Why only 3 years max in an extension?

[Three34]

Ooooh, hadn't thought of that about Jamison. The old fart.

[Three34]

To answer your initial point, Antawn Jamison signed an extension on June 30th last year. And LeBron can exercise his PO as a part of the extension, just like Kobe did a few months back.

Ok, that makes sense. My original argument was that James can only sign an extension, if he is using his option, because I thought we were talking about signing a contract extension after July 1st, but whatever. Well, the guy changed the subject a little bit. Which raised a question for me: Has James a contract right now without using his option or not? I couldn't really figure that out.

As is always the case with all extensions other than rookie scale ones, it's five total years. So no, he can't sign an extension that runs through 2016.

Not that it seems to mean much to heathmalc, but that is exactly what I told him.

Your boy heath is quite hilariously inaccurate. He should post in this forum, I reckon.

[mysticbb]

Your boy heath is quite hilariously inaccurate. He should post in this forum, I reckon.

Yeah, I read the post about the cap holds and so on, and I was thinking: Wft is this guy talking about? But you did take care of that pretty nicely. His answers were hilariously indeed.

Anyway, thanks to answerthink for giving me the answer I was looking for. I was rather sure that James can't extend his contract without exercising his option.

[mysticbb]

Talking about extensions: http://basketball.realgm.com/src_wireta ... east_$19m/

Isn't that wrong? Reina has the 1st year of the extension starting with a 10.5% raise of the 17.1m for next season. But the 1st year is restricted to the same max rules as if they would sign a new contract in 2011, right? That would mean the extension would start with 105% or $18,006,705 instead of those $18,949,914. Overall that would mean James, Wade or Bosh would get LESS money over the course of 5 years, if they extend their current contracts in comparison to a new 5yr max contract signed with their teams. Anyone has an opinion on that?

[answerthink]

You are correct.

If James extends his contract in the manner described, he’d be subject to the following maximum contract implications for 2011/12: the minimum of (i) $17,149,243 * 110.5% and (ii) the maximum of (a) $17,149,243 * 105% and (b) 30% of the 2011/12 adjusted cap.

In order for the extension numbers presented to be correct, the 2011/12 salary cap would need to reach approximately $66.7 million. The more likely scenario is as follows (assuming the rules of the new CBA have no effect):

2010/11: $17,149,243
2011/12: $18,006,705
2012/13: $19,807,376
2013/14: $21,608,046
2014/15: $23,408,717

[mysticbb]

Thanks for the answer.

[answerthink]

you're welcome. happy to help.

[Village Idiot]

I'm not quite following the arguements here. Would one of you be so kind as to clarify this slight variation?

If Bosh/LeBron/Wade were not to opt out and agree to a trade before July 1st:

When could he and the team acquiring him agree to an extension. What's the earliest they could agree to an extension?

Assuming a maximum extension at that point what is the total value of the contract?

On that contract, what is the largets signing bonus the player could get?

When does the signing bonus get paid? When the extension is signed or when the extension takes effect?

[FGump]

"If Bosh/LeBron/Wade were not to opt out and agree to a trade before July 1st: When could he and the team acquiring him agree to an extension. What's the earliest they could agree to an extension?"

They could be extended within the trade framework itself, in the little known extend-and-trade scenario. Works just like a sign-and-trade.

[answerthink]

James cannot be traded prior to July 1 without first picking up his option. If he does pick up his option and is subsequently traded prior to July 1, he can then sign an extension with his new team at any time through June 30, or after July Moratorium ends.

The maximum value of his extension will be as follows:
2010/11: $17,149,243
2011/12: $18,949,913
2012/13: $20,750,583
2013/14: $22,551,254
2014/15: $24,351,924

However, unless the salary cap in the season following the one to come reaches approximately $66.7 million, his extension will be adjusted to:
2010/11: $17,149,243
2011/12: $18,006,705
2012/13: $19,807,375
2013/14: $21,608,046
2014/15: $23,408,716

James would be eligible to receive a signing bonus of up to 20% of the value of the extended term. Signing bonuses for teams over the cap can be paid no sooner than the first day of the salary cap year covered by the extended term. Signing bonuses for teams under the cap can be paid at any time during the contract’s original or extended term.

