Info on Frontloading Contracts
by Michael Gleich on Jul 3, 2009 9:41 AM CDT
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PrintAccording to the NBA collective bargaining agreement, a contract can be decreased by as much as it can be increased annually. So when a team re-signs its own player, it can lower the annual salary by as much as 10.5 percent based off the first year of the salary. When a team signs a player from another team, it can lower the annual salary by as much as 8 percent off the first year on the contract. That is what I mean by frontloading.
So if Milsap was given 10 mil a year in year one by us he could be declined 800K a year so over 5 years he would make 10, 9.2, 8.4, 7.6. 6.8 or 42 million or an avg of 8.4 million. Now if he signed in Utah a 5 year deal with the annual increases allowed he could start at 8 million and get his 10.5% increases and end up with 43.36 million or 8.67 million a year. Now if we were the ones who wrote the contract for millsap and it was a match deal then utah would have to pay it our way, but if we offer a deal like that millsap could turn to utah and go this is what i have tell me what you are going to do kind of like we all do when we walk into 2 car dealerships looking for the best price.
So actual analysis would mean if we did give Millsap the 10 mil next year his total value would be about 1.4 mil more than the general desire of the crew here for us to sign him. Also just read a very important piece that might make the decision moot for Utah or at least much easier. There is talk that Matt Harpring will retire this summer considering all the injuries he has had and if he does that Utah would save 6.5 million in salary next year making the decision on Millsap much easier and the cap and luxury tax penalties much smaller. I think in this scenario they would pay the penalty for one year, let boozer walk in a year, see what they want to do with Okur, especially since in 2 years AK-47's awful deal is off the books.
This post does not necessarily reflect the views of the staff of Welcome to Loud City or SB Nation. However, it was made by one of the members of the Welcome to Loud City community, so there is a large chance the above post is extremely ballin'!
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Great research. I also think the Boozer contract clearing next season is one of the keys for Utah retaining Millsap. I didn’t know about the Harpring situation, good find. I’ve also read something recently saying the Jazz will match any contract that is not crazy. When asked if $10M was crazy a Jazz rep said it was "borderline crazy". If Presti really wants to sign Millsap he’ll need to determine the Jazz’s breaking point. Is it $10M? I don’t know?
Also Known as "4D" one step beyond 3D
well even if presti frontloads at 10 mil
if harpring is coming off with his 6.5 its only really like adding 3.5 over what they expected to pay.
by Michael Gleich on Jul 3, 2009 11:35 AM CDT up reply actions
That would hurt our chances.
By the way Harping’s contract is non-guaranteed so it couldn’t be held against against the team. I just had to double check that detail.
Also Known as "4D" one step beyond 3D
against against against, I just can’t get enough of that word.
Also Known as "4D" one step beyond 3D
well if he retired it wouldnt matter, but i guess you mean if they want to just cut him.
by Michael Gleich on Jul 3, 2009 1:51 PM CDT up reply actions
I think it would (from what I understand)
Any money paid to a player is included in team salary, even if the player has retired. For example, James Worthy retired in 1994, two years before his contract ended. He continued to receive his salary for the 1994-95 and 1995-96 seasons, so his salary was included in the Lakers’ team salary in those seasons. It is at the team’s discretion (or as the result of an agreement between the team and player) whether to continue to pay the player after he has retired.
There is one exception whereby a player can continue to receive his salary, but the salary is not included in the team’s team salary. This is when a player is forced to retire for medical reasons and a league-appointed physician confirms that he is medically unfit to continue playing. There is a waiting period of one year following the injury or illness before a team can apply for this salary cap relief. If the waiting period expires mid-season (on any date prior to the last day of the regular season), then the player’s entire salary for that season is removed from the team’s team salary. For example, in March 2003 the Knicks were allowed to remove Luc Longley’s entire 2002-03 salary from their books (and since the luxury tax is based on the team salary as of the last day of the regular season, the Knicks avoided paying any tax on Longley’s salary). This provision can also be used when a player dies while under contract.
If the player “proves the doctors wrong” and resumes his career, then his salary is returned to his team’s team salary when he plays in his 10th game in any one season (including pre-season, regular season and playoff games). This allows a player to attempt to resume his career without affecting his team unless his comeback is ultimately successful. A team loses this salary cap relief even if the player later signs and plays 10 games with a different team.
Teams are not allowed to trade for disabled players and then apply for this salary cap relief. Only the team for which the player was playing when he was disabled may request this relief.
If a player retires, even for medical reasons, his team does not receive a salary cap exception to acquire a replacement player.
Also Known as "4D" one step beyond 3D
read that more carefully…it says the choice to pay is at the teams discretion. if they dont pay him the salary then it doesnt count.
So you are working of the premise that they are going to pay him if he retires.
by Michael Gleich on Jul 3, 2009 6:06 PM CDT up reply actions
No.
Not since I now know the remaining contract is non-guaranteed.
Also Known as "4D" one step beyond 3D
Two different things
non-guaranteed matters if they cut him which they could do and then he retires. the blurb u posted to say him retiring would stay on the cap assumes they decide to pay him the salary.
by Michael Gleich on Jul 3, 2009 6:30 PM CDT up reply actions
I really hope
Presti wouldn’t go hire than 10 million.
by ElectricPencils on Jul 3, 2009 10:14 AM CDT reply actions
I said hire
I meant higher.
Why can’t we edit posts?
by ElectricPencils on Jul 3, 2009 1:37 PM CDT up reply actions
no i think it is so we have to make additional posts to correct them to get the comment count up…lol
by Michael Gleich on Jul 3, 2009 1:52 PM CDT up reply actions
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