Possible salary relief in works.

[bajaden]

By Chris Tomasson
Pro Basketball News

LAS VEGAS - Could NBA owners whose teams have bad contracts be getting another mulligan?
It's possible the NBA could end up bringing back the amnesty rule that resulted in teams saving millions of dollars in luxury tax during the summer of 2005.
When the NBA reached an agreement on its current collective bargaining agreement (CBA) that summer, teams were allowed a one-time opportunity to waive one player and not have to pay any luxury tax on him. The player, though, got the full amount remaining on his contract, and that counted against the salary cap.
In all, 18 of the NBA teams used the rule, saving about $212 million in luxury-tax payments. Players waived included Michael Finley, Derek Anderson, Brian Grant and Ron Mercer. Finley's release from Dallas proved the most beneficial to another team as he helped San Antonio to the 2007 NBA title.
With NBA economy in peril and the luxury tax next summer possibly dropping by more than $5 million from $69.92 million, NBA commissioner David Stern has spoken to owners about the possibility of the amnesty rule again surfacing, although any possible resurrection of that rule likely wouldn't be put on the table until late in the collective bargaining process.
If such a rule were to be implemented prior to the summer of 2011, which is when the current CBA will expire if the NBA doesn't pick up the 2011-12 option, it likely would have to be approved by both players and owners. But it could end up being part of the next CBA, and there's a chance the current one could be torn up and a new one implemented prior to 2011.
Denver Nuggets coach George Karl said he's heard about the possibility of the amnesty rule returning in some form, and he believes it's a good idea.
"I think it could be something like we did (in 2005)," Karl told Pro Basketball News at the NBA Summer League. "It could be something that resurfaces (similar to the one 2005). Or it could be resurrected in a different way. Is there a way to address both the owners about the financial situation and the players association, where everybody could come to a happy conclusion?"
However, according to those in the know, there could be serious debate among the owners about whether they would want the return of such a rule. There are some owners of teams who haven't given out as many outlandish contracts that might not want to help out teams that have. Teams that have been more responsible then would be at risk of receiving less money back in luxury-tax payments from the big spenders.
Then again, the Spurs usually have kept contracts in check. And the amnesty rule benefitted them after rival Dallas let Finley go.

http://www.probasketballnews.com/story/?storyid=647

 

[Bricklayer]

Why oh why don't they JUST FREEZE THE LUXURY TAX? Just until things are headed up again. Compared to the unpredictable and unbalanced results of another round of amnesty patching its a simple and direct solution. Solves the problem. Works for everybody. Can be implemented and then deimplemented accoridng to easily recognizable guidelines (salary cap goes down, luxury tax freezes at same level as last year, salary cap goes up luxury tax goes up as normal).

However from our perspective this might be the closest thing we get to escaping Beno's deal, so guess its not all bad.

 

[bajaden]

However from our perspective this might be the closest thing we get to escaping Beno's deal, so guess its not all bad.

My first thought! However, what you say makes sense, and seems like an easier sell to the players assoc.

 

[kingsfan101]

However from our perspective this might be the closest thing we get to escaping Beno's deal, so guess its not all bad.

Depends on what the new rule says. Per the last rule, the player was paid the full salary, and the salary was counted against the cap. The only gain was to teams over the tax, in that they didn't have to pay LT on these deals.

If the new rule comes back broadly as above, we don't gain anything, since we are well below the LT. We won't gain any cap space, nor shall the owners save any money.

 

[Capt. Factorial]

However from our perspective this might be the closest thing we get to escaping Beno's deal, so guess its not all bad.

Actually, I don't think that's all too likely. Clearly this exception would be designed for the relief of luxury tax payments, and we're nowhere near the luxury tax as we stand. And really, the only way you get above the salary cap/luxury tax is by signing your own free agents (under Bird rights, etc.) and MLEs.

This summer we're at about $52M in payroll, and we don't have any major FAs to sign. Assuming we make no major moves, next summer (2010) our payroll will be in the $36M range before the draft, so probably under $40M after the draft. The only guy to sign next summer as we stand is Sergio Rodriguez and I don't see him as a break-the-bank player or even a slam-dunk resign.

In the summer of 2011 we have to sign Hawes, and in the summer of 2012 Thompson and Greene. And then Beno's contract is over. As we stand right now, we're in decent salary shape for those years.

