Multi year contract for Z?

[golfer2]

If a team that still has their MLE (such as Atlanta) offers the maximum allowable salary to Z (using their MLE), that would be about $1.5 million (as I understand the CBA FAQ) for the rest of this season.

Can they offer Z a multi year contract? As I understand it, they can. If they do, what would Z's maximum salary be for next season (2010/11)?

Also, what would the maximum length contract they could offer?

Also, what maximum length contract could the Cavs offer Z, and for how much?

[DumbyTheWizard]

The maximun raise for a player who you dont have his bird rights is 8%. So Z could make 8% more then what he makes this year if you sign him to a multi year deal. But if you sign him for a 1 year deal you can offer him the entire MLE or whatever cap space you got as long as its not more then the MAX (35% from the cap)

[golfer2]

The maximun raise for a player who you dont have his bird rights is 8%. So Z could make 8% more then what he makes this year if you sign him to a multi year deal. But if you sign him for a 1 year deal you can offer him the entire MLE or whatever cap space you got as long as its not more then the MAX (35% from the cap)

Right now, the Cavs have about $200,000 left on their MLE and they have their full BAE. However, the BAE is pro-rated and they could offer Z only about $700,000 (for the rest of this season) using the BAE. If they wanted to offer Z a 2 year contract, what would the maximum salary be for the second season (2010/11)?

The Hawks have their full MLE and could offer Z about $1.5 million (for the rest of this season) using the pro-rated MLE. If they wanted to offer Z a 2 year contract, what would the maximum salary be For next season (2010/11)?

[D21]

Hi,
if ATL make an offer today, it would be more than $4M for this season.
If there's no error, it's like this:

51 days since January 10th (included), 169 days for this season

5.854 x (169-51)/169
= 5.854 x 118 / 169
= $4,087,408 in first year (this season)

Add 8% for next year and it would make $4,414,401 in second year, total of $8,501,809.


From CLE with the BAE, and considering they can't sign Ilgauskas until March 22nd :

1.99 x (169-72) / 169
= 1.99 x 97 / 169
= $1,142,189 in first year (this season)

Add 8%: $1,233,564 in second year, total of $2,375,753

[Dunkenstein]

Hi,
if ATL make an offer today, it would be more than $4M for this season.
If there's no error, it's like this:

51 days since January 10th (included), 169 days for this season

5.854 x (169-51)/169
= 5.854 x 118 / 169
= $4,087,408 in first year (this season)

Add 8% for next year and it would make $4,414,401 in second year, total of $8,501,809.

Isn't the second year based on 108% of the full MLE, not the prorated one?

[D21]

Isn't the second year based on 108% of the full MLE, not the prorated one?

Needing confirmation, and if Larry Coon can help us on that point, it would be great.

Meanwhile, from the CBA:

Art.VII , section 5 (c)(1)(i):

For each Salary Cap Year covered by a Player Contract after the first Salary Cap
Year, the player’s Salary, excluding Incentive Compensation, may increase or decrease in
relation to the previous Salary Cap Year’s Salary, excluding Incentive Compensation, by no
more than 8% of the Regular Salary for the first Salary Cap Year covered by the Contract.

It looks like it's based on the Salary, and not based on what the salary itself is based (MLE).

[bgwizarfan]

This was a discussion we had over 2 years ago, and I believe we had decided that Dunk was right ... he'd be eligible for 8% more than the full MLE for the following year, but im not sure we ever got full confirmation.

[D21]

I don't remember the exact discussion, but two years ago, there was the Van Horn case in Kidd trade.

Van Horn was sign for the prorated MLE on 02/19/08, with 4,236,997 as first year.
The need was to give him enough to match salaries in the trade, but the following years had no utility, and were not guaranteed.
But it was: 3,792,112 then 3,347,228.

It's a 10.5% decrease, based on 4,236,997 (Bird rights).
If it was based on the full MLE, it could have make more, reducing the following years, and I don't see why they would have not use this possibility.

But again, they knew the second and third year would not be use, so...

[golfer2]

Thanks for the help, guys.

[FGump]

This was a discussion we had over 2 years ago, and I believe we had decided that Dunk was right ... he'd be eligible for 8% more than the full MLE for the following year, but im not sure we ever got full confirmation.

That's not how I recall it. While exceptions themselves are prorated, I think we discovered that the amount mentioned in the contract is what the player gets ... so a deal where a team is using their "prorated MLE" at the deadline might be for about $4M - and it would be written at $4M. Re the KVH deal also mentioned here, we learned that the amount being paid to him wasn't prorated either even though it was for only < 2 months.

