Bumped the old thread as I haven't had nearly enough coffee to copy paste, but its 5/145 with the last year gtd 12 of 39; so that 145 number is not the full contract but is already including cutting him with 12m in dead money the last year.
It is possible MPJ is back in a few days and all this can be ignored but as far as the general implications of a severe injury that might be career threatening, here is a summary and lots of quotes and links from cbafaq for those interested.
My quick short summary would be if he reaches a point that he cannot play again, Denver's owners are going to be paying a ton of money. However, the salary cap aspects can go away if it is indeed clear enough that the team was willing to cut MPJ and medical professionals felt confident it was career ending. So Denver would be hamstrung by a loss of a talented player, and perhaps by owners willingness to spend more, but not by the cap. There is of course the much messier, where he can play some, then regresses going forward and Denver needs to just ride the injury waves. And I'm going to repeat, or he could be healthy and playing in a week.
But for those wondering on different aspects of it:1) Insurance
NBA insurance is pretty well detailed here:http://www.cbafaq.com/salarycap.htm#Q73
If an insured player is disabled, there is a 41 game waiting period, after which the insurance company pays 80% of the covered salary, which includes current and deferred compensation, and any signing bonus and incentive compensation that can be earned prior to the start of the regular season. The maximum covered salary is $28,187,500, or $275,000 per regular game. The maximum coverage for any one player is six seasons (451 games after the waiting period).
So, just following the assumptions that MPJ is covered, and I assume that 28m is indexed to go up, but roughly 80% would be around 115m in coverage, and 30m or so not paid.
However, I would extremely doubt that the contract is insured:
The carrier has the right to exclude up to 14 players per season, with a maximum of six players per season excluded due to sickness (there are specific exceptions and sublimits to these exclusions). One example is when they excluded Luol Deng in 2008-09 because he had $71 million remaining on his contract and a history of back injuries. The list of excluded players changes each year, so a player who is not covered one season might be covered the following season. However, once a player is covered the carrier can't exclude the player for the remainder of his current contract.
MPJ would be the first contract I would pick as an insurance company to exclude. For those wondering on Embiid's deal, there was specific clauses in the deal that mentioned a reoccurring injury and even then he got over half the deal anyway. We haven't seen any reports of this again, and I'm strongly guessing we would have by now if it was in there.
Sometimes team owners claim to also buy private insurance not through the NBA, although I wouldn't imagine I would want to be a company offering insurance on MPJ and including his known back issues, so I think that is pretty unlikely.
And even if insurance did pay some of MPJ contract, that wouldn't alter the cap hit implications of the contract going forward. However:
2) Cap hit: *Waived* and Medically retired
As for the cap hit, there are a couple of aspects. The first is if the team decides he can never play again and fully commits to that by waiving him. In that case after a year the salary can be removed from the salary cap. (It is still paid). This is probably the most relevant to most people on here, as it sets up that Denver wouldn't get that cap space next offseason, but could have it even by December 15, 2022 in theory if the worst case was true.
This is when a player suffers a career-ending injury or illness. The team must waive the player, and can apply for this salary exclusion following a waiting period. Only the player's team at the time the injury or illness was discovered (or reasonably should have been discovered) can apply for this salary exclusion.
The team can apply to have the player's salary excluded starting on the first anniversary of the player's last regular season
Note that this medical retired requires a panel of experts to say he cannot play again, but does not require the player to agree to the findings, and we have had players medically retired who have tried to come back. And if they do sufficiently (25 games) Denver is back on the hook for the contract *at that point*. That could really screw over a team, because you are talking about an unexpected 30-40m cap hit out of the blue.3) Cap hit: Disabled Player Exception
Basically, for every single season MPJ might be out and it can be ruled that he will be out that season by a panel, Denver will get an exception.
For this season it would be 50% of MPJ salary so half of $3,550,800 or a ~1.8m exception. It is almost irrelevant
Going forward it would be bounded by the Non-Taxpayer Mid-Level exception plus $100,000
However, it is worth noting that any exception use is dependent on
a) have MPJ ruled out for the season and
b) not waived him yet.
It also has 2 big features:
a) Must be expiring
b) Counts against free cap room, add to lux tax etc.
If this exception is granted, the team can acquire one player via free agent signing, trade or waiver claim, to replace the disabled player:
The team may sign a free agent for one season only, for 50% of the disabled player's salary or the amount of the Non-Taxpayer Mid-Level exception, whichever is less.
The team may trade for a player in the last season of his contract only (including any option years)2, who is making no more than 50% plus $100,000 of the disabled player's salary, or the amount of the Non-Taxpayer Mid-Level exception plus $100,000, whichever is less.
The team may claim a player on waivers who is in the last season of his contract only (including any option years), who is making no more than 50% of the disabled player's salary, or the amount of the Non-Taxpayer Mid-Level exception, whichever is less.
In theory if MPJ could never play again you might see something like:
a) Near trade deadline Denver gets that 1.8m DPE because why not
b) Next season they see how it looks, and if he cannot play they go for a DPE of the MLE
c) If he looks fully gone, then try and cut him off the cap via medically retired
If it looked really bad you skip step b, if it looks promising you keep waiting until the trade deadline and then trying b for a couple of years, etc. And again, maybe he plays next week