ATL room under the Tax, need confirmation please

[D21]

Hi,

I (and other Hawks fans) need a confirmation on this question :
Is it possible for ATL to sign a bought-out player for a minimum contract tomorrow , and stay under the Tax threshold ?

Some think "No", but I think it's "Yes" , and the difference comes only from Damien Wilkins cost.


Wilkins cap hit is $226,484 + $482,478 = $708,962 on Shamsports ( Link )
but it's $658,382 on Storytellers ( Link )
Not a big difference, but enough to be able to sign or not sign a player and stay under the Tax.

So I decided to do the maths again :
I find 33 days from Dec. 3rd to Jan. 5th,
then 98 for both 10-days and the remaining part of the season (on Jan 8th, Jan 18th and Jan 28th).
The pro-rated of the minimum salary cap hit (854,389) gives $165,882 and $492,530, so a total of $658,382, exactly the same amount "Storytellers" says.

This total makes the total cap hit at $70,089,489, which leaves 70,307,000 - 70,089,489 = $217,511 under the Tax threshold.
Signing a minimum contract tomorrow, with 43 days left until the end of the regular season (total of 170 days) makes 854,389 x 43 / 170 = $216,110 so the answer should be "Yes".

If it's the numbers from Shamsports, it's not enough, so "No", but I think it's an error because Shamsports uses cap hit and not the salaries (see 854,389 for Collins who is making more as veteran), and it's pretty sure that Wilkins can't cost $226,484 from Dec 3rd to Jan 5th.

I start to think Storytellers and I are almost right, at least more than Shamsports, but maybe with an error of one day, and it's important, because if it's 34 days instead of 33, or 79 instead of 78, it makes nearly $5,000 added, and we are over the threshold.
Here are my doubts on the 33 days :
- is it 33 because of "'from Dec 3rd to Jan 5th" (eg. from Dec 3rd 9.00 AM to Jan 5th 9.00 AM)
- is it 34 days because both days would be included (eg. from the start of Dec 3rd to the end of Jan 5th)
Like it's 10 days starting Jan 8th, 10 days starting Jan 18th, and 78 days starting Jan 28th, while it could be 79 if we include both Jan 28th and Apr. 13th


Can someone confirm me (even Sham himself ) how it should be done, please,
and if it's "Yes, we can sign and stay under the Tax", or "No we can't" (not talking about the unlikely bonus of Marvin Williams or Josh Smith, because if one gets it, we would end above the threshold, even if we don't sign anybody).

Thanks (hope it's clear enough to be understood ).

[Three34]

Shamsports uses cap hit and not the salaries

Well, yeah. Cos you're supposed to. Cap hit is what matters, not actual payroll. The Blazers are still paying Shawn Kemp, I think. But since it doesn't affect the cap, it's not relevant.

[Three34]

By the way, a player is paid for the business day they are signed, as well as the business day they are waived, and the first two business days after that (waivers).

[D21]

Thanks Sham.

Shamsports uses cap hit and not the salaries

Well, yeah. Cos you're supposed to. Cap hit is what matters, not actual payroll

I fully agree on that.

By the way, a player is paid for the business day they are signed, as well as the business day they are waived, and the first two business days after that (waivers).

Missed the two following days, but it doesn't explain how you find $226,484 on the first period :

Dec 3rd to Jan 5th, both included, makes 34 days, add 2 more days of waivers and we have 36 days.
854,389 x 36 / 170 = 180,929.

On the other part, I don't know how I found 98 because now I find 96, which gives what you have : 482,478.

We are OK on the second part, but what about my 180,929 and your 226,484 ?

[answerthink]

Sham’s numbers are correct.

What you are confusing is how minimum salary players are actually paid. When a player has been in the NBA for three or more seasons, and is playing under a one-year, ten-day or rest-of-season minimum contract, the league reimburses the team for part of his salary - any amount above the minimum salary level for a two-year veteran. But the reimbursement only starts after the player has already accrued salary equal to that of a two-year veteran.

