a team owes a player 10M this year and 10M next year. The player is run over by a bus and killed. It's the bus driver's fault. I would assume that the team owes the player's estate $20M. Can the money be stretched for cap purposes?

Yes, if owed, the team might opt to cap-stretch next year's 10M. Or it might not. But ....

"I would assume that the team owes the player's estate $20M."

Just as an aside, you assume the contract is guaranteed "in the event of death" (in which case, the team is paying but will not be receiving any service from the player). That could be true, but it is not necessarily true. Contracts are not automatically guaranteed in event of death, even if they are g'teed in other ways. It is its own specification (or not).

Also, there are other ways to provide a death benefit, such as a life insurance policy paid by team. Or one paid by player, of course.

The reason I asked the question is that some interpretations of the stretch provision that I've read require the player to be waived first, which is not possible if the player is dead. I understand that the team might buy life insurance on a player--just as corporations purchase "key man" insurance on top executives-- but I would assume that life insurance purchased separately by the player would have no bearing on the issue of how the club handles its payment obligations going forward.

Curmudgeon wrote:The reason I asked the question is that some interpretations of the stretch provision that I've read require the player to be waived first, which is not possible if the player is dead.

"some interpretations of the stretch provision that I've read require the player to be waived first"

This is indeed correct. The cap stretch is always preceded by a waiver of the contract, after which the team has a window in which to specify a stretch of the cap hit (if allowed, and if desired).

"which is not possible if the player is dead"

The rules specify that the way to remove a player from the team roster is the waiver process, so I believe that a waiver would indeed be required and would occur in the event of death, as odd as that may seem. Think of it as a completion of the paperwork or process, if you need to. Obviously in the event of death, a waiver claim will not ever occur, but the process itself is always mandated.

And your question offers one explanation as to why the process must still happen - for a determination of whether the team wishes to stretch the contract hit (in certain situations). There may be other decisions that have to be made too, so the completion of the process forces them to be done just like with any other contractual severance..

Curmudgeon wrote:Let's say a team owes a player 10M this year and 10M next year. The player is run over by a bus and killed. It's the bus driver's fault. I would assume that the team owes the player's estate $20M. Can the money be stretched for cap purposes?

The way I understand it, there would be no "stretching" required. The player's cap space is immediately cleared. The remainder of the contract is paid to player's family by the insurance. All contracts are insured against disability and death. Even Bosh's contract didn't count against the cap and the insurance paid for part of the contract.

J_T wrote:

Curmudgeon wrote:Let's say a team owes a player 10M this year and 10M next year. The player is run over by a bus and killed. It's the bus driver's fault. I would assume that the team owes the player's estate $20M. Can the money be stretched for cap purposes?

The way I understand it, there would be no "stretching" required. The player's cap space is immediately cleared. The remainder of the contract is paid to player's family by the insurance. All contracts are insured against disability and death. Even Bosh's contract didn't count against the cap and the insurance paid for part of the contract.

The CBA is a legally binding agreement between players and teams. Much of what you said here is explicitly contrary to the CBA. You can assume the teams ignore the CBA and do it their own way, to their own potential detriment and peril. I do not.

The question asked was about cap hits in the situation cited, and I addressed what was asked. DEPENDING ON THE SPECIFICS OF THE SITUATION AND CONTRACT, yes there are other alternatives that could come into play, or maybe not. There may (or may not) be insurance that may (or may not) have an impact. There may (or may not) be guarantees that may (or may not) apply. Besides a waiver and possible stretch, there are multiple cap rules potentially at play, depending, that may (or may not) be applied to the situation.

As for Bosh, his situation was resolved per the CBA, and his contract was handled by its defined process (which is complex). And the fact that it was resolved eventually in the manner it was, does not make it a template for all other contracts and situations.

DBoys wrote:

J_T wrote:

Curmudgeon wrote:Let's say a team owes a player 10M this year and 10M next year. The player is run over by a bus and killed. It's the bus driver's fault. I would assume that the team owes the player's estate $20M. Can the money be stretched for cap purposes?