[Village Idiot]

Thank you so much.

In a conventional sign and trade after July 1st, can the player receive the signing bonus from the team acquiring him despite signing a contract with his former team?

[answerthink]

If a sign-and-trade contract contains a signing bonus, then either team can pay it. But a team can't receive more than $3 million in cash in any trade. Any portion that is paid by the signing team counts toward that total, which effectively limits the portion of a signing bonus that can be paid by the signing team to $3 million.

[FGump]

James would be eligible to receive a signing bonus of up to 20% of the value of the extended term. Signing bonuses for teams over the cap can be paid no sooner than the first day of the salary cap year covered by the extended term. Signing bonuses for teams under the cap can be paid at any time during the contract’s original or extended term.

Assuming we're talking about LBJ, if traded-to-and-extended-by a team under the cap, would he be eligible for a signing bonus? It seems to me that such an action would be barred, since the cap hit on the bonus would put his cap hit in year one over the max that he's eligible for, and my understanding is that bonuses are limited by the limits of max salary cap constraints.

[answerthink]

Yes, he would be eligible for a signing bonus.

You bring up a good point though. Signing bonuses are indeed limited by the max salary rules. However, simply paying the signing bonus on the first day of the extended term would avoid any such issues.

Teams over the cap have no choice but to do so anyway. Teams under the cap may enter into an extension that calls for the bonus to be paid on the first day of the extended term if they so choose.

Consider an example.

If a maximum extension looked like this:
2010/11: $17,149,244
2011/12: $18,949,914
2012/13: $20,750,585
2013/14: $22,551,256
2014/15: $24,351,926

A maximum signing bonus would be $17,320,736.

And it would break down like this (assuming all seasons are fully guaranteed):

Year / Base Compensation / Signing Bonus / Total
2010/11: $17,149,244
2011/12: $14,619,730 / $4,330,184 / $18,949,914
2012/13: $16,420,401 / $4,330,184 / $20,750,585
2013/14: $18,221,071 / $4,330,184 / $22,551,256
2014/15: $20,021,742 / $4,330,184 / $24,351,926

[FGump]

"Teams under the cap may enter into an extension that calls for the bonus to be paid on the first day of the extended term if they so choose."
.... Except they cannot "so choose" for players like LBJ. Right?

"2010/11: $17,149,244
2011/12: $18,949,914"

Wouldn't an extension for LBJ and every other similar player be illegal at these numbers, barring an unforeseen change in economic circumstances or cap rules?

[answerthink]

Can you clarify your question for me? Are you referring to the fact that the contract will eventually get adjusted downward?

(Apologies about my edit above, by the way. You will note that I edited nothing but word choice.)

[arenas809]

I'm wondering if a player who's going to be a free agent and has a contract that is eligible for extension, could be signed to a extension and simultaneously traded before July 1st?

If not, is there any waiting period to trading a player who's just signed an extension?

[answerthink]

No. The "extend-and-trade" concept is not allowed until July.

A player can separately extend his contract and then his team subsequently decide to trade him, but the two events cannot be coordinated between the end of the regular season and the following June 30.

[FGump]

No. The "extend-and-trade" concept is not allowed until July.

As I understand it, the after-season prohibition on an "extend-and-trade" only applies to a player whose contract has already ended; therefore a player who has one or more future years may be extend-and-traded after a team's season (including playoffs) has ended.

[answerthink]

The rule applies to any player who figures to be a free agent -- as the question by arenas809 denotes -- whether by virtue of an ending contract or a contract that may end based upon the exercise or non-exercise of an option or ETO.