Can MLE deals include player incentives?

turk3d · Post #1 » by **turk3d** » Thu Mar 12, 2009 7:37 pm

Can a team who signs a guy on a MLE deal include incentives in it?

Post #2 » by **Three34** » Thu Mar 12, 2009 8:18 pm

Yes, but not in such a way that they can increase the value of the contract to more than the full MLE, which I'm guessing was the basis to your question.

In the first year of a contract the base salary, likely bonuses and unlikely bonuses must all fit within the salary cap or exception. The league also determines a team's available cap room by adding in the unlikely bonuses for all players who signed that season. This prevents a team from signing multiple players to lower salaries but with lots of unlilely bonuses, and therefore committing to more salary than it has cap room to offer.

Exceptions are reduced by the aggregate of the salary and unlikely bonuses, so if the Mid-Level exception is $5.5 million and a player is signed to a $2 million base salary and $500,000 in incentives, the team's Mid-Level exception is reduced by $2.5 million, leaving $3 million.

http://members.cox.net/lmcoon/salarycap.htm#Q61

You can include incentives that push the value of the contract up to the full MLE, though, if you've got one to hand. Morris Peterson has them, for example. But you can't give someone the full MLE and then have them earn even more with incentives.

turk3d · Post #3 » by **turk3d** » Thu Mar 12, 2009 9:09 pm

Yeah, you're absolutely right. The idea would be for guys who wanted to sign who are probably worth more than MLE but due to cap restrictions could not be signed ordinarily. Perhaps including some incentive clauses might help them out. What about a team which was under the cap but only were under enough for the MLE? ie, say that were 5.5M under the cap and wanted to pay the guy 7.5 M. Could they sign him at the MLE and give him 2.0 Mil in incentives somehow? Not sure if the MLE could even be applied under this scenario. Thanks for the response.

Dunkenstein · Post #4 » by **Dunkenstein** » Fri Mar 13, 2009 6:00 am

Edit: corrected below.

turk3d · Post #5 » by **turk3d** » Fri Mar 13, 2009 1:18 pm

Dunkenstein wrote:
turk3d wrote:Yeah, you're absolutely right. The idea would be for guys who wanted to sign who are probably worth more than MLE but due to cap restrictions could not be signed ordinarily. Perhaps including some incentive clauses might help them out. What about a team which was under the cap but only were under enough for the MLE? ie, say that were 5.5M under the cap and wanted to pay the guy 7.5 M. Could they sign him at the MLE and give him 2.0 Mil in incentives somehow? Not sure if the MLE could even be applied under this scenario. Thanks for the response.

In this case they could sign him for the $5.5M in cap room and add another $2M in unlikely incentives. They couldn't sign him to $2M in nincentives which his past performance would indicate he was likely to make.

Interesting. That's kind of weird. CBA rules, I wonder who it was who came up with them. They almost seem to encourage people to try and find loopholes. lol. Thanks for your insight. I appreciate it.

Dunkenstein · Post #6 » by **Dunkenstein** » Fri Mar 13, 2009 5:32 pm

I misspoke earlier. I forgot that "No Player Contract may provide for any Unlikely Bonus for the first Salary Cap Year covered by the Contract that, if included in the player’s Salary for such Salary Cap Year, would result in the Team’s Team Salary exceeding the Room under which it is signing the Contract." Therefore if a team is under the cap, it is limited in what it can pay a player either the MLE or the amount of cap room it has available.