As a result (and much simpler to grasp), it's simply the number of dollars paid in yr 1 that's written in contracts and that governs things when determining future raises. That's consistent with the fact that (other than a minimum salary deal) the contract itself doesn't even mention the means by which a player is being squeezed onto an already-full cap. It just specifies a dollar amount. It's up to the team, when submitting the contract, to then tell the league how they want to squeeze it onto their already-full cap ie via what exception. Unless there's something I've forgotten (which is always possible).

[FGump]

And one other item - despite all the conjecture running wild when media discussed teams "bidding" on Z, I'm wagering he gets a prorated minimum (about $250K?) and nothing more. We always hear such conjectures every year about who can bid what, but once the dust settles it seems to have merely been a popularity decision with everyone getting the same amount. I dunno but I'm guessing it's probably the set-off rules lessening the impact of any differences, with the players themselves being discards who have already been paid for the year, that de-incentivizes bidding.

[Mezotarkus]

And one other item - despite all the conjecture running wild when media discussed teams "bidding" on Z, I'm wagering he gets a prorated minimum (about $250K?) and nothing more. We always hear such conjectures every year about who can bid what, but once the dust settles it seems to have merely been a popularity decision with everyone getting the same amount. I dunno but I'm guessing it's probably the set-off rules lessening the impact of any differences, with the players themselves being discards who have already been paid for the year, that de-incentivizes bidding.

The bidding of course had nothing to do with money and most people ever thought it did. Ilgauskas has made $120m+ in his career and gave up $1m in the buyout. If it was about money he'd have staayed in Washington. Ilgauskas wants a championship and wants the best shot at that objective. The bidding was about showing Ilgauskas the bidder has a credible shot and he has a critical role to play. The only way this was ever going to be interesting is if there was a team that had an appreciably better shot at winning the championship than the Cavs and that was not the case.

[chakdaddy]

Interesting - so the consensus seems to be that it's the exception that is prorated, not the actual salary? The player gets what is considered a full year's salary, but the maximum value of that salary declines throughout the year as the MLE or minimum salary gets prorated throughout the year.

I would have thought it would be the other round. Ultimately, I guess it only matters for the calculation of potential raises.

Here's a question: how does this apply to teams with cap space? If a team is 3 million under the cap in the offseason, they can't offer as much as a team with the MLE. But at the end of the season, does the cap space also get prorated? Or could that team still offer the full 3 million for a few weeks of a player like Z, while a team with only the prorated MLE remaining could not offer as much?

[FGump]

Interesting - so the consensus seems to be that it's the exception that is prorated, not the actual salary? The player gets what is considered a full year's salary, but the maximum value of that salary declines throughout the year as the MLE or minimum salary gets prorated throughout the year.

I would have thought it would be the other round. Ultimately, I guess it only matters for the calculation of potential raises.

Here's a question: how does this apply to teams with cap space? If a team is 3 million under the cap in the offseason, they can't offer as much as a team with the MLE. But at the end of the season, does the cap space also get prorated? Or could that team still offer the full 3 million for a few weeks of a player like Z, while a team with only the prorated MLE remaining could not offer as much?

Cap space wouldn't get prorated, and as far as I know neither do Bird exceptions. So in theory when you say, "could that team still offer the full 3 million for a few weeks of a player like Z" - the answer is yes they COULD, but in actuality it's not a real life possibility because a player like Z is not worth a million a week to an owner. That's why, despite all the "the most Team A can offer" articles about Z and others, they basically end up getting nothing more than prorated minimums even if everyone is chasing.

[Dunkenstein]

I received this today from an NBA team official:

I think there is some confusion because Room (which is prorated) is separate from Salary (which is not prorated). A Team must have the necessary Room in order to sign a player, but the actual salary signed for and listed in Exhibit 1 of the UPC is never prorated. Think of room and then the salary as two different things.

Room (Exception Room or Team Room) Amount: A player cannot sign for an amount unless it fits within the amount of room available for the method that the team designated the signing to the League Office. Room, in some instance is prorated.

-The Bi-Annual, Mid-Level and Veteran Free Agent exceptions are reduced (prorated) starting on January 10th of each season. The proration is a little complicated, so I won't get into it here.

