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The Denver Nuggets and Kenneth Faried have agreed upon a reworked contract extension worth $50 million-plus over four seasons.

For the Nuggets and Faried, the paring down of an original five-year, $60 million pact on Sunday night ultimately satisfied both parties.

The fact that five-year deals on rookie extensions are only allowable for maximum contracts ultimately moved the sides toward reconstructing the extension.

The sides found common ground on a $12.5 million annual deal that keeps Faried out of the restricted free-agent market in July 2015.

Via Adrian Wojnarowski/Yahoo! Sports

All started from Bron

The fact that five-year deals on rookie extensions are only allowable for maximum contracts ultimately moved the sides toward reconstructing the extension.

Translated = apparently means that they agreed to an illegal contract that somehow neither Faried's agent nor the Denver front office knew was illegal, and had to alter it.

Love that Denver's FO doesn't understand the CBA.

The59Sound wrote:Love that Denver's FO doesn't understand the CBA.

Or were just hoping the league office would approve it anyway. I think it was 2 years ago when they approved one that violated the rule about not having contracts that reduce in value from year to year.

Billl wrote:

The59Sound wrote:Love that Denver's FO doesn't understand the CBA.

Or were just hoping the league office would approve it anyway. I think it was 2 years ago when they approved one that violated the rule about not having contracts that reduce in value from year to year.

Contracts can reduce in value from year to year. It's called front loading, and it's done a lot.

i505 wrote:

Billl wrote:

The59Sound wrote:Love that Denver's FO doesn't understand the CBA.

Or were just hoping the league office would approve it anyway. I think it was 2 years ago when they approved one that violated the rule about not having contracts that reduce in value from year to year.

Contracts can reduce in value from year to year. It's called front loading, and it's done a lot.

Actually, no. Contracts can't do that. You can have a signing bonus, but even that needs to be slit over the life of the contract.

The reason is pretty simple. If contracts could go down appreciably from year to year, then you could use Bird rights to resign a guy to a contract like 20mil, min salary and create all sorts of cap room for yourself.

Billl wrote:

i505 wrote:

Billl wrote:
Or were just hoping the league office would approve it anyway. I think it was 2 years ago when they approved one that violated the rule about not having contracts that reduce in value from year to year.

Contracts can reduce in value from year to year. It's called front loading, and it's done a lot.

Actually, no. Contracts can't do that. You can have a signing bonus, but even that needs to be slit over the life of the contract.

The reason is pretty simple. If contracts could go down appreciably from year to year, then you could use Bird rights to resign a guy to a contract like 20mil, min salary and create all sorts of cap room for yourself.

Sorry, but you are just wrong on this. It is literally done a lot. Isiah Thomas just recently signed a decreasing contract with the Suns. The Morris bros also both decrease in year 2 of their new extension. The only restriction on declining contracts is the same 4.5 or 7.5 percent max that applies to raises.

See question #55 in the CBA FAQ:

http://www.cbafaq.com/salarycap.htm#Q55

"The raise limit also applies to salary decreases -- for example, since the Larry Bird exception limits raises to 7.5% of the first-year salary, the salary may also decrease by up to 7.5% of the first-year salary."

i505 wrote:

Billl wrote:

i505 wrote:
Contracts can reduce in value from year to year. It's called front loading, and it's done a lot.

Actually, no. Contracts can't do that. You can have a signing bonus, but even that needs to be slit over the life of the contract.

The reason is pretty simple. If contracts could go down appreciably from year to year, then you could use Bird rights to resign a guy to a contract like 20mil, min salary and create all sorts of cap room for yourself.

Sorry, but you are just wrong on this. It is literally done a lot. Isiah Thomas just recently signed a decreasing contract with the Suns. The Morris bros also both decrease in year 2 of their new extension. The only restriction on declining contracts is the same 4.5 or 7.5 percent max that applies to raises.

See question #55 in the CBA FAQ:

http://www.cbafaq.com/salarycap.htm#Q55

"The raise limit also applies to salary decreases -- for example, since the Larry Bird exception limits raises to 7.5% of the first-year salary, the salary may also decrease by up to 7.5% of the first-year salary."

