The NBA salary cap is the limit for the total amount of money that the National Basketball Association team is allowed to pay for their players. Like many professional sports leagues, the NBA has a pay cap to control costs, which is determined by the collective bargaining agreement of the league (CBA). This limit is subject to complex rules and exclusion systems and is therefore considered a soft hat and is calculated as a percentage of the league's earnings from the previous season. Under the ratified CBA in December 2011, hats will continue to vary in the upcoming season based on league earnings. For the 2015-16 season, the pay limit is $ 70 million and the luxury goods tax limit is $ 84.74 million. For the 2016-17 season, the salary cap is set at $ 94.14 million and the luxury goods tax limit is $ 113.29 million. For the 2017-18 season, caps are set for $ 99 million for a pay cap and $ 119 million for luxury goods tax.
Video NBA salary cap
History
The NBA had a pay cap in the mid 1940s, but was removed only after one season. The League continued to operate without such hats until the 1984-85 season, when one was instituted in an effort to level the playing field among all the NBA teams and ensure a competitive balance for the League in the future. Before the hat was restored, the team could spend whatever amount they wanted for the player, but in the first season under the new hat, they were each limited to $ 3.6 million in total pay.
Based on CBA 2005, salaries are limited to 57% of basketball-related revenues (BRI) and lasted for six years until June 30, 2011. The next CBA, which came into effect in 2011, sets the upper limit of 51.2% of BRI in 2011. - 12, with the band 49-to-51 in the following years.
To ensure players get their share of BRI, teams are required to spend 90 percent of annual payrolls, the pay floor for the 2016-17 season will be 84.73 million.
In December 2016, league and player unions reached a tentative agreement on a new CBA, with both parties ratifying it at the end of that month. The new deal will run through the 2023-24 season, with each side able to opt out after the 2022-23 season.
Maps NBA salary cap
Soft versus hard caps
Unlike NFL and NHL, the NBA has a feature called soft cap, which means that there are some significant exceptions that allow teams to exceed the pay limit to sign players. This is done to enable teams to retain their own players, who, in theory, cultivate fan support in each city. In contrast, NFL and NHL caps are considered difficult, meaning that they offer relatively few (if any) circumstances in which teams can exceed the salary limit. The NBA version of the "soft" hat, however, offers less leeway for teams than MLB. MLB does allow teams to spend as much as they want for a salary, but it penalizes them a percentage of the amount in which they exceed the soft cap. The percentage increases as the number of consecutive years the team exceeds the growing limit, reset only when the team falls below the limit.
Maximum individual contracts under CBA
The maximum amount of money a player can sign is based on the number of years played by the player and the total pay limit. The maximum salary of players with 6 or fewer years of experience is $ 25.5 million or 25% of total salary (projected for 2017-18), whichever is greater. For players with 7-9 years of experience, the maximum is $ 30.6 million or 30% of the cap, and for players with 10 years of experience, the maximum is $ 35.7 million or 35% of the cap. There are exceptions to this rule: players can sign contracts for 105% of previous contracts, even if the new contract is higher than the league's limit.
The 2017 CBA makes subtle changes to the determination of the maximum paycheck. Under the 2011 CBA, salary limits are based on players who receive 44.74% of basketball-related league revenues (BRI), while the maximum wage calculation uses a lower figure of 42.14% of BRI. This difference was eliminated in 2017 CBA, with 44.74% of BRI being used for caps and maximum wage calculations.
Designated Players
Since CBA 2011, each NBA team has been able to nominate players on a rookie contract to receive a "Designated Players" contract extension. Designated Players are eligible for a 5-year contract extension, rather than being held with a standard 4-year limit. From 2011 to 2016-17, a team can only allocate a single Designated Player contract at any time (if a team has extended a rookie contract by using a Designated Player extension, they can not create a second Designated Player contract until the current contract expires , or until the player moves to a different team); but CBA 2011 allows teams to sign the designated Second Player from teams other than those already owned. All teams are limited to having a maximum of two Designated Players contracted on their list at any time (one that they created from one of their own beginner contracts, and one earned from another team).
Under CBA 2017, the "Designated Players" limit stays at two, but in the new feature, teams can now make Designated Players contracts from their own veteran contracts. In addition, teams can now use their Designated Player slots on any combination of their own rookie contracts, their own veteran contracts, or players earned in the trade.