-The Minimum Player Salary Exception is prorated starting on Day 2 of the Regular Season (games are irrelevant, it is based on the number of days in the Regular Season). Since there are 170 days in the regular season, each day that passes reduces the amount by 1/170.

-Team Room (cap room), Traded Player Exceptions and Disabled Player
Exceptions do not get prorated during the season.

Actual Signing/Salary: A player's salary (except in the case of 1998-99 lockout shortened season) is NOT prorated. Whatever is listed in Exhibit 1 of the UPC is what the player will earn as far as Base Compensation (Current and Deferred), Signing Bonuses, Incentive Compensation, etc. So assuming that a Team has $1.5M in room (whether via MLE, Cap Room, Veteran Free Agent exception, etc.) to sign the player, the player's salary is $1.5M. The salary is not prorated.

Keep in mind that the player contract never make reference to the exception used to sign the player. The player/agent has no control over that. The team files supplemental documentation with the League Office to justify/designate with what Room they are using to sign the player.

If the contract is a multi-year contract, then raises will be based on the actual salary (salaries are not prorated). So if the player signs for $1.5M in Base Compensation and the team either has no Veteran Free Agent rights or Non-Qualifying Veteran Free Agent rights, the raises will be 8% of $1.5M.

If the player signs and becomes a free agent, then his subsequent Veteran Free Agent exception amount will be based on his salary (salaries are not prorated). So if the salary was $1.5M and the player was a NQVFA player, then the Team can use the NQVFAE rights to sign the player to 120% of $1.5M.

As of yesterday, Cleveland had $0 in Team Room (cap room). Cleveland did not have any DPEs. Cleveland had a prorated $1,135,470 Bi-Annual Exception.

Cleveland had a $119,691 prorated MLE. The applicable prorated Minimum Salary for Z was $176,756. Since the prorated MLE is smaller than the prorated Minimum Salary, that cannot be used. So it was a choice of BAE or Minimum.

Raises - Raises are based upon the actual signing/salary... not with the
exception designated to sign him.

-If Z signed using the prorated Minimum Salary, then his salary for 2009-10 is $176,756. That's what is listed in Exhibit 1 of his UPC. That is the amount that will be used to determine raises for 2010-11 if it was a multi-year contract. However, since 108% of $176,756 is less than the 2010-11 Minimum Salary for Z ($1,352,181), the contract would be amended (or in this case it is allowable to list) to list $1,352,181.

-If Z signed using the prorated BAE, then his salary for 2009-10 is $1,135,470. That's what is listed in Exhibit 1 of his UPC. That is the amount that will be used to determine raises for 2010-11 if it was a multi-year contract. However, since 108% of $1,135,470 is less than the 2010-11 Minimum Salary for Z ($1,352,181), the contract would be amended (or in this case it is allowable to list) to list $1,352,181).

So in either case, a multi-year contract for Z would have resulted in no more than the Minimum Salary for 2010-11.

Veteran Free Agent Rights- VFAE rights are based upon the actual
signing/salary... not with the exception designated to sign him.

-If Z signed using the prorated Minimum Salary, then his salary for 2009-10 is $176,756. That's what is listed in Exhibit 1 of his UPC. That is the amount that will be used to determine VFAE rights/values. Z would be a Non-Qualifying Veteran Free Agent if signed only for the rest-of-season. The VFAE amount for a NQVFAE player is the greater of (1) 120% of the player's prior salary (a little more complex, but that's the basic concept), (2) if a qualifying has been extended, the QO amount, or (3) 120% of the applicable Minimum Salary. In this case, the greatest value would be 120% of the applicable 2010-11 Minimum or $1,622,617. And not to confuse you, but his cap hold would be the 2 year minimum of $854,389.

-If Z signed using the prorated BAE, then his salary for 2009-10 is $1,135,470. That's what is listed in Exhibit 1 of his UPC. That is the amount that will be used to determine VFAE rights/values. Z would be a Non-Qualifying Veteran Free Agent if signed only for the rest-of-season. The VFAE amount for a NQVFAE player is the greater of (1) 120% of the player's prior salary (a little more complex, but that's the basic concept), (2) if a qualifying has been extended, the QO amount, or (3) 120% of the applicable Minimum Salary. In this case, the greatest value would be 120% of the applicable 2010-11 Minimum or $1,622,617. And not to confuse you further, but his cap hold would be the 2 year minimum of $1,362,564.

So in either case, the NQFAE amount that Z would sign for would be the same... the only difference would be the free agent cap hold counting against Cleveland's Team Salary until signed or renounced.