What is the purpose of the age rule that blocked Nene's deal?

[Froob]

Do they not want backloaded deals that ultimately pay the players into retirement? And if a player retires, does that salary still count against the cap? That's the only way the rule makes sense to me.

[BdeRegt]

Do they not want backloaded deals that ultimately pay the players into retirement? And if a player retires, does that salary still count against the cap? That's the only way the rule makes sense to me.

That is exactly the reason. The idea is to prevent teams without cap space to signing old players to a long contract. For instance, say a 34 year old player wants $25M guaranteed and plans to play 3 more years but a team only has $5M in cap room. The team could offer him a 5 year deal at $5M per to stay. The player would retire but still get the last $10M while the team stretches it over 5 years with a $2M dead cap hit.

The rule forces team to have cap space to sign old players. It is a good rule in my opinion especially as they have raised the age from 35 to 36 and now to 38. I think it is especially good because it only applies to contracts longer than 3 years.

[Froob]

Do they not want backloaded deals that ultimately pay the players into retirement? And if a player retires, does that salary still count against the cap? That's the only way the rule makes sense to me.

That is exactly the reason. The idea is to prevent teams without cap space to signing old players to a long contract. For instance, say a 34 year old player wants $25M guaranteed and plans to play 3 more years but a team only has $5M in cap room. The team could offer him a 5 year deal at $5M per to stay. The player would retire but still get the last $10M while the team stretches it over 5 years with a $2M dead cap hit.

The rule forces team to have cap space to sign old players. It is a good rule in my opinion especially as they have raised the age from 35 to 36 and now to 38. I think it is especially good because it only applies to contracts longer than 3 years.

Awesome, thanks excellent explanation.

[DBoys]

It flows from when the Lakers, in a move to circumvent the salary cap, signed Magic Johnson to a 25-year contract. Obviously he wasn't going to play 25 years, but that allowed them to stretch his pay out to be given to him for many years after he retired, and then they had cap room to add other talent right away.

[Laimbeer]

Wait, what am I missing? Does a player keep collecting on his contract after he retires?

[Smitty731]

Wait, what am I missing? Does a player keep collecting on his contract after he retires?

It depends on the specific contract language involved. Generally, I encourage people not to get too caught up in actual payments, because what we care about as fans are cap hits.

But we saw an example of the different payment schedules this summer with Otto Porter. The offer sheet the Nets signed him to included up front payments (50% of his salary paid in October IIRC). Payment structures can be tweaked, in accordance with the CBA and the contract signed.

[HartfordWhalers]

Wait, what am I missing? Does a player keep collecting on his contract after he retires?

Generally yes (if its a guaranteed contract). So, for instance Duncan and Paul Pierce got their last years (or partial last year) after retiring. I'm not sure really the best way to explain it, because it is a little counterintuitive. However, contracts can have guarantees even if a player doesn't have the skill to play anymore or medically cannot. Those could be sited as needed.

And as Smitty notes, this means the cap hit stays.

There have been a few exceptions to this. When Mo Williams wanted to retire and still get paid, the Cavs seemed intent on fighting it. The dispute resolved when Mo underwent surgery -- although I'm not implying that he might not have had it anyway.

And then there was the Larry Sanders situation. He got half his remaining money for quitting in his prime for reasons that some described as wanting to smoke weed and not play basketball, and others described very differently. The team and individual negotiated the amount, so no hard and fast rule won the day but both parties took the safe middle ground option.

[BdeRegt]

Wait, what am I missing? Does a player keep collecting on his contract after he retires?

Until the cap jumped last year, it was crazy the cap holds some teams had for certain players. For example, the Lakers had Karl Malones bird rights on their books until 2014 because Lakers hadn't had cap space since he retired so never renounced him.

Players rarely actually retire in any formal manner filing with the league. That is usually only ever done when it's really contentious between player and team. For example, Paul Pierce won't file any retirement papers so if he changes his mind, he could sign and play tomorrow. Duncan and Kobe did the same.

Cbafaq #61 has the full breakdown.