Yes, it's limited to a very small decrease - just like the increase. You can't just go from 10mil to 9mil to 8mil etc Contracts have to be essentially flat. You can't frontload or back-load them in any meaningful way to avoid either current or future cap issues. My point was that the league missed that on a contract a year or 2 ago and approved one that had real declines. The team and agent and the player all signed off on it and the league approved it. It only came out months later that the league didn't follow its own rule. The league didn't void the contract or penalize anyone involved. Their inaction opened the door for teams and agents to try to sneak through a contract like this. The team and the player both wanted the 5 year option, so why not send it to the league and hope they don't notice?

Billl wrote:

i505 wrote:

Billl wrote:
Actually, no. Contracts can't do that. You can have a signing bonus, but even that needs to be slit over the life of the contract.

The reason is pretty simple. If contracts could go down appreciably from year to year, then you could use Bird rights to resign a guy to a contract like 20mil, min salary and create all sorts of cap room for yourself.

Sorry, but you are just wrong on this. It is literally done a lot. Isiah Thomas just recently signed a decreasing contract with the Suns. The Morris bros also both decrease in year 2 of their new extension. The only restriction on declining contracts is the same 4.5 or 7.5 percent max that applies to raises.

See question #55 in the CBA FAQ:

http://www.cbafaq.com/salarycap.htm#Q55

"The raise limit also applies to salary decreases -- for example, since the Larry Bird exception limits raises to 7.5% of the first-year salary, the salary may also decrease by up to 7.5% of the first-year salary."

Yes, it's limited to a very small decrease - just like the increase. You can't just go from 10mil to 9mil to 8mil etc Contracts have to be essentially flat. You can't frontload or back-load them in any meaningful way to avoid either current or future cap issues. My point was that the league missed that on a contract a year or 2 ago and approved one that had real declines. The team and agent and the player all signed off on it and the league approved it. It only came out months later that the league didn't follow its own rule. The league didn't void the contract or penalize anyone involved. Their inaction opened the door for teams and agents to try to sneak through a contract like this. The team and the player both wanted the 5 year option, so why not send it to the league and hope they don't notice?

Your original post said you can't have contracts reduce from year to year, when that is legal and it does happen. But it is subject to the same restrictions as increasing contracts.

What contract are you referring to? I don't remember hearing about this and can't seem to find anything in a quick search.

Phystic wrote:

Billl wrote:

i505 wrote:
Sorry, but you are just wrong on this. It is literally done a lot. Isiah Thomas just recently signed a decreasing contract with the Suns. The Morris bros also both decrease in year 2 of their new extension. The only restriction on declining contracts is the same 4.5 or 7.5 percent max that applies to raises.

See question #55 in the CBA FAQ:

http://www.cbafaq.com/salarycap.htm#Q55

"The raise limit also applies to salary decreases -- for example, since the Larry Bird exception limits raises to 7.5% of the first-year salary, the salary may also decrease by up to 7.5% of the first-year salary."

Yes, it's limited to a very small decrease - just like the increase. You can't just go from 10mil to 9mil to 8mil etc Contracts have to be essentially flat. You can't frontload or back-load them in any meaningful way to avoid either current or future cap issues. My point was that the league missed that on a contract a year or 2 ago and approved one that had real declines. The team and agent and the player all signed off on it and the league approved it. It only came out months later that the league didn't follow its own rule. The league didn't void the contract or penalize anyone involved. Their inaction opened the door for teams and agents to try to sneak through a contract like this. The team and the player both wanted the 5 year option, so why not send it to the league and hope they don't notice?

Your original post said you can't have contracts reduce from year to year, when that is legal and it does happen. But it is subject to the same restrictions as increasing contracts.

What contract are you referring to? I don't remember hearing about this and can't seem to find anything in a quick search.

I also don't remember this happening, so would be interested to know who was involved in this.

Billl wrote:...the rule about not having contracts that reduce in value from year to year.

...

Billl wrote:Actually, no. Contracts can't do that. You can have a signing bonus, but even that needs to be slit over the life of the contract.

...

Billl wrote:Yes, it's limited to a very small decrease...

Uhm. Ok then.