Wilkins was initially waived prior to accruing the full two-year minimum salary, so there is no reimbursement. He then signed and completed two consecutive 10-day contracts, so the prorated reimbursement applies to each.

The math is as follows…

Initial Contract
Details: Signed Dec. 3, waived Jan. 5; that’s 36 days, including the two he was on waivers
Math: (36 / 170) * $1,069,509 = $226,484

Consecutive 10-Day and Rest-of-Season Contract
Details: 2 10-day contracts and a rest-of season contract starting Jan. 28; that’s 96 days
Math: (96 / 170) * $854,389 = $482,478

Total: $226,484 + $482,478 = $708,963

[Three34]

Therein lies why it was pretty stupid for Atlanta to waive him in the first place. Since they brought him back anyway, they actually cost themselves money.

[Dunkenstein]

Initial Contract
Details: Signed Dec. 3, waived Jan. 5; that’s 36 days, including the two he was on waivers
Math: (36 / 170) * $1,069,509 = $226,484

Consecutive 10-Day and Rest-of-Season Contract
Details: 2 10-day contracts and a rest-of season contract starting Jan. 28; that’s 96 days
Math: (96 / 170) * $854,389 = $482,478

Total: $226,484 + $482,478 = $708,963

answerthink, I'm curious about something. Why is Wilkins' initial contract based on $1,069,509 while his 10-day and ROS contracts are based on $854,389?

[Dunkenstein]

Therein lies why it was pretty stupid for Atlanta to waive him in the first place. Since they brought him back anyway, they actually cost themselves money.

Why did it cost them money by waiving him? If they hadn't waived him, wouldn't they have had to pay him $854,389, rather than the $708,963 that answerthink calculates they will end up paying him. That seems like a savings of almost $150K, unless I'm missing something.

Also, according to one of my sources, $100K of Hinrich's unlikely bonuses became likely after the trade making his cap hit $9.1M for this season and $8.1M for next season, which puts Atlanta just under the LT threshold for this season.

[D21]

What you are confusing is how minimum salary players are actually paid. When a player has been in the NBA for three or more seasons, and is playing under a one-year, ten-day or rest-of-season minimum contract, the league reimburses the team for part of his salary - any amount above the minimum salary level for a two-year veteran

OK with that, and I was only talking about cap hit because like Sham said, it's what is important.

But the reimbursement only starts after the player has already accrued salary equal to that of a two-year veteran.
Wilkins was initially waived prior to accruing the full two-year minimum salary, so there is no reimbursement. He then signed and completed two consecutive 10-day contracts, so the prorated reimbursement applies to each.
The math is as follows…
Initial Contract
Details: Signed Dec. 3, waived Jan. 5; that’s 36 days, including the two he was on waivers
Math: (36 / 170) * $1,069,509 = $226,484

Consecutive 10-Day and Rest-of-Season Contract
Details: 2 10-day contracts and a rest-of season contract starting Jan. 28; that’s 96 days
Math: (96 / 170) * $854,389 = $482,478

Total: $226,484 + $482,478 = $708,963

I was thinking it would made 36 + 96 = 132 days at 854,389/170 each day as cap hit,
and Wilkins being paid on the base of 1,069,509/170 for each day, the difference being the reimbursement, because I still don't get how the 36 days don't get the reimbursement, and the other 10-days and remaining part of the season get it, since all don't match the "accruing the full two-year minimum salary" rule.

Even the total 132 days at 1,069,509/170 makes only 830,442, so less than the "full two-year minimum salary".

[Three34]

Therein lies why it was pretty stupid for Atlanta to waive him in the first place. Since they brought him back anyway, they actually cost themselves money.

Why did it cost them money by waiving him? If they hadn't waived him, wouldn't they have had to pay him $854,389, rather than the $708,963 that answerthink calculates they will end up paying him. That seems like a savings of almost $150K, unless I'm missing something.

Wilkins was picked up midseason (Dec 3rd), and the 10 day contracts came immediately after he cleared waivers. Had they just kept him for the rest of the season, they could have just had the prorated amount of $854, 389, or $663,408.

