Minimum draft buyout for international players ?

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nico64
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Minimum draft buyout for international players ? 

Post#1 » by nico64 » Tue Aug 6, 2019 7:14 am

Hello

There are many discussions in Europe (in particular in France which has at least one drafted player per year) on the buyouts and I could not find the answer anywhere. I have understood that when a player under a FIBA contract is being drafted, the (European) team CAN receive from the NBA drafting team a buyout which maximum amount is defined in the CBA (725 000$ for the 2019-2020 season to come) - I have also understood that any amount above is due by the player himself

The question I have is : is there a minimum amount that the NBA team must pay ? And if so, is it the same as the maximum amount defined in the CBA? Or any another amount ? cbafaq says that "NBA teams signing international players are allowed to pay a buyout to the player's team" and that "The buyout amount is a matter of negotiation between the player and the international team or organization". I have not found any mention that (a) the buyout is automatically due and (b) that the amount must be (at least) a given amount

When discussing the topic in french forums (note that this buyout may be very important in the budget of a team, here), many posters take for granted that if player X gets drafted, then the buyout will automatically be paid and that the amount will be the one defined as a maximum (if I understand well) in the CBA. So my question is: how automatic is this from the CBA?

Thanks
DBoys
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Re: Minimum draft buyout for international players ? 

Post#2 » by DBoys » Tue Aug 6, 2019 7:25 pm

The short answer -- "Is there a minimum amount that the NBA team must pay?" ....No.

The long answer ...

A buyout is NOT automatic in any way. It is a possibility. It is a negotiation. It may or may not happen.

If a team in another basketball league has a contract with a player, that player must either finish his contract or negotiate a deal with that other team to end the contract (ie, "buy out" the contract), before he can sign a contract to play for the NBA team. When he wants out badly enough, he might be willing to pay. When the NBA team wants him immediately, they might be willing to help pay, to get him quicker. But sometimes, neither of those is the case, so no buyout happens.

The amount of such a buyout itself is an amount determined by his contract with the FIBA team, and then perhaps negotiated between player and that team. For example, if the FIBA team has a contractual buyout of $1,000,000 and one year left on the contract, but knows that if the player waits a year they get $0, they might want to take as much as they can get right now, even if a bit less.

But even if they will take less, it doesn't mean a buyout will happen. It only happens if the player wants out. And often, that is determined by whether the NBA team wants to help (within the limits they have), and then has a large enough contract waiting to make financial sense to jump to the NBA. Obviously he won't do such a buyout unless the NBA team is going to make it worth his while. How "worth my while" is defined is up to him.

From the NBA's standpoint as a league, whatever the NBA team pays is going to be part of their overall payroll expenses to player, and therefore governed by the cap limits and salary limits in the rules. That's mostly an accounting issue for salary cap purposes, but it places limits on what can be paid in certain ways. As you know, to make it easier to attain players who have been playing in other leagues, the NBA allows a certain amount of such buyout money reimbursement to be paid up front and exempt from being counted as part of the cap.

So the situation has layers of relevant issues, some of them being the money itself and whether the player wants to pay it, how much the NBA team will help financially, and then a different layer of the way the cap accounting works. But mostly, it's a negotiation in which multiple parties have to decide if they can come to a financial agreement that makes sense to all of them.
nico64
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Re: Minimum draft buyout for international players ? 

Post#3 » by nico64 » Wed Aug 7, 2019 7:42 am

Thanks a lot for this thorough answer. Clarifies a lot

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