Prorating contracts

[FGump]

Hollinger's full of it, as he usually is when he strays from "telling the numbers" to actually telling us what will happen.

Stackhouse's direct quote: I ain't going nowhere.

The fuller story ... From one of the Dallas NBA reporters:

Stack: I'll be back
4:39 PM Wed, Feb 13, 2008
Tim MacMahon

Jerry Stackhouse confirmed to The Associated Press that the Jason Kidd-to-Dallas blockbuster is basically a done deal.

Stack will be shipped to the Nets in the trade, but he's all for it. That's because all indications are that the Nets will buy out his contract, and he plans to re-sign with the Mavs as soon as league rules allow.

"I feel great," said Stack, who is nursing a sore right hamstring. "I get 30 days to rest, then I'll be right back. I ain't going nowhere."

[Dunkenstein]

I was discussing the Stackhouse issue with my agent friend and he speculated that New Jersey will waive Stackhouse with no buyout. However, as part of the waiver agreement, he feels that Stackhouse will agree that New Jersey will get a 100% setoff of any salary he earns from any other teams for this and the next two seasons. This keeps Stackhouse whole, while reducing NJ's tax hit as much as possible.

He then believes that in 30 days Dallas will sign Stackhouse to a three year deal at the MLE. The first year will be prorated, the second year will be for 5,784,480 and the third year will be for 6,212,960 (with only $2M guaranteed, as it is in his current contract).

Under this scenario, he says that Dallas will get a LT hit this season equal to the prorated amount of the MLE when he signs it. NJ's tax hit this year will be Stackhouse's current salary minus whatever Dallas pays him for this year. Next year, NJ's tax hit will around $800K (his current 08-09 salary minus what Dallas pays him). NJ will have no tax hit in 09-10 since the $2M guarantee in Stackhouse's current contract will be setoff by the $2M guarantee in his Dallas MLE contract.

[bgwizarfan]

^ thanks Dunk.... is it legal, though, for all of this to be agreed upon before the trade? I mean, isn't New Jersey agreeing to waive him before the trade even happens a little fishy. It's almost like Dallas is doing this trade guaranteeing themselves that Stack will be back. just seems a little fishy.

[FGump]

Dunk, that's a very interesting take by the agent. Is he just guessing, or does he have any basis for it?

I gotta say I'm skeptical, because I just can't see the Mavs paying THAT MUCH in payroll PLUS talent, to move from Harris to Kidd. If you add on another big chunk of payroll/tax as well as everything else the Mavs are already giving up - for a player the Nets virtually MUST move but lack anyone else to swallow the salary - it seems like way too much to me. I'll be curious to find out, if/when the deal and buyout happens, how it plays out.

Instead, from a layman's and outsider's perspective, I see the Stackhouse buyout angle as a way for Dallas to partially mitigate the huge salary Kidd makes next year, which has to be way above his current value.

By in essence having NJ take Stackhouse, pay his salary, and then having him go back to Dallas, they have reduced the Mavs net payroll obligation with Kidd in 2008-09 from 21.4M to something much more reasonable. I calculate with a 100% buyout minus an amount for minimums he'll get from Dallas, the Nets would be be paying Stack around 8M. That would leave Dallas with a net payroll cost for Kidd of $13.4M which seems more manageable than that 21+M monstrosity.

[Dunkenstein]

^ thanks Dunk.... is it legal, though, for all of this to be agreed upon before the trade? I mean, isn't New Jersey agreeing to waive him before the trade even happens a little fishy. It's almost like Dallas is doing this trade guaranteeing themselves that Stack will be back. just seems a little fishy.

I agree that the whole business of "sources" saying that Stack will be waived by NJ and will be back in Dallas in 30 days (and then confirmed by Stack himself) smacks of collusion to me. But if the league deems the arrangement "legal", who am I to argue with them?

