Two Questions: Minimum Salary Contracts and Trade Bonuses

[JNichols42887]

1. Can minimum contracts using the minimum exception contain option years? Or ETO's?

2. A player's salary plus their "trade bonus" can not exceed the max. When you're making that calculation, do you use the entire trade bonus or just the share of the trade bonus that is being counted towards that year's cap?

[Three34]

1a) Yes
1b) No
Don't understand what you mean in 2.

[mysticbb]

#2 It is logical to assume that only the share is counted for the calculation. I'm pretty sure that this is also the way it is handled.

[JNichols42887]

Don't understand what you mean in 2.

mysticbb answered it, but I'll try to use an example:

Max salary for Player X is $10 mil. He has three fully guaranteed years on contract, and will receive a trade bonus of $1.5 mil (which will count $500k on the cap for the next three years). His current contract is for $9 mil.

His contract (9) + trade bonus (1.5) puts him over the max.

His contract (9) + trade bonus cap hit (500k) keeps him under the max.

Which calculation is used? mysticbb suggests the second scenario because it makes sense logically, and I agree.

[answerthink]

mysticbb is correct

[JNichols42887]

Larry Coon's FAQ still leaves me unsure regarding the trade bonus exceeding the max question. He writes,

"For contracts and extensions signed after the current CBA went into effect, the player's salary added to his trade bonus cannot exceed the maximum salary for that year (based on years of service). For example, in 2005-06 the maximum salary for a player with 7-9 years of service is $14,400,000. If such a player has a $14 million salary and a $1 million trade bonus, then his trade bonus is pared down to $400,000 when he is traded. This happens automatically -- the player has no say in the matter. "

[Dunkenstein]

Larry Coon's FAQ still leaves me unsure regarding the trade bonus exceeding the max question. He writes,

"For contracts and extensions signed after the current CBA went into effect, the player's salary added to his trade bonus cannot exceed the maximum salary for that year (based on years of service). For example, in 2005-06 the maximum salary for a player with 7-9 years of service is $14,400,000. If such a player has a $14 million salary and a $1 million trade bonus, then his trade bonus is pared down to $400,000 when he is traded. This happens automatically -- the player has no say in the matter. "

What Larry is saying is that the salary plus the trade bonus cannot exceed the maximum salary that the player can receive. If the maximum salary that the player in Larry's example can receive is $15.5M, then the player could receive his total trade bonus, because his salary plus his bonus would equal $15M which is less than the maximum.

[answerthink]

If you are not absolutely convinced, you can scan Art II Sec 7(e) for the rule, Art I Sec 1(fff) for the definition of “Salary,” and Art VII Sec 3(b) for an overview of how a trade bonus fits within that definition.

[JNichols42887]

If you are not absolutely convinced, you can scan Art II Sec 7(e) for the rule, Art I Sec 1(fff) for the definition of “Salary,” and Art VII Sec 3(b) for an overview of how a trade bonus fits within that definition.

I don't doubt your answers answerthink, as they are supported both by the language of the CBA and common sense. I suppose I just find the wording in the FAQ confusing.

Dunkenstein, I understand Larry's (and your) example, but here is the crux of the matter. In Larry's example, the player with the $14 million salary has a $1 million trade bonus. One would assume the $1 million amount in this example is the total value of the bonus, not the allocation for the current season. Unless the player has only one year left on his deal, that $1 million would mostly be spread over multiple years. If, for example, he had three more years on the contract, his cap number would be $14 million + $1 million/3 years = $14.33 million. This would fit under the max.

But like I said, I agree with answerthink and mysticbb's answer.