"Derrick Rose" Rules
The Designated Player coming from his contract may be eligible to get 30% of the paycheck (not the 25% standard) if he passes certain criteria. Through the 2017-18 season, to qualify, players must be selected to start in two All-Star Games, or named Team All-NBA twice (at any rate), or named MVP. Officially titled "5th Year 30% Max Criteria", has been dubbed (and better known as "Derrick Rose Rule" after MVP 2011, due to the fact that when the criteria are introduced, Rose is the only player in the NBA qualified to sign the maximum extension (due to his MVP award).The reason for this rule is to reward extended players of their rookie contracts who are perceived as "caliber" higher than their peers, without limiting them to lower salary levels (25%) A player can sign a "5th, 30th Max" year contract before the last year of his rookie contract and before it meets the criteria required to receive a 30% salary score.If the player fails to meet the criteria prior to the commencement of the Designated Players contract, will receive a five-year contract, 25% set for Standard Players James Harden of Houston Rockets and Anthony Davis of New Orleans Pelicans have a sepe clause that is in the extension of their contract, but both fail to meet the criteria. The only players in the NBA who are trying to qualify for a full 30% contract in 2013-14 are Paul George, who signed a 30%/5 year temporary contract in September 2013. George, who has made the All-NBA third team in 2012-13 , qualify again by making the third team All-NBA.
CBA 2017 changed the qualification criteria for contract "Year 5, 30% Max". Players coming from rookie contracts at the end of the 2017-18 season, or later, must meet one of the following criteria to qualify:
- Selection for the All-NBA team (at any rate) in the player's fourth season, or in two of the three seasons between his second and fourth seasons.
- Selection as the Best Defending Player This year in the fourth season of the player, or in two of the three seasons between his second and fourth seasons.
- Selection as MVP in any season from the second player and so on.
This criterion is similar to the criteria for extension of veteran players introduced in CBA 2017. If this criterion becomes part of the CBA 2011, Rose will still qualify for the 30% contract, as he is in the third season of the NBA when he was named MVP.
5/30% Contract
The following players have signed a 5 year/30% contract:
- Derrick Rose (signed with the Chicago Bulls, then traded to the New York Knicks during last year in the deal) until 2017 (qualified by winning the 2011 MVP award)
- Blake Griffin (signed with L.A. Clippers, then transacted to the Detroit Pistons in 2018) signed until 2018 (qualified by making the All-NBA second team 2011-12 and 2012-13)
- Paul George (signed with Indiana Pacers, having been traded to Oklahoma City Thunder) signed until 2019 (qualified by making the All-NBA third team in 2012-13 and 2013-14)
5/25% Contract
In addition the following players are known to have signed a 5 year/25% contract:
- Joel Embiid (Philadelphia 76ers) until 2023
- Russell Westbrook (Oklahoma City Thunder) until 2017
- Anthony Davis (New Orleans Pelicans) until 2021
- John Wall (Washington Wizards) until 2019
- James Harden (Houston Rockets) until 2018
- Kyrie Irving (Cleveland Cavaliers) to 2020
- Kawhi Leonard (San Antonio Spurs) until 2020
- Damian Lillard (Portland Trail Blazers) up to 2021
Kevin Love qualifies for a designated player contract, but Minnesota Timberwolves opts for a 4-year contract (with a player's year option including, potentially allowing him to become an unlimited free agent) instead. During Kevin Durant's last five seasons with Oklahoma City Thunder (2011-2016), he received a Designated Player level salary. The contract was originally created before the lockout - where the Derrick Rose Rule was implemented - but was formally approved under the terms of the NBA CBA 2005 by the NBA after the lockout. This led some to question whether the Thunder had (with NBA approval) effectively signing two players as Designated Player, as both were contracted for 5 years.
"Kevin Durant" Rules
Provisions in CBA 2017 allowing teams to make Designated Player contracts for their own veteran players, officially known as "Designated Veterans Player Extensions" (DVPE), later called "Kevin Durant Rules" because they are considered in reaction to a wave of veteran superstars who left their team at free agent, closed by Durant's departure from Thunder to Golden State Warriors in 2016 offseason. CBA 2011 allows all teams that try to lure Durant to offer the same starting salary of $ 26.5 million.
For a veteran player who qualifies for such an extension, he or she must enter the eighth or ninth season in the NBA, and have:
- make the All-NBA team (at any level) in the season either before signing an extension, or two of the previous three seasons;
- has been named the NBA Player of the Year this year either before signing an extension, or two of the previous three seasons; or
- has been named the NBA MVP at least once in the past three seasons.