[FGump]

Collusion? Technically it probably can't be collusion, in that you can't stop a team from talking to THEIR OWN PLAYER (Dallas, and Stack) and come to some understanding that the player and agent will like. And you can't stop a team from asking their trade partner to structure a trade in a way that they like, so they'll do it. And each party (Dallas, NJ, Stackhouse) is acting in their own best interest.

All that being said, I don't particularly like it. The NBA probably doesn't either. But the fact is, they actually made a rule that governed deals just like this that says, "Okay, we know it will happen, so rather than try to outlaw it, we'll just make rules on how to do it." The other teams get a 30-day head start on signing Stackhouse, but he can go where he wants. If you say "Here's how to do it" then it must be allowable.

I still don't really like it. In my opinion, if a team trades you, they should lose you. But if the league wants to okay it, it's impossible to call it underhanded or illegal to do here.

[Dunkenstein]

bgwiz, I agree that something smells a little "fishy" about the whole Stack return to Dallas business.

When two teams make a trade, they are both required to sign a document asserting that there are no "side deals" to the agreement. Since the waiving of Stackhouse by New Jersey and subsequent re-signing by Dallas would not be part of the original deal, though it would apparently have been agreed to by the three parties involved before the original deal was approved by the league, that seems very much like a "side deal" to me.

[bgwizarfan]

yeah, especially considering all the things that can go wrong afterwards. Like what if Stackhouse doesn't want to agree to the 100% set-off (assuming that's real) once the trade is completed and NJ is ready to cut him? NJ can't go and say: "hey we had a deal beforehand that you would do this!"

I like this trade, though - it really includes a lot of different moving pieces all at once. We have a Poison Pill player, we have a player who can exercise his right not to be traded (and he actually did!), we have a minimum salary player involved (if you do the actual math, the trade doesn't work with Allen's salary added in, so you have to take just Kidd's salary, yet from NJ's side, they calculate both as outgoing salary), and we have all-stars, expiring contracts, cash, 1st round picks, and young prospects all involved. Plus we have all the potential after trade problems that we're going through in this thread. This trade's pretty cool from the CBA perspective

[Dunkenstein]

Chad Ford: "If the league feels that the Mavs and Nets had pre-arranged a deal that would release Stackhouse and then gotten Stackhouse to agree to return to Dallas ... they might try to prohibit Stackhouse from returning to Dallas. To me the league would have to have direct evidence that it happened."

[Dunkenstein]

It should also be noted that if Stackhouse were traded to NJ, subsequently waived by NY and then re-signed by Dallas, he would not be eligible to play in the playoffs for Dallas since he would sign his new contract after the March 1 cutoff date for playoff eligibility.

[Three34]

There's no sign-by date, just a waive-by date, when it comes to playoff eligibility.

[Three34]

Example usage: Antknee Carter, last year.

[bgwizarfan]

^haha didnt the mavs sign a 48 year old kevin willis last year and had him active

[Dunkenstein]

You're correct. My mistake.

[Dunkenstein]

The NBA will investigate the possibility the Mavericks and Stackhouse violated league rules with a prearranged agreement for the forward to return to Dallas after reaching a contract buyout in New Jersey and sitting out the 30-day waiting period, sources said. Several league sources said the NBA will consider forbidding Stackhouse to re-sign with the Mavericks this season as punishment for public comments the forward made on Wednesday that suggested tampering could have occurred.

Even if George changes his mind on Friday about agreeing to waive his "Early Larry Bird Rights" and accept the trade to New Jersey, sources said the league office will not immediately approve the trade. With angry rival executives across the league expressing outrage over Stackhouse's comments, as well as the NBA's own issues and suspicions with the comments, senior VP of basketball operations Stu Jackson is obligated to look deeper into the matter.

When several league executives read Stackhouse's comments on Wednesday, they were irate and privately promised to protest if Stackhouse ends up passing on leaguewide offers and returns to the Mavericks. "It sounds like a side deal, doesn't it?" one Eastern Conference executive said. "The league will have a lot of explaining to do if Stackhouse goes back to Dallas."
--Yahoo! Sports

Didn't I talk about "side deals" in a post yesterday? I can now reveal the truth. I am in fact an Eastern Conference executive.

