Posted Dec 2 2011 9:20AM
Publish rumors willy-nilly ...
'Tis the season to be silly ...
After eight months of writing about BRI and revenue sharing and stretch provisions, it's good to get back to the business of wildly unsubstantiated rumors based on "sources." And given the compressed period of team contact with agents before next Friday's scheduled opening of training camps, the crazy talk has been flowing hot and heavy in the last couple of days.
Apparently, every team in the league has made a "serious" offer to Orlando and New Orleans for Dwight Howard and Chris Paul, respectively. Forget whether the supposed offers even make sense or are legal under the old collective bargaining rules -- which are still the rules of record until the new CBA is ratified. It makes for page views and hits, and that's what it's all about these days, right?
Well, every party has its pooper, and that's me, I'm afraid.
Fans need to understand that teams cannot, and will not, make any decisions on free agent signings, or trades, or whether to use the "amnesty" provision that's getting so much attention, until the final details of the new CBA are clear. And that won't happen until it's ratified by both the owners and the union. And it can't be ratified until those details are negotiated between the league and the union. Which hasn't happened yet.
I can tell you, breathless speculation to the contrary, that there will be no trade of Paul or Howard this weekend.
So slow your roll. Catch your breath.
Now, let's talk amnesty.
It is true that the amnesty clause in the new CBA not only allows teams to remove one player's salary from its luxury tax threshold number, but from its salary cap as well, meaning the potential clearing of millions of dollars that could be used on free agents or to facilitate trades. The thought of Your Team suddenly being a player with the stroke of a pen has fans understandably excited. Everyone has already penciled in Gilbert Arenas (three years and $62 million remaining) out of Orlando, as well as Rashard Lewis (two years, $43.8 million remaining) in (out?) of Washington. The Oregonian reported this week that Brandon Roy (three years, $49.3 million left) is gone.
But everything, as Mr. Miyagi said in The Karate Kid, not always as seem.
"I wouldn't hold my breath on amnesty," a team executive with one of the more onerous contracts on his books said Wednesday. He then cited many of the 18 players who were waived in 2005 when the last amnesty period took place: Vin Baker, Troy Bell, Calvin Booth, Derek Anderson, Howard Eisley, Fred Hoiberg. Not exactly household names, and not exactly huge salaries, either. The two highest-profile names on the list -- Alonzo Mourning (Toronto) and Reggie Miller (Indiana) -- had already been waived and retired, respectively, though Mourning did return to the Heat after being waived by the Raptors.
One team -- Dallas -- did save a lot of money by waiving Michael Finley and the $51 million remaining on his contract at the time. But the "Allan Houston Rule," as it was mistakenly known -- the Knicks did not waive Houston and his huge remaining contract that year, they waived Jerome Williams and his remaining $19 million -- was not the financial bonanza that many anticipated. This year's version won't be, either.
With enhanced revenue sharing promised by the Commish, the teams that will be coughing up the lion's share of those dollars -- your Lakers and Knicks and other high-revenue producers -- wanted some assurances that the teams at the bottom of the revenue pile wouldn't just pocket the new dollars they'll be getting as hidden profits. No one wants for the NBA what happened in Major League Baseball, where teams like the Pirates just stuffed their mattresses full with Yankees luxury tax money for years and never put a competitive team on the field.
So a new provision in the next CBA forces every NBA team to spend a minimum of 85 percent of the salary cap number in each of the next two seasons, up from the previous minimum of 75 percent of the cap. And in the third year of the CBA, and going forward, the minimum will rise to 90 percent of the cap, putting NBA teams more in line with the minimum cap percentage NFL teams now have to spend. (Last season, you may remember, the Kings acquired the injured and unavailable Marquis Daniels from Boston at the trade deadline for the sole purpose of getting to $44 million -- 75 percent of the $58 million cap -- in team salary.) With the cap staying at $58 million for the first two years of the new CBA, that means teams have to spend at least $49.337 million in salaries.
