team options only for the last year in the contract?

[elrod enchilada]

For a two-part article I am writing for realGM I would appreciate it if someone could help me with the following problem:

Larry Coon;s superb CBA FAQ states that teams can only have options on player contracts for the last year of the contract.

But Antoine Walker's six year deal signed just after the new CBA was ratified has a team option for the last two years of the deal. I recall that Walker's contract was adjusted after the fact when it was dioscovered he had a bad knee, but still this seems like a contradiction.

Can someone help me?

BTW, Larry's explanation is to question 50: http://members.cox.net/lmcoon/salarycap.htm

Antoine Walker's salary is listed here: http://www.hoopshype.com/salaries/minnesota.htm

Thank in advance!

elrod

[casey]

It's not a team option, the last two seasons just aren't guaranteed.

[elrod enchilada]

I do not understand the difference. Can you explain? Are there other contracts since 2005 that have this same provision? Is there something I can read about this?

[elrod enchilada]

PS-- It seems to me that having a team not guaranteeing the last two years of a contract is just the exact same thing as giving it an option for the last two years. If team can go the "Non-guaranteed" route, there is no reason for team options to exist and for so much ink to be spent on them in the CBA. I can't find anything about the right of teams to simply not guarantee the final two or three years of a long-term deal.

I would appreciate soem guidance from someone who might know something about this or who could point me toward someone who would.

Thanks.

[FGump]

http://members.cox.net/lmcoon/salarycap.htm#90 has Coons outline.

It is most common that contracts are fully guaranteed, but a non-guaranteed (NG) for one or more years is not rare. It's just not the norm.

You see it most commonly in rookie free agent deals. It gives the team the chance to bring a player onto the roster, without being on the hook for the year if it doesn't work out. All NG deals become fully guaranteed for the rest of the season on January 10.

Making a year or more NG also gives a team a way to sign a player to a longer contract, without being on the hook if he doesn't work out. If he works out, you already have him under contract. If he doesn't, you cut him and don't owe him for the NG portion.

Some contracts also have incentive triggers, where a season changes from NG to guaranteed if a player meets certain goals in prior seasons.

Some contracts will say that a future season is NG, but if the player is still on the roster past X date, it becomes fully guaranteed. That allows the player to know whether he has a job or needs to go find one, at some point.

The NG/guaranteed dynamic allows lots of ways to incentivize a deal or to hedge against future problems. Players of course prefer all of a deal to be guaranteed, and teams prefer the least amount guaranteed as possible. From that point, it's all a matter of negotiation.

[elrod enchilada]

PPSS--

Here is the wording of the CBA on team options:

Section 1. Team Options.
Except as provided by Article VIII, Section 1, a Player Contract shall not contain any option in favor of the Team, except an Option (as defined in Article I, Section 1(ll)) that: (i) is specifically negotiated between a Veteran or a Rookie (other than a First Round Pick) and a Team; (ii) authorizes the extension of such Contract for no more than one (1) year beyond the stated term; (iii) is exercisable only once; and (iv) provides that the Salary (excluding Incentive Compensation), Likely Bonuses and Unlikely Bonuses payable with respect to the Option Year are no less than 100% of the Salary (excluding Incentive Compensation), Likely Bonuses and Unlikely Bonuses, respectively, payable with respect to the last year of the stated term of such Contract and that all other terms and conditions in the Option Year shall be unchanged from those that applied to the last year of the stated term of such Contract (including, but not limited to, the percentage of Base Compensation that is protected or insured).

http://www.nbpa.com/cba_articles/article-XII.php
**********

I see nothing in the CBA giving teams the right to not guarantee more than the final year of a long-term contract.

I still cannot understand how Walker's deal has a team option for the final two years. Anyone have a clue?

[FGump]

PS - A team option on a season does have lots of similarities, but there are nuances that are a bit different on an option. The trade rules work differently if you have a season in place (NG) versus an option for a season. Players prefer option seasons over NGs, because the NG gives the team a bit more ability to control things to their advantage.

Again, it is all kinds of nuanced levels of differences. Things look similar but some of the advantages and disadvantages are different. And as a result, the rules are different from one to the other as noted.

[elrod enchilada]

Thanks FGump.

It still does not make sense to me. Why even have anything restricting team options in the CBA then, if teams can simply call it a guarantee and push to have, in effect, team options for multiple seasons. I would think the players association would go nuts. And, aside from Walker, I know of no major long-term free agent deal with a team option (or nonguaranteed in toto) for more than the final season.

I am not saying you are wrong, just that I don't see any plain English on this in the CBA, and Larry's answer does not directly address the issue I raise.

Seems like a massive contradiction, short of information none of us apparently has.

[elrod enchilada]

FGump--

Is the non-guaranteed stuff in the CBA somewhere? I cannot find it.