The way I understand it, there would be no "stretching" required. The player's cap space is immediately cleared. The remainder of the contract is paid to player's family by the insurance. All contracts are insured against disability and death. Even Bosh's contract didn't count against the cap and the insurance paid for part of the contract.

The CBA is a legally binding agreement between players and teams. Much of what you said here is explicitly contrary to the CBA. You can assume the teams ignore the CBA and do it their own way, to their own potential detriment and peril. I do not.

The question asked was about cap hits in the situation cited, and I addressed what was asked. DEPENDING ON THE SPECIFICS OF THE SITUATION AND CONTRACT, yes there are other alternatives that could come into play, or maybe not. There may (or may not) be insurance that may (or may not) have an impact. There may (or may not) be guarantees that may (or may not) apply. Besides a waiver and possible stretch, there are multiple cap rules potentially at play, depending, that may (or may not) be applied to the situation.

As for Bosh, his situation was resolved per the CBA, and his contract was handled by its defined process (which is complex). And the fact that it was resolved eventually in the manner it was, does not make it a template for all other contracts and situations.

You are making it way too complicated. If a player died what would happen afterwards is exactly what I wrote. No if's, but's, may or may not's. All contracts are insured and they are insured for a reason. If a player dies, the insurance kicks in. The insurance contract is also a legally binding document.

The insurance is irrelevant. The player can be stretched whether or not the contract is insured. If the player is owed $20M over two years and the contract is guaranteed, he gets all his money in two years, whether it is coming out of the owner's pocket or the insurance company's. Stretching is an artifact of the salary cap.

LOL, if a dead player can be waived, my issue goes away. But suppose the team doesn't waive him. Does he stay on the roster? Does he count for purposes of computing the league-wide 14-player roster minimum?

Curmudgeon wrote:The insurance is irrelevant. The player can be stretched whether or not the contract is insured. If the player is owed $20M over two years and the contract is guaranteed, he gets all his money in two years, whether it is coming out of the owner's pocket or the insurance company's. Stretching is an artifact of the salary cap.

LOL, if a dead player can be waived, my issue goes away. But suppose the team doesn't waive him. Does he stay on the roster? Does he count for purposes of computing the league-wide 14-player roster minimum?

Possibly may fall under disabled player exception type status.

Chill Draymond it don’t gotta go that far

only if rigor mortis hasn't set in

Wouldn't death more likely result in a medical exemption for a career ending injury and removal from the cap, with full payment of the contract?

flipside21 wrote:Wouldn't death more likely result in a medical exemption for a career ending injury and removal from the cap, with full payment of the contract?

You bring in several issues to a case, 1) career ending injury or death, cap situation and full payment of the contract.

As for full payment, it is usually covered by insurance as teams are required to buy it. A team may have to pay a smaller portion as out-of-pocket expenses. If it's a career ending injury and cause of death, then the team would have to show how death was caused by the injury as part of the insurance company paying. Otherwise, death is a normal part of life even if the player was young; He could have died in a car accident. The NBA has changed its CBA to account for this though to settle injury and non-responsible cause of death. The cap situation is cleared for the team. I think it's cleared even if the player died in a car accident caused by DUI, but the insurance probably would not not pay off the remainder of the contract.

"17. Are there exceptions to the salary cap?

...

DISABLED PLAYER EXCEPTION -- This exception allows a team which is over the cap to acquire a replacement for a disabled player who will be out for the remainder of the season. This exception can also be granted in the event of a player's death. This exception can only be used to acquire one player. The maximum salary for the replacement player is 50% of the injured player's salary, or the average salary, whichever is less (see question number 22 for the definition of "average salary"). Approval from the league (based on a determination by an NBA-designated physician) is required for this exception to be used. This exception can be used to sign a free agent, or to create room to accept a salary in trade. When used for trade, it is treated in a similar fashion to the traded player exception (see question number 68 ). If a team is under the salary cap by more than the combined amount of their exceptions, or drops below the cap by more than the combined amount of their exceptions after receiving this exception, then they lose this exception. If a team is under the salary cap and has this exception available to use, then it is included in their team salary.