In addition, the team offering the extension must initially design the player, or get it in the trade while he is on his rookie contract.
Eligible players can be offered a contract with an initial salary of between 30 and 35% of the pay cap. The extension may not last more than five years after the expiration of the current player's contract (or five years for players who are free agents when signed), but can be negotiated and signed one year before the current contract expires. An extension can be offered to the team's own free agent as well as the player with the remaining time on his contract. In addition, once a player signs DVPE, he can not be traded for a year.
Ironically, while the rule was meant to encourage star players to stick with their current team, the first major step by the NBA team involving players eligible for DVPE was Kings Sacramento 'trade from DeMarcus Cousins ​​to New Orleans Pelicans during the 2017 All-Star break. Cousin contracts with Kings will not end until 2018, but he is eligible to sign DVPE after the 2016-17 to $ 209 million for five years, a financial commitment that the Kings do not seem to want to do.
Players eligible for DVPE
After the 2016-17 All-NBA team's announcement, four players are eligible to sign the DVPE contract during the offseason 2017 season. All four were summoned to one of the three All-NBA teams for the season; two already qualified under the new criteria.
- Stephen Curry, Golden State Warriors (meet the DVPE criteria before the 2016-17 season)
- James Harden, Houston Rockets
- John Wall, Washington Wizards
- Russell Westbrook, Oklahoma City Thunder (meets DVPE criteria before season 2016-17)
Harden and Westbrook will not be eligible under the standard DVPE criteria because they signed extensions to their contract in 2016 offseason, Harden for two years and Westbrook for one. Unions and player owners negotiate a special dispensation that allows them to sign a DVPE contract if they qualify.
The newest player eligible for the DVPE contract, also known as the "supermax" contract, is Anthony Davis, who has played his entire NBA career to date with New Orleans Pelicans. He qualifies by being named to the first All-NBA team in 2017-18, allowing Pelikan to offer a five-year extension worth up to $ 230 million, effective with the 2019-20 season.
DVPE contract
The first player to sign a supermax contract is Stephen Curry, who approved a new DVPE five year deal with Warriors, worth $ 201 million, which runs through the 2021-22 season. Curry signed the contract after the moratorium on the free agent of the NBA ended on July 6, 2017.
Shortly thereafter, James Harden approved DVPE with the Rockets. At the time of signing, his current contract has two years remaining with a total salary of $ 59 million; the extension will add $ 170 million over four seasons, ending in 2022-23.
The next supermax signing is from John Wall, which was agreed later in July for a four-year extension, $ 170 million to begin in 2019-20. In late September, Russell Westbrook became the fourth and final supermax signing of the 2017 offseason, signing a five-year, $ 205 million five-year deal that will start in 2018-19.
Exceptions
Because the NBA's pay cap is soft, the CBA allows for some important scenarios where teams can sign players even if their salary exceeds the limit. Exceptions are as follows:
Mid-level exclusion
Once a year, teams can use middle-level exclusions (MLE) to sign a contract player for a specified maximum amount. The number of MLE and its duration depend on the team's cap status. In the 2017 CBA, MLE was initially set at $ 8.406 million in the 2017-18 season for teams that exceeded the limits either before or after signing, but under the luxury tax apron, set at $ 6 million above the tax line. Teams can use this exception to offer up to four year contracts. The team above the apron has an MLE originally set at $ 5.192 million, enabling a contract of up to three years. The team with cap room, which is not eligible for MLE before CBA 2011, has MLE initially set at $ 4,328 million allowing a two-year contract. In the next season, all MLE amounts will be determined by applying the percentage change of the paycheck to the previous number of exceptions.
Prior to CBA 2011, MLE equals the average NBA salary for all teams above the hat; teams with hat halls are then not eligible for MLE. The Medium-Term Exception for the 2008-09 NBA season was $ 5,585 million. MLE is $ 5.854 million for the 2009-10 NBA regular season.
Under the 2017 CBA, the apron was initially set at $ 6 million above the tax line for the 2017-18 season. In the new feature, the apron will change from season to season, with percentage change (up or down) set to half of the level of change of lid for the season.
