Retired Players and the Salary Cap

[Curmudgeon]

Let's say a player has two years left on his contract and decides to retire. There are no medical issues, he just wants to stop playing, and because he's no longer willing to furnish services, the team stops paying him. Under the new CBA, when does the player's salary come off the team's salary cap number? Can the team force the player to voluntarily retire so as to remove him from the cap? If so, how long does that take? I've read Coon's FAQ on retirement issues, but there does not seem to be a clear answer to this basic question.

[DBoys]

Let's say a player has two years left on his contract and decides to retire. There are no medical issues, he just wants to stop playing, and because he's no longer willing to furnish services, the team stops paying him. Under the new CBA, when does the player's salary come off the team's salary cap number? Can the team force the player to voluntarily retire so as to remove him from the cap? If so, how long does that take? I've read Coon's FAQ on retirement issues, but there does not seem to be a clear answer to this basic question.

Given the nature of guaranteed contracts in the NBA, the scenario you paint ("There are no medical issues, he just wants to stop playing, and because he's no longer willing to furnish services, the team stops paying him.") virtually never happens - - although, sometimes the parties PR it to look that way.

Cutting straight to the bottom line: I strongly suspect Kidd's remaining guaranteed salary will be stretched, with the cap hit mirroring that payout. Same with G Hill.

[Curmudgeon]

Why does it never happen?

So a player signs a 4-year extension at $10M a year in May. Then in August he informs the team that he's changed his mind and wants to pursue his real passion: golf. I assume the team stops paying him, since he's no longer furnishing services as a player. The question is, when does he come off the team's cap? Can the team force the player either to play or officially retire?

And suppose, further, that the $10M cap hit puts the team $5M over the luxury tax threshhold. Does the team have any recourse against the player to recover this penalty?

[Dunkenstein]

So a player signs a 4-year extension at $10M a year in May. Then in August he informs the team that he's changed his mind and wants to pursue his real passion: golf. I assume the team stops paying him, since he's no longer furnishing services as a player. The question is, when does he come off the team's cap?

If he officially submits his retirement papers to the league, he is placed on the team's Voluntary Retirement List, and he then comes off the team's cap. Jason Williams did this with the Clippers in 2008.

If he just stops playing for the team, but doesn't actually submit his retirement papers, I would suspect that he would be suspended for refusal to render the services required under his player's contract and his team would stop paying him. In such a case one-half of his salary would be excluded from the team salary. I don't know that a team can actually force a player to submit retirement papers.

[answerthink]

As DBoys mentioned, what you’re asking only rarely ever happens. Very few players sign a multi-year contract and then walk away with several years remaining on their deals. Even fewer walk away with such animosity toward their team that they won’t agree to a partial or full buyout in the process. Fewer still are the circumstances in which the team would then take action to extinguish such salary obligations.

But if this hypothetical scenario were to occur, as you are describing the facts, the player would likely be in breach of his contract and the team could potentially seek to have it terminated under Paragraph 16(a)(iv) and/or the team would be entitled to remedies as described in Art XXXI, Sec 12 of the CBA.

It is possible that the player or Players Association would then object and file a grievance.

Art VII, Sec. 4(a)(1)(iii) of the CBA describes how salaries subject to the grievance process would be handled for cap and tax purposes – which is to say, very generally, that, as Dunkenstein has mentioned, 50% of the grieved amounts would be removed from team salary (though, as noted in Q14 of the FAQ, certain team salary calculations would require the full amount to remain) until the dispute is settled, at which point team salary is adjusted to reflect the settlement. If the agreement doesn’t come until the following season, then the adjustment is made in the following season but if there are luxury tax implications, they would be adjusted to the correct season. Depending upon the circumstances, the grievance process may be eligible to be expedited in accordance with Art XXXI, Sec 13.