Josh Smith Cap question...

[MotownMadness]

Waive Jennings!!

[whitehops]

So, he doesn't get to double-dip $ for $. He double dips 50 cents on the dollar (over and above the minimum salary for a 1 year veteran. Josh has every incentive to sign the biggest contract he can get. And he will - he wants respect. He has to be a starter and all that bullcrap.

Pretty sure he only would get our $14 plus the $750k

the way I've interpreted it is smith gets 100% of the amount he signed with us for. it is 100% guaranteed. he also gets 100% of the amount he singed for with his new team, because that is also guaranteed.

the only difference is that the contract with his new team is offset against our CAP HIT, not what we ultimately have to pay him or ultimately what he makes. we as fans don't have to worry about that, as only the team's cap hit really affects us and only gores cares about what we pay him.

most of this depends on what kind of contract he can get next year and going forward. if he makes $5 million a year next year we get to take off $1.75 million off our total cap hit, which essentially means smith's cap hit is ~$3.5 million.


if he still wants to make as much money as he can then we could realistically see his cap hit drop to the $3-4 million range but if he decides to take the minimum or close to it we're looking at his ~$5 million cap hit for the next five years.

[Irate]

For those wondering why he wasn't bought out. Buyouts are no longer allowed for contracts signed under the new CBA.

http://www.cbafaq.com/salarycap.htm#Q65

Individually negotiated revisions to the payment schedule are not allowed for contracts signed or extended under the current CBA2. For these contracts or extensions the remaining guaranteed salary for a waived player is "stretched" and paid in equal amounts over a greater time span, as follows:

[The Penguin]

So, he doesn't get to double-dip $ for $. He double dips 50 cents on the dollar (over and above the minimum salary for a 1 year veteran. Josh has every incentive to sign the biggest contract he can get. And he will - he wants respect. He has to be a starter and all that bullcrap.

Pretty sure he only would get our $14 plus the $750k

the way I've interpreted it is smith gets 100% of the amount he signed with us for. it is 100% guaranteed. he also gets 100% of the amount he singed for with his new team, because that is also guaranteed.

the only difference is that the contract with his new team is offset against our CAP HIT, not what we ultimately have to pay him or ultimately what he makes. we as fans don't have to worry about that, as only the team's cap hit really affects us and only gores cares about what we pay him.

most of this depends on what kind of contract he can get next year and going forward. if he makes $5 million a year next year we get to take off $1.75 million off our total cap hit, which essentially means smith's cap hit is ~$3.5 million.

Q
if he still wants to make as much money as he can then we could realistically see his cap hit drop to the $3-4 million range but if he decides to take the minimum or close to it we're looking at his ~$5 million cap hit for the next five years.

The CBA reads as a teams liability is set off. I read a liability as the actual dollars owed, not cap dollars.

[Kilo]

It`s actually smart how the stretch works and how the player still has incentive to look for the most money from his new team rather than taking vets minimum to stick it to his old team while getting the same pay anyways. Since they get half of whatever they sign for over and above they still have every incentive to go to the highest bidder or near highest for a better fit. In the very least Detroit should save another $2M yearly off his money owed, and that`s assuming Smith signs for a mere MLE the rest of his career and plays five more seasons. So the 5.4M cap hit becomes $3.4M over the next five years.

[Brapman]

It's becoming very clear now that this was the best way to rid ourselves of Smith.

The future - including our immediate tanking future - looks much brighter.

IMO, the big question now is whether we draft Mudiay or Towns. Watching John Wall and CP3 dominate last night makes me long for a dominant point guard. Is Mudiay going to be all that? If so, a Mudiay, Dinwiddie, Pope, Meeks backcourt looks great to me.

Or can Towns play PF? That guy's incredibly athletic and skilled. He and Drummond could play together theoretically.

Or is Porzingis the real deal at PF? He's supposed to be, and he, for sure, would be a great fit with Andre.

One of those 3 please.

[MotownMadness]

It's becoming very clear now that this was the best way to rid ourselves of Smith.

The future - including our immediate tanking future - looks much brighter.

IMO, the big question now is whether we draft Mudiay or Towns. Watching John Wall and CP3 dominate last night makes me long for a dominant point guard. Is Mudiay going to be all that? If so, a Mudiay, Dinwiddie, Pope, Meeks backcourt looks great to me.

Or can Towns play PF? That guy's incredibly athletic and skilled. He and Drummond could play together theoretically.

Or is Porzingis the real deal at PF? He's supposed to be, and he, for sure, would be a great fit with Andre.

One of those 3 please.

Mudiay looks great in the videos ive seen, Hes definitely got star potential. I still just wish he would have played in the states though so we could have seen more. Porzingas looks good buf no way am I using a top5 pick on any iinternational player. Just too big of a risk for me.

[GreekAlex]

Thanks to all the posters for helping me better understand the cap ramifications... I normally have a good understanding of the CBA and how transactions effect the cap but this was one area I did not. Hope it helps others as well, Thanks!!

[Uncle Mxy]

I suspect we'll see another amnesty clause in the next CBA (very likely in the next couple years with team valuations and revenues escalation), in which case we'd probably use it on JSmoove.

[Laimbeer]

Based on last year's market, I wouldn't be surprised to see Smith get something like 6-8M a year this summer, which would represent a nice reduction in our cap hit. I'm hoping he continues to play well - had a big debut for the Rockets.

[Joe Berry]

I ve talked to a guy who has very good CBA knowledge.

Any new contract Josh Smith signs will lower the Pistons actual team salary but it will NOT lower the actual caphit of 5.4 mil the next few years even one cent. Can anyone confirm this?

If another team signs a player who has cleared waivers, the player's original team is allowed to reduce the amount of money it still owes the player (and lower their team salary3) by a commensurate amount. This is called the right of set-off. This is true if the player signs with any professional team -- it does not have to be an NBA team. The amount the original team gets to set off is limited to one-half the difference between the player's new salary and the minimum salary for a one-year veteran (if the player is a rookie, then the rookie minimum is used instead).

For example, suppose a fifth-year player is waived with one guaranteed season remaining on his contract for $5 million. If this player signs a $1 million contract with another team for the 2011-12 season, his original team gets to set off $1 million minus $762,195 (the minimum salary for a one-year veteran in 2011-12), divided by two, or $118,902. The team is still responsible for paying $4,881,098 of the original $5 million. Note that between his prior team and new team the player will earn a combined $5,881,098, which was more than he earned prior to being waived.

http://www.cbafaq.com/salarycap.htm#Q66

The CBA FAQ actually makes no statement about the cap hit, but take Lin's and Asik's contracts signed with Houston for example. Their caphit was 8.4 mil $ per year for the whole contract, but they got paid over 15 mil $ in the 3rd year, none of which had any implication for their actual caphit of 8.4 mil.