Bi-annual exclusion
The current bi-annual exclusion can be used by teams under aprons to sign free agents for contracts starting at $ 3.29 million. Just like middle-level exclusions, bi-annual exclusions can also be shared among more than one player, and can be used to sign players up to two years; the increase is initially limited to 8% per year, but in 2017 CBA is limited to 5%. This exception is referred to as a "$ 1 million exception" in the 1999 CBA, even though it is worth $ 1 million just for the first year of the agreement.
An example of a bi-annual exclusion is the signing of the Los Angeles Lakers from Karl Malone to the contract before the 2003-04 season.
Exclusions are eliminated for teams above the tax apron after NBA lockup 2011 as many high spending teams use this as a tool to get the highest paid players.
A team can not use this exception in a few consecutive years; teams that use it in 2016-17 (under CBA 2011) can not use it in 2017-18 (under 2017 CBA). It also can not be used by teams that have used MLE in the same season. Additionally, once the team uses bi-annual exclusions, the tax apron becomes a hard pay hats for the rest of the season.
Rookie Exceptions
The NBA allows teams to sign their first-round draft options to "scale" rookie contracts even if their salary exceeds the limit.
Two-way contract
CBA 2017 introduces a two-way contract between the NBA team and players in the NBA G League (formerly D-League). Prior to CBA 2017, all D-League players were contracted directly with the league, and all D-League players could be summoned by the NBA team, regardless of whether they were affiliated with the D-League players team. Now, any NBA team can sign two players for a contract that allows them to assign players to League G without the risk of being "hunted" by other NBA teams. The players who signed the contract benefited by receiving much higher salaries than any other G League player while in the league, and getting a share of the minimum NBA rookie pay for each day with their contracted NBA team. Salary of two-way players is not included in the calculation of salary. In addition, a team can change a two-way contract into a standard NBA contract at any time, with player salaries being the NBA minimum for player years, the prorata of the conversion time; the converted contract is also not counted in the stamp calculation.
Larry Bird exception
Perhaps the most notable exception of the NBA payroll cover is the Larry Bird exclusion, so named because the Boston Celtics are the first team allowed to exceed the salary cap to sign back one of their own players (in this case, Larry Bird). Free agents eligible for this exception are called "free eligible veteran free agent" or "Bird Free Agent" within the CBA, and these exceptions are under the terms of the Veteran Free Agent exemption. In essence, the Larry Bird exception allows the team to exceed the pay limit to re-sign their own free agent, with up to the maximum amount of salary. In order to qualify as a Bird free agent, a player must play three seasons without being released or change the team as a free agent. Players claimed after their amnesty, their Bird rights are transferred to their new team. Other players who claim not to be eligible are not eligible for the full Bird exclusion, but may be eligible for an early Bird exclusion. Prior to the arbitrator's decision in June 2012, all players who were freed and changed the team lost their Bird rights. This means players can earn "Bird rights" by playing under three one-year contracts, a single contract of at least three years, or a combination thereof. It also means that when a player is traded, his Bird rights are traded with him, and his new team can use Bird's exception to re-contract it. Since CBA 2011, the bird exclusion contract can be up to five years, down from six under the 2005 CBA.
Exception of Early Bird
The lower form of Larry Bird exception is the "Early Bird" exception. Free agents eligible for this exception are called "free qualifying veteran early agent", and qualify after playing two seasons with the same team. Players who are traded or claimed to be free from transferring their Bird rights are transferred to their new team. Prior to the arbitrator's decision in June 2012, all players who were freed and changed the team lost their Bird rights. With this exception, a team can re-sign its own free agent, either 175% of its salary the previous season, or the NBA average salary, whichever is greater. Early Bird contracts must be at least for two seasons, but can last no more than four seasons. If a team agrees with a trade that will make the player lose First Rights, he has the power to veto the trade.
A widely publicized example for this is Devean George, who vetoed inclusion into a larger trade during the 2007-08 season that will send him from the Dallas Mavericks to the New Jersey Nets.
Non-Bird Exclusion
"Free unqualified agents" (those who do not qualify under the exception of Larry Bird or the exclusion of Early Bird) are subject to non-Bird exclusions. Under this exception, teams can re-sign players to contracts starting from 120% of their salary for the previous season, or 120% of the minimum salary of the league, whichever is higher. Contracts signed under Non-Bird exclusions may last up to four years (down from six under the 2005 CBA).