[grizzfan1204]

The difference between the two concepts is if a player is playing under a non-guaranteed contract, the team can cut him and not have to pay him the remainder of his contract

If a player is playing under a team option, let's say a guaranteed team option, then once the team effectuates that option, if they cut the player, the player is entitled to the entire amount under that contract option year, just like any other guaranteed contract.

It seems non-guaranteed contracts favor the team more than do option years (assuming they are exercised).

[elrod enchilada]

Aside from Walker, has any NBA player signed a long-term deal that was for at leats $3 million per year that included two or more years non-guaranteed?

Is there any tradition for this exisiting?

[FGump]

1. I see nothing in the CBA giving teams the right to not guarantee more than the final year of a long-term contract.

2. I still cannot understand how Walker's deal has a team option for the final two years. Anyone have a clue?

1. There is nothing in the CBA that generally requires contracts (other than rookie scale contract, plus others here and there in certain situations) to be guaranteed at all. Most are, but it's a matter of negotiation not rule.

The longest NG deal I've ever seen was for 5 years, all NG.

2. Walker's deal does not have "a team option for the final two years" as you have already been told.

[Word of caution: If you want help, you need to listen when people take the trouble to provide an answer, or this board will get real cold real fast.]

In addition, I'd suggest strongly (in the most emphatic way possible) that you stop using hoopshype for your salary info, if you don't want to be befuddled by pure crap stew from time to time, as you encountered here.

From now on you'd be wise to use shamsports.com where the proprietor is extremely conscientious about getting the various distinctions right on contracts. If you insist on using hoopshype, that's your fault.

Shamsports says the Walker deal has an ETO in the penultimate year and is NG in both of the final two. Technically, neither of those would actually be an option year. I don't personally track those issues on contracts other than the Mavs so can't vouch for those details, but he's quite reliable.

His note is as follows:

Antoine Walker: Signed and traded to a 6 year, $52,146,300 contract in August 2005. Final two options* became unguaranteed when it turned out he had an arthritic knee condition. Walker has an early termination option so he can can opt out of them if he wishes, but they are also both fully unguaranteed, so effectively it works as a mutual option - either the player or the team can terminate the final two years and nothing is owed.


* I assume he mistyped here and meant to say "final two years" instead.

[FGump]

FGump--

Is the non-guaranteed stuff in the CBA somewhere? I cannot find it.

It works the other way. The default option is that contracts are NG.

The CBA lists multiple contract restrictions stating "When a Team agrees to protect, in whole or in part, the Base Compensation provided for by a Uniform Player Contract in the event such Contract is terminated by the Team...." making it understood that guaranteeing is by team choice, subject to negotiation. You can find a whole series of those in Art II Sec 4 of the CBA.

The general portion of the CBA that says the basic contract can be AMENDED to be fully guaranteed is in Art II Sec 3 (e). Without such amendment, it is a NG deal.

[elrod enchilada]

I very much appreciate your response FGump.

So, in plain English, NBA teams can get many years of any non-rookie contract non-guaranteed as long as the player agrees.

I am writing a piece on the increasing value of frontloading contracts, and frontloading makes it easier for teams to get players to agree to team options, or even possibly non-guaranteed years at the end.

Do you know, FGump, if a team can have salaries continue to decline if the last two seasons are non-guaranteed? I know that the CBA states clearly that salaries cannot decrease in the final year of a contract where a team holds the option.

Again I truly appreciate your assistance on this point.

[elrod enchilada]

FGump--

I cannot pm you. Can you email me at bob@freepress.net?

Thanks.

[FGump]

1. So, in plain English, NBA teams can get many years of any non-rookie contract non-guaranteed as long as the player agrees.

2. I am writing a piece on the increasing value of frontloading contracts, and frontloading makes it easier for teams to get players to agree to team options, or even possibly non-guaranteed years at the end.

3. Do you know, FGump, if a team can have salaries continue to decline if the last two seasons are non-guaranteed? I know that the CBA states clearly that salaries cannot decrease in the final year of a contract where a team holds the option.

Again I truly appreciate your assistance on this point.

1. It's all negotiable, except for limited situations where the CBA specifies a contract must be guaranteed.

As far as "rookie contract," that phrase needs to be understood as rookie scale contract, which is what 1st rounders get. On other rookie deals, 2nds and free agents, it's all negotiable and very regularly NG all the way.

2. There are 2 problems with frontloading. First, raise limits and base year issues following a deal are based on the final year or two. Frontloading thus lowers flexibility. Also, when a team signs a free agent using an exception or cap room, they have to have room for the first year amount, so the team has more ability to pay if the first year is smallest rather than largest.

3. "Do you know, if a team can have salaries continue to decline if the last two seasons are non-guaranteed?"...I believe that's allowed and that we've had that discussion here in the past. But cant promise I'm right.

[elrod enchilada]

thanks. if you email me I woudl liek to send you soemthing to look at.

[Three34]

* I assume he mistyped here and meant to say "final two years" instead.

Aye.

[elrod enchilada]

Sham--

Your site is great. I have it bookmarked now.

elrod