[Three34]

Hey Isiah!

[FGump]

It will be interesting to see where this goes from here. ESPN is reporting that the league will forbid the Mavs from re-signing Stackhouse if he is traded and waived.

But if there is no side deal, just an understanding as to prefeneces and inclinations between the parties ....and
Dallas wants to trade Stackhouse
NJ wants to buy him out

Then, I can see STACKHOUSE raising a real stink (NBAPA grievance) over being FORBIDDEN from signing with the team of his choice, as a free agent, in the event of a buyout. If you are a free agent, and the NBA is in the way of you getting the deal you like the most, that's a collective bargaining violation isnt it?

I don't know it there will even be a trade, but unless there was some sort of secret written side agreement (and you know there wasnt), I still wonder if the league has the right and intent to get in the way.

Other teams don't like it? Hell, other teams didnt like West giving Gasol to the Lakers for free either, I bet, and that one was allowed.

Just my 2c.

[HammJ]

I make the following statements with the following understandings:

1. The info we're getting so far is from 3rd party... perhaps 4th or 5th party sources.

2. David Stern can apparently do whatever he wants with rules and when he chooses to do so. He can, for example, stick to the letter of the law when it comes to suspending players, but then declare rules "outdated" when NBA Officials violate them. I get that.

So let's say it is true that owners have called the league throwing a HUGH-mongous fit about a pre-arranged trade-and-release of Stackhouse. Um, you, the owners, collectively bargained this rule with the players.

Let's also say that Stern has decided that if this trade went through and the Nets waive Stackhouse, the Mavs can't re-sign him for the rest of the season. Again, I point to said rule that was collectively bargained between the owners and players. To quote a now-famous trainer, "it is what it is".

My take is that the best the commish can do is squelch any trade between the two teams that includes Stackhouse, declaring cap circumvention as the reason. It's an ambiguous right given to the commish that was also collectively bargained between the owners and players.

[FGump]

Quotes from Thorn exhibit a glaring indifference to the Stack issue. Same with the Mavs. I'm getting a real feeling that the yahoo writer went off half-cocked on his story, ESPN lil brothered right behind him as they so often do at the Worldwide Follower, and that meanwhile the teams have virtually no problem at all on the Stackhouse "problem" with this trade. As in, they've been so careful to follow the mandates of the rules here that they aren't concerned at all that it could be a hurdle.

[GrandAdmiralDan]

Collusion? Technically it probably can't be collusion, in that you can't stop a team from talking to THEIR OWN PLAYER (Dallas, and Stack) and come to some understanding that the player and agent will like. And you can't stop a team from asking their trade partner to structure a trade in a way that they like, so they'll do it. And each party (Dallas, NJ, Stackhouse) is acting in their own best interest.

All that being said, I don't particularly like it. The NBA probably doesn't either. But the fact is, they actually made a rule that governed deals just like this that says, "Okay, we know it will happen, so rather than try to outlaw it, we'll just make rules on how to do it." The other teams get a 30-day head start on signing Stackhouse, but he can go where he wants. If you say "Here's how to do it" then it must be allowable.

I still don't really like it. In my opinion, if a team trades you, they should lose you. But if the league wants to okay it, it's impossible to call it underhanded or illegal to do here.

I didn't realize you were talking about this here. I just glanced at the thread titles and didn't see the Stackhouse topic.

I actually stopped by the Mavs board then looking for FGump in the Stackhouse thread there, but he was nowhere to be found

I basically made the same comment in that thread that FGump did above.

The NBA and NBPA put in the so-called "Gary Payton Provision" in the 2005 CBA and specifically chose to use a 30 day in season or 20 day offseason waiting period. That's how they chose to deal with this. I wish they would have gone further, but they didn't.

For them to turn around now and get up in arms about someone making use of that relatively new rule is absurd, to me.

It isn't even like this is some antiquated provision in the CBA, it is one of the newest CBA provisions and one of the more notable differences between the 2005 CBA and the 1999 CBA.