Let's take the Wizards as an example. Washington still has Lewis' monster deal on its books. At first glance, using the amnesty clause to waive Lewis as a business move seems like a no-brainer. At the moment the Wizards have approximately $78.3 million committed for next season on 16 players -- though the actual salary they'll spend is much less, as will be explained shortly.
Approximately $40.7 million of that $78.3 million is for the eight players Washington currently has under contract, including Lewis and his $21.1 million salary.
The other $37.6 million is a combination of money the Wizards will pay their two first-round picks, Jan Vesely and Chris Singleton, this season -- $3.16 million and $1.53 million, respectively -- and another $32.9 million in so-called "cap holds," which keep free agents on a team's books until the team either re-signs the player, loses the player to another team or renounces its rights to the player. Among these players are restricted free agent Nick Young, Washington's starting two guard last season and a player the Wizards want to keep, and veterans like Yi Jianlian, Josh Howard and Mo Evans. The Wizards aren't going to re-sign Yi, so his $12.1 million hold will come off when they renounce him. That reduces the team's outlay from $78.3 million to $66.2 million -- which also gets it under the luxury tax threshold.
Howard's cap hold is $6 million; Evans' $5 million. If the Wizards chose to renounce their rights to both of them as well, that would shave another $11 million off the team's salary, getting Washington to $55.2 million. So, conceivably, if the Wizards really wanted to go low, they could use the amnesty clause on Lewis, get his $21.1 million off, and suddenly be sitting at just $34.1 million in team salary. The Wizards also have a second-round pick, guard Shelvin Mack, who could make the team. Under the old cap rules he'd make a minimum of around $490,000; for the sake of this example, let's say that's his salary next season as well. So with Mack and without Lewis, the Wizards' team salary would be around $34.59 million for 12 players, including free agents Hamady N'diaye and Larry Owens.
Voila! The Wiz are players!
Except for that pesky 85 percent minimum rule.
Remember, every team will have to spend at least $49.337 million next season on players. That rule means the Wizards would have to add another $14.7 million in salary. Fans may argue that a team such as Washington could do a lot worse than going after, say, a Jason Richardson or a Nene with that extra money. But teams have to be allowed to build the way they want, not the way fantasy team owners may like. The Wizards want to keep their cap flexibility beyond this season, and that would be severely compromised if they dropped, say, $65 million on Nene now and then had to do future extensions for the likes of John Wall, JaVale McGee or Vesely. (Not to mention the facts that; a) Lewis has value on the court as a power forward who can shoot and a solid veteran who can help in the locker room, and b) his contract, which expires after the 2012-13 season, is a still-valuable chip for Washington to hang onto for another year.)
In addition, new rules allow teams with cap room to claim players waived under the amnesty provision before they become free agents, using the available room. This was done to keep teams like the Lakers and Heat from poaching talented players like, say, Baron Davis to minimum deals if the Cavaliers opted to use the amnesty on him.
Now, there are teams that will use the amnesty.
The Nets, who need to clear every dollar they can as they pursue the likes of Dwight Howard and try to keep Deron Williams happy (Williams' agent, Jeff Schwartz, said Thursday his cilent would not sign an extension in New Jersey and will join Howard and Paul as free agents next summer) are all but certain to get rid of disappointing forward Travis Outlaw and the remaining $28 million of his contract. Phoenix would surprise no one if it jettisoned the $19 million left on Josh Chlidress' deal. The Blazers may well extricate themselves from toying with the tax threshold this year by erasing Roy's $15 million from their books, especially if his knee problems are not determined to be career-ending -- which would allow insurance to pick up 80 percent of the remaining contract. Maybe the Spurs amnesty Richard Jefferson (two years, $19.3 million remaining) to get under the tax. It's possible.
But amnesty is not going to be utilized league wide to get rid of every bad or overpaid player. Think of it as a scalpel, not a meat cleaver.
Longtime NBA reporter and columnist David Aldridge is an analyst for TNT.
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