[D21]

Why did it cost them money by waiving him? If they hadn't waived him, wouldn't they have had to pay him $854,389, rather than the $708,963 that answerthink calculates they will end up paying him. That seems like a savings of almost $150K, unless I'm missing something.

EDIT : Sham answered first.

[Dunkenstein]

Therein lies why it was pretty stupid for Atlanta to waive him in the first place. Since they brought him back anyway, they actually cost themselves money.

Why did it cost them money by waiving him? If they hadn't waived him, wouldn't they have had to pay him $854,389, rather than the $708,963 that answerthink calculates they will end up paying him. That seems like a savings of almost $150K, unless I'm missing something.

Wilkins was picked up midseason (Dec 3rd), and the 10 day contracts came immediately after he cleared waivers. Had they just kept him for the rest of the season, they could have just had the prorated amount of $854, 389, or $663,408.

As answerthink points out, "When a player has been in the NBA for three or more seasons, and is playing under a one-year, ten-day or rest-of-season minimum contract, the league reimburses the team for part of his salary - any amount above the minimum salary level for a two-year veteran. But the reimbursement only starts after the player has already accrued salary equal to that of a two-year veteran."

So wouldn't they have paid him the prorated amount of $1,069,509 until he had been paid $854,389?

[D21]

Thanks Dunkenstein for the info on Hinrich contract.

"When a player has been in the NBA for three or more seasons, and is playing under a one-year, ten-day or rest-of-season minimum contract, the league reimburses the team for part of his salary - any amount above the minimum salary level for a two-year veteran. But the reimbursement only starts after the player has already accrued salary equal to that of a two-year veteran."

So wouldn't they have paid him the prorated amount of $1,069,509 until he had been paid $854,389?

It's exactly my thought.
Even the prorated of $1,069,509 gives 830,442 since he only start the season on Dec 3rd.

I would have thought he have all the 132 days with a part reimbursed, or all the 132 days without reimbursement, so 830,442 (this amount being lower than 854,389).

But one part being reimbursed, and the other not, while every part, and their total made less than the full 2-years veteran minimum ?
I really don't understand.

[answerthink]

D21,
The numbers I reflected were his cap hit only. His actual salary is as follows:

Paid by the Hawks (net of reimbursement): $708,963
Paid by League: $121,480
Total Salary: $830,442

Dunk/D21,
I guess I didn’t do all that good a job of explaining how the reimbursements work. Perhaps it’s easier to think about this way… For a minimum contract of a player with more than two years of experience:

The team pays the first $854,389. The league pays the rest. (Technically, the team pays the rest also, but the league reimburses the team for it at the end of the season).

Since Wilkins never got to $854,389 before he was waived, the league doesn’t need to reimburse anything. That's the reason the first of my two calculations uses his full $1,069,509.

The player’s total salary, the team's portion, and the league's portion are all prorated in the case of 10-day or rest-of-season minimum contracts. Since Wilkins wasn't waived before either of his two 10-day contracts were completed and hasn't been waived in his rest-of-season contract, the league needs to reimburse the amounts above the prorated minimum for a two-year veteran for each of these three contracts. That's the reason the second of my two calculations uses the two-year player minimum of $854,389.

The language can be found in Art IV, Sec 5(k)(2).

[Dunkenstein]

answerthink, thank you for answering my question.

[Three34]

Hinrich gets $100,000 in likely team bonuses based on whether the Hawks make the second round of the playoffs or not. Because they did last season, they got changed to "likely" upon his trade to Atlanta.

[answerthink]

Happy to help. I should also mention that it obviously won’t matter whether or not Wilkins is waived for my second calculation because his contract is fully guaranteed (as is the base salary in all contracts after January 10).

[D21]

Thanks again Sham and Answerthink for all your help, but I still failed to see in the CBA why it should not be reimbursed.

Actually, I think it the first time I am lost like that on a particular point of the CBA.
Sometimes, I forget something and need to check it again in LarryCoon FAQ or in the CBA, but in this case, I am lost, and I just want to understand how you come to this conclusion.

