Veteran

[d-train]

Is there a way the NBA is reimbursing the Heat a portion of Greg Oden's salary? The FAQ says reimbursement happens if player is paid veterans minimum under contract for 1-year of less. Oden reportedly has a 2-year veteran’s minimum contract. The second year is a player’s option. Could the Heat and Oden agree to 2 1-year contracts and each contract is a 1-year veteran’s minimum deal. Thereby each contract qualifies for reimbursement.

[d-train]

I don't see anything in the FAQ that prevents a team and player from having 2 separate contracts. The second contract beginning in a later season and the 1st contract beginning the current year.

[answerthink]

The Heat will not receive any reimbursement for Greg Oden’s salary.

A player can theoretically execute two one-year contracts in consecutive seasons with his team and make the same money as with one two-year contract, and save the team a substantial amount of money. However, the team and player would need to execute the first contract without prior knowledge of the possibility for a second.

Teams and players are not allowed to negotiate terms of a future contract (other than an extension) prior to the July 1 in which the player becomes a free agent. Under-the-table agreements for future contracts, whether verbal or written, are a violation of the collective bargaining agreement. Such a violation is considered by the league to be among the most serious a team can commit, and the penalties can be severe.

FAQ #30: http://www.cbafaq.com/salarycap.htm#Q30

You nonetheless bring up a point which has intrigued me for some time as well -- one that could have saved the Heat approximately $6 million this season (among the four current players who have guaranteed contracts at or near the minimum), but one that I am sure would be highly controversial on these boards and in real life.

[d-train]

I'm not suggesting an under the table agreement or one negotiated during a prohibited period. I'm asking if there can be 2 1-year contracts that qualify each as 1-year veteran minimum deals.

[answerthink]

Yes. As it sounds like you know, when a player has been in the NBA for three or more seasons, and is playing under a one-year, 10-day or rest-of-season contract at the minimum salary, the league reimburses the team for any amount of his salary above the minimum salary level for a two-year veteran. There is no reason why this could not happen for consecutive seasons.

But, as mentioned, a player and a team cannot negotiate a contract for anything but the then-current season. Your original question made it sound like the Heat and Oden would be agreeing to two separate one year deals up front.

[d-train]

But, as mentioned, a player and a team cannot negotiate a contract for anything but the then-current season. Your original question made it sound like the Heat and Oden would be agreeing to two separate one year deals up front.

This is what I'm asking. Can a team and player negotiate 2 1-year veteran minimum deals? One deal starting the current year and the other starting the following year.

[d-train]

Another nuance is the unguaranteed nature of the 2nd 1-year agreement. Oden's contract is reportedly a player option. But, what if it were a team option? A team option that gives no guaranty to the player.

[answerthink]

I apologize. I can't see where my response is unclear.

No. Oden and the Heat cannot negotiate for two 1-year contracts up front.

And, as long as a minimum salary contract has second season attached (whether it is a player option, team option, unguaranteed, etc.), it would not qualify for reimbursement.

[d-train]

Your answer is clear as long as it’s clear you understand my question. Is my questions answered in the FAQ? I couldn't find it.

[answerthink]

I most definitely understand your question. Actually, I've written several articles that address your specific concern. Because your point is quite valid. And can produce big-time savings.

The FAQ does address your concern, but perhaps not so eloquently, in Q30. I can now see where LC's response (and thus my original reply) could be confusing. Hopefully, I've clarified it for you.

The CBA language, ironically, is perhaps much more clear: "Every Player Contract must cover at least the then-current Season (or the upcoming Season in the case of a Contract entered into from July 1 through the day prior to the first day of the Season)."

[d-train]

The CBA language is perhaps much more clear: "Every Player Contract must cover at least the then-current Season (or the upcoming Season in the case of a Contract entered into from July 1 through the day prior to the first day of the Season)."

This seems to cover it.

[answerthink]

And that's how a very simple two-line answer becomes a long-winded multi-paragraph response. My apologies.

[DBoys]

Another nuance is the unguaranteed nature of the 2nd 1-year agreement. Oden's contract is reportedly a player option. But, what if it were a team option? A team option that gives no guaranty to the player.

In every possible setup that has any possible provision for more than one season at the minimum, there is no league reimbursement.

[answerthink]

Yes... As I've already posted, and what d-train has already confirmed as understanding.

[d-train]

So, the Heat are paying full luxury taxes since Oden has an option for a 2nd year. And, in 14/15 they are going to owe the repeater tax. So, Oden's 2-yr/$2M contract will cost the Heat almost $8 with taxes.

You have to wonder what's wrong with the other 29 teams. The Spurs could have offered Oden $3 and their cost would have been $3M. But, the Heat are so much more committed to winning they are willing to pay almost 3x as much. It really explains why LeBron, Wade, and Bosh chose Miami over large market teams like NY, Brooklyn, Chicago, and LA.

[DBoys]

You have to wonder what's wrong with the other 29 teams.

Apparently they think that Oden is such high risk to not ever return that they don't want to waste a pile of money on him. Even if it works out somehow, the Heat have to chase him again next summer and bid against everyone else again. When it's all said and done, you might end up thinking, "I wonder what's wrong with Miami."

[d-train]

You have to wonder what's wrong with the other 29 teams.

Apparently they think that Oden is such high risk to not ever return that they don't want to waste a pile of money on him. Even if it works out somehow, the Heat have to chase him again next summer and bid against everyone else again. When it's all said and done, you might end up thinking, "I wonder what's wrong with Miami."

I understand the risks of gambling on a player with the long list of problems associated with Oden. It's stunning that the Heat are willing to gamble $8M and no other team is willing to gamble more than $2M. And, as you point out, the $8M is Miami's cost if they lose. The cost will be even higher if the gamble works out. One might conclude the Heat are playing against a stacked deck.

[d-train]

The earlier reports about Oden's contract length and amount were wrong. According to shamsports.com and the link below, Oden signed a 1-yr veteran’s minimum contract. The NBA will pay a portion of the contract and Oden's pay will be excluded from luxury taxes, nice deal for the Heat. It sure beats the $8M liability the Heat would face if the contract had a 2nd year.


http://probasketballtalk.nbcsports.com/ ... um=twitter

[DBoys]

According to shamsports.com and the link below....

It's interesting that the contract was different than reported. Thanks for mentioning this. Wonder why that is, and if came from sloppy reporting or from a change between agreement and signing.

FYI it's really just one source offering that info, not two. Sham reported it, and PBT is just commenting on what Sham says. However, even though he's the only source, Sham is reliable.

Not sure where you came up with the idea that Oden's salary is excluded from taxes, but that isn't correct. The 884K paid by Miami is taxable just like all the other salary they pay (except for Miller's amnesty amount). Only the small part paid by the league to Oden (about 143K) isn't taxed - it's not on Miami's payroll or team salary because Miami isn't paying it..