If a player is disabled between July 1 and November 30, the team must acquire the replacement player within 45 days. If the player is disabled between December 1 and June 30, and the physician determines that the player will be out the entire following season as well, then the team has until October 1 to sign a replacement. If the disabled player comes back sooner than expected, then he may be activated immediately, and the replacement player (or exception, if it hasn't been used yet) is not affected.

Teams sometimes have had difficulty getting the NBA to approve an injury exception. For example, Danny Manning tore an ACL toward the end of the 97-98 season, yet the NBA would not approve the Suns for an injury exception. More recently, the Magic did not receive this exception in 2003 for Grant Hill. However, this exception was granted in the 1999 offseason to San Antonio, so they could replace Sean Elliott, who was disabled due to kidney problems. This exception was also granted to Charlotte soon after Bobby Phills was killed. A vote of the NBA Board of Governors is actually required for this exception to be granted. Also see question number 18 for more information on the availability and use of this exception.

Don't confuse this exception with the salary cap relief teams can apply for two years after losing a player to a career-ending injury or death (see question number 51 ). This exception allows a team to acquire a replacement player. The salary cap relief removes a contract from the books."

"56. How do players who die while under contract (Reggie Lewis, Drazen Petrovic, Nick Vanos, Bobby Phills) count against the cap?

A player who dies or who suffers a career-ending injury or illness, and whose contract is terminated, may be excluded from his team's team salary. If the death, injury, or illness occurs between July 1 and December 31, the salary can be excluded beginning on the second July 1 following the death, injury, or illness. If the termination occurs between January 1 and June 30, the salary can be excluded beginning two years after the death, injury, or illness. However, a team may decide not to terminate the contract and continue to pay the player. For example, the Lakers continued to pay Magic Johnson after he was forced to retire because of his HIV status, so his salary was included in the Lakers' team salary.

Teams do not receive an exception to acquire a replacement player if a player's contract is terminated for medical reasons. However, a disabled player exception (see question number 17 ) may be granted by the league in the event of a player's death. For example, the league granted Charlotte a disabled player exception when Bobby Phills died, and Charotte used this exception to acquire Dale Ellis. "

http://www.cbafaq.com/salarycap99.htm#48

flipside21 wrote:Wouldn't death more likely result in a medical exemption for a career ending injury and removal from the cap, with full payment of the contract?

1 Note: Everything in the preceding post to this one is about 15 years out of date. It pertains to 3 CBAs ago, not the current one.

2 The "insurance" issue is not relevant to the discussion of cap consequences. Insurance is a way for the team to get reimbursed in certain situations, but the cap is about salary paid, which will be accounted for on a team's cap UNLESS there is a workaround in some rule or another that the situation meets. "Player death" is not a special category with its own rules, but rather creates choices as to which rule a team might want to use, to cope with the cap.

3 Note: "Guaranteed in event of death" may be common (I wouldn't know, since I don't have access to seeing the contracts) but it is an option, not part of a base contract.

4 There is no "immediate removal from the cap" possible for salary that gets paid to a player who has just "left" the team (ie he was waived), even if due to death. It's a web of rules and choices; player death can land a team in several places, depending on what they pick and the details of the situation.

5 If a team chooses, there can be cap relief later under the "career-ending retirement/waiver" but it will be at least 365 days before it can begin to take effect, and may be longer. Application of a "stretch" to future cap accounting when going this route would be a possible choice. The money paid will always be paid as if was stretched, regardless.

6 But ....The ability to sign a replacement player (the disabled player exception) can be possible right away, but going that route negates any possibility of the "career-ending retirement/waiver" which is required to get future salary erased from the cap accounting.