Maybe I missed a term or a line, but I don't see, especially in Art IV, Sec 5(k)(2) anything concerning the waiving before reaching the 2-years minimum salary amount leading to no reimbursement.

The only thing I see is the player has to have 3 years or more of service, and sign for a minimum salary contract being higher than a minimum salary of a 2-years veteran contract.
I don't see anywhere the contract should not be ended before its supposed end (end of season, or a specific day for a 10-days contract).

(k)
(1) The sum of the Compensation paid to each player with three (3) or more Years of Service who signs a one-year, 10-Day or Rest-of-Season Contract for the Minimum Player Salary during a Season, less, for each such player, the Minimum Player Salary for a player with two (2) Years of Service.
(2) The Compensation paid to any player with three (3) or more Years of Service who signs a one-year, 10-Day or Rest-of-Season Contract for the Minimum Player Salary in excess of the Minimum Player Salary for a player with two (2) Years of Service shall be paid by the player’s Team pursuant to the terms of such player’s Uniform Player Contract, and then reimbursed to the Team out of a League-wide fund created and maintained by the NBA. Such reimbursement shall be made at the conclusion of the Season covered by the Contract.

EDIT : deleted the examples, since it was wrong.

[answerthink]

You are looking at the right phrase. I don’t know how better to explain it.

If a player with three or more years of experience who has a one-year, ten-day, or rest-of-season minimum contract has not received “Compensation… in excess of the Minimum Player Salary for a player with two (2) Years of Service,” then no reimbursement is required. The only realistic way it is possible not to receive this level of compensation is if he has an unguaranteed contract and is waived before it ends.

The important factor in determining whether the contract qualifies for reimbursement is whether or not the player has reached the prorated “Minimum Player Salary for a player with two (2) Years of Service.”

If his contract is guaranteed, he will naturally reach that level. If his contract is unguaranteed but he never gets waived, he will also reach that level. Actually, all he needs to do is reach January 10 because at that point his contract would become guaranteed.

Your examples seem to ignore the fact that on January 10 the base salary in all contracts becomes guaranteed for the remainder of that season. They also suggest that you might not be thinking about it correctly.

If a six-year veteran were to sign an unguaranteed rest-of-season minimum contract on December 3, he would earn the prorated minimum salary of $830,442 (132/170 * $1,069,509) if he made it all the way through. He would accrue his salary at a rate of $6,291 per day (1/170 * $1,069,509). Once – and if – he reaches the prorated minimum for a two-year veteran of $663,408 (132/170 * $854,389), the rest of his salary would get reimbursed by the league. Therefore, this is the amount of the player's cap hit when he is signed.

The team knows upon signing the player that he will reach this amount on March 18. After March 18, it essentially gets his services free of charge for the rest of the season (this is of course an oversimplification). But the team also knows two other things: (i) that the player’s contract will become guaranteed on January 10, and at that point the team will be on the hook for the player’s salary from January 10 through March 18 and (ii) after January 10, the player’s cap hit will remain at the full $663,408.

This leads directly into Sham’s point.

The Hawks waived Wilkins on January 5 (having only incurred a cap hit of $226,484), perhaps to avoid guaranteeing his salary. But they ended up doing it anyway. If the Hawks had never waived Wilkins, his cap hit would have remained the full $663,408, and that’s all they would have owed him. Instead, his cap hit, and the amount they owe him, is now $708,963 for the exact same number of days.

[Three34]

Allow me to try and simplify it, even if such a simplification does not adhere fully to the language.

You get the reimbursement thing if your boy gets his salary guaranteed.

Wilkins got cut first time before his contract was guaranteed, so they didn't get it first time.

His salary was guaranteed second time, so they did.

Had they not cut him first time, they would have been reimbursed the whole shaboodle. But they did, so they weren't. Therein lies Atlanta's not-crippling-but-ultimately-a-bit-thoughtless misstep that cost them an amount about three times as much as I am scheduled to earn this financial year - $45,000.