It looks like in the short term, we're going to have to either acquire and resign a future FA with Bird rights, (Boozer, Chandler, ??) or make a big splash in the FA market in 2010, plus use an MLE in 2011 plus extend Hawes with a big contract just to get to the point where it's economically feasible to cut Beno under an Allan Houston provision being discussed for the 2011 offseason.

It's not impossible, but it doesn't seem likely that we can get into luxury tax concerns before resigning Tyreke (getting ahead of ourselves?) and by that point Beno is gone anyway.

 

[bajaden]

Actually, I don't think that's all too likely. Clearly this exception would be designed for the relief of luxury tax payments, and we're nowhere near the luxury tax as we stand. And really, the only way you get above the salary cap/luxury tax is by signing your own free agents (under Bird rights, etc.) and MLEs.

This summer we're at about $52M in payroll, and we don't have any major FAs to sign. Assuming we make no major moves, next summer (2010) our payroll will be in the $36M range before the draft, so probably under $40M after the draft. The only guy to sign next summer as we stand is Sergio Rodriguez and I don't see him as a break-the-bank player or even a slam-dunk resign.

In the summer of 2011 we have to sign Hawes, and in the summer of 2012 Thompson and Greene. And then Beno's contract is over. As we stand right now, we're in decent salary shape for those years.

It looks like in the short term, we're going to have to either acquire and resign a future FA with Bird rights, (Boozer, Chandler, ??) or make a big splash in the FA market in 2010, plus use an MLE in 2011 plus extend Hawes with a big contract just to get to the point where it's economically feasible to cut Beno under an Allan Houston provision being discussed for the 2011 offseason.

It's not impossible, but it doesn't seem likely that we can get into luxury tax concerns before resigning Tyreke (getting ahead of ourselves?) and by that point Beno is gone anyway.

Well just go ahead and rain on our parade..

 

[bajaden]

Depends on what the new rule says. Per the last rule, the player was paid the full salary, and the salary was counted against the cap. The only gain was to teams over the tax, in that they didn't have to pay LT on these deals.

If the new rule comes back broadly as above, we don't gain anything, since we are well below the LT. We won't gain any cap space, nor shall the owners save any money.

Whereas it doesn't apply to us, as were not over the luxury tax thresshold, at least not at the moment. My question is what happens when the player thats waived is signed by another team. I would assume that whatever amount he is signed for would be removed for his orginal teams salary base.

 

[MassachusettsKingsFan]

At first ( and brief ) glance, wont this help the big market - high payroll teams a lot more then the small market - low payroll teams?

The only teams paying to the tax are the contenders or the Knicks .. the rich get richer.


I dont see the point for THIS idea right now, but I'd like to see the NBA do something so that 1 bad contract doesnt ruin your team for years.

 

[Section 101]

At first ( and brief ) glance, wont this help the big market - high payroll teams a lot more then the small market - low payroll teams?

The only teams paying to the tax are the contenders or the Knicks .. the rich get richer.


I dont see the point for THIS idea right now, but I'd like to see the NBA do something so that 1 bad contract doesnt ruin your team for years.

Then owners/gm's shouldn't offer bad contracts. Nobody forced them.

 

[fnordius]

The only teams paying to the tax are the contenders or the Knicks .. the rich get richer.

And the tax money is distributed to teams like the Kings, so this would mean some net decline in income for us. It's not something that I want right now.

 

[SacTownKid]

With the way talent is being lead to only about 4-5 elite teams right now, I see no other long term solution to the unfair advantage in signing available talent than revenue sharing. The NBA is going to see a huge decline in competitiveness this year and I see that having nothing but more and more negative effects in ratings, attendance, etc.

 

[Merdiesel]

At first ( and brief ) glance, wont this help the big market - high payroll teams a lot more then the small market - low payroll teams?

The only teams paying to the tax are the contenders or the Knicks .. the rich get richer.


I dont see the point for THIS idea right now, but I'd like to see the NBA do something so that 1 bad contract doesnt ruin your team for years.

F that...

We had to go through this crap with K9... I hope every team has to go through this crap.

 

[bajaden]

Then owners/gm's shouldn't offer bad contracts. Nobody forced them.

Well they may not have been bad contracts when they were offered. AKA Webber. Until he blew out his knee, the contract was fine. However, I would rather have something that helped every team across the board.

 

[kingsfan101]

I would assume that whatever amount he is signed for would be removed for his orginal teams salary base.

Per my understanding of the last rule, no.

 

[kingsfan101]

Well they may not have been bad contracts when they were offered. AKA Webber. Until he blew out his knee, the contract was fine. However, I would rather have something that helped every team across the board.

Actually, in such a calamity, even other contracts, once ok, can become bad. For example, when Webber was healthy, we were contending. It was reasonable to overpay other players a little, in an effort to win a (or more) championship(s).

Once Webber got injured and we were no longer contenders, those players became overpaid, and moving them became tough.

 

[Bricklayer]

Actually, in such a calamity, even other contracts, once ok, can become bad. For example, when Webber was healthy, we were contending. It was reasonable to overpay other players a little, in an effort to win a (or more) championship(s).

Once Webber got injured and we were no longer contenders, those players became overpaid, and moving them became tough.

That's a solid point, although our front office was also directly responsible for many fo those difficulties for not recognizing the new reality and insisting on holding oin and holding on and holding on to each of those assets until they had been exposed and lost most of their value. What we could have got for a Bibby, a Peja a Miller in 2005 was far FAR greater than what we eventually did after stubboirnly holding onto them until they had been completely exposed as system players with bloated deals.

 

[bajaden]

That's a solid point, although our front office was also directly responsible for many fo those difficulties for not recognizing the new reality and insisting on holding oin and holding on and holding on to each of those assets until they had been exposed and lost most of their value. What we could have got for a Bobby, a Peja a Miller in 2005 was far FAR greater than what we eventually did after stubboirnly holding onto them until they had been completely exposed as system players with bloated deals.

I agree 100% on Peja, Bibby, and Miller. There's no doubt they both would have had greater value in 2005. I believe Peja had just come off an all-star season. It probably would have been a hard sell to the Maloofs though, who were looking through rose colored lenses at the time.

Webber is a different deal. At the time we were contenders and then, boom, we weren't. It just happens. It could happen to Duncan, or Kobe. Its the one thing thats hard to plan for. I've always thought that its too bad they don't have some sort of injury clause in the league contract. Like if a player is injured and becomes a shell of his former self, you can waive him, still have to pay his salary, but it doesn't count against the cap. I know, I'm dreaming..

 

[Section 101]

I agree 100% on Peja, Bibby, and Miller. There's no doubt they both would have had greater value in 2005. I believe Peja had just come off an all-star season. It probably would have been a hard sell to the Maloofs though, who were looking through rose colored lenses at the time.

Webber is a different deal. At the time we were contenders and then, boom, we weren't. It just happens. It could happen to Duncan, or Kobe. Its the one thing thats hard to plan for. I've always thought that its too bad they don't have some sort of injury clause in the league contract. Like if a player is injured and becomes a shell of his former self, you can waive him, still have to pay his salary, but it doesn't count against the cap. I know, I'm dreaming..

They do. But the player has to be finished.

 

[kingsfan101]

That's a solid point, although our front office was also directly responsible for many fo those difficulties for not recognizing the new reality and insisting on holding oin and holding on and holding on to each of those assets until they had been exposed and lost most of their value. What we could have got for a Bobby, a Peja a Miller in 2005 was far FAR greater than what we eventually did after stubboirnly holding onto them until they had been completely exposed as system players with bloated deals.

Yes, and in retrospect, it seems so obvious.

However, at that time, I never thought these guys shall go so downhill so quickly. Likely, as you suggested, they were not that good to begin with, but looked better than they were in a system, but I for one, was fooled.

But then I am not the owner or the GM making millions of dollars for this work. Had Geoff and Maloofs been more active, we might have had a quicker rebuild.

Hopefully, this time we shall not only be good, but also lucky.

 

[Bricklayer]

I agree 100% on Peja, Bibby, and Miller. There's no doubt they both would have had greater value in 2005. I believe Peja had just come off an all-star season. It probably would have been a hard sell to the Maloofs though, who were looking through rose colored lenses at the time.

Webber is a different deal. At the time we were contenders and then, boom, we weren't. It just happens. It could happen to Duncan, or Kobe. Its the one thing thats hard to plan for. I've always thought that its too bad they don't have some sort of injury clause in the league contract. Like if a player is injured and becomes a shell of his former self, you can waive him, still have to pay his salary, but it doesn't count against the cap. I know, I'm dreaming..

I obviously do not blame the front office for Webber's knee -- the night that happened you could see the championship dreams die. I absolutely do blame the front office (and this might have been the Voison-poisoned owners) for panicking and making a tough situation much much worse, not only on court, but by damaging the support of the fanbase as well. One of the worst moves in the last decade.