Minimum Salary Exception
Teams can register players for minimum NBA salaries even if they are above the cap, up to two years in length. In the case of a two-year contract, the salary of the second season is the minimum salary for the season. The contract may not contain signature bonuses. This exclusion also allows minimum wage players to be acquired through trade. There is no limit to the number of players that can be signed or obtained using this exception.
Traded Player Exclusion
If the team trades players with a higher salary than the players they get in return (an agreement hereafter referred to as "Trading # 1"), they accept Traded Player Exceptions, also known as "Trade Exclusions". Teams with the exception of trades have up to a year where they can earn more salaries in other trades (Trades # 2, # 3, etc.) than they send, during the salary breaks for Commerce # 2, # 3, etc. less than or equal to the salary difference for Trade # 1. This exception is particularly useful when teams trade draft picks directly to players; because the draft picks have no salary value, often the only way to earn a suitable salary is to use a trade exclusion, which allows trading to be done even if the salary is unbalanced. It is also beneficial to compensate teams for losing free agents, as they can sign and trade from free agents to get exemptions on trades that can be used later. Note this exception is only for single player trading, although additional cash and drafts can be part of the trade.
Players Exclusion
Allow a team that exceeds the limit to get a replacement for a disabled player who will be out for the rest of the season (for seasonal injury/death) or next season (if disability occurs during offseason). The replacement's maximum wage is 50% of the injured player's salary, or middle-level exclusion for teams that do not pay taxes, whichever is less. This exception requires an NBA-appointed doctor to verify the extent of the injury. Under the 2005 CBA, a team can sign players under this exception for five years; since CBA 2011, is only allowed for one year.
Note that while teams can often use one exception to sign multiple players, they can not use a combination of exceptions to sign a single player.
Reinstatement
A player who is banned from the league for a drug-related offense recoverable can be re-signed by the previous team for salary up to previous salary.
Free agent
There are two types of free agencies under the NBA Collective Bargaining Agreement: Unlimited and Restricted .
Unlimited free agent
Free agents are not free to sign up with their chosen team.
Free free agent
The free agent is limited subject to Right to First Refusal of his current team, which means that the player can be signed to the bid sheet by another team, but his current club has the right to match the offer and keep the player. Offer sheet is a two-year contract offer made by another team to a limited free agent. Player clubs currently have three days to match offers or they lose players to new teams; CBA before 2011 is allowed seven days.
For the first round of drafts, limited free agents are only allowed after the team runs its choice for the fourth year, and the team makes Qualifying Quotes on the Rookie scale after the fourth year is over. For other players to become unlimited free agents, he or she should be the most NBA veteran of three years, and his team must make a Qualifying Quote of either 125% of the previous season's salary or minimum wage plus $ 200,000, whichever is higher.
The team is limited in what ways they can offer free agents that are not tied to two years or less. The maximum first year paychecks in the offer sheet are middle-level exclusions. Second year salary can be increased by a maximum of 4.5%. The third year's salary is limited to the maximum that the team has on their pay cap. Salaries in the fourth season may increase (or decrease) to 4.1% of salary in the third season. The offer sheet can only increase in the third season if it gives the highest allowable salary in the first two seasons, the contract is fully guaranteed, and contains no bonus. The player's original team can use the Early Bird exceptions or their Mid-Level exclusion to re-sign players.
If the third season's increase is greater than 4.5% from the first year, the bidding team must be able to adjust the overall average contract below their limit. Through the 2016-17 season, accounting is different for the player's original team, where the player's salary for a given year - not the average contract - is calculated against the hat. In some cases, the bidding team can take advantage of the gap to create what is called a poison pill for the player's original team, potentially forcing the original team to pay luxury taxes in the third season, as the Houston Rockets do to sign Jeremy Lin and ÃÆ'-mer A ?? k of the New York Knicks and Chicago Bulls, respectively. This can prevent them from matching the bid sheet.
CBA 2017 changed the accounting rules for the player's original team in this scenario. If the original team matches, and has sufficient hat space to absorb the average annual salary of the bid, it may choose to take either a stamp of actual contract payments or the contract average in each season.
Prior to the 2005 CBA, the original team could only use exceptions to sign back players who had drawn up in the first half. The 2005 CBA allows teams to use exceptions on non-first-round picks, with an extension named "Gilbert Arenas Rule". In 2003, Gilbert Arenas, who had become a second-round choice in 2001, signed a six-year, $ 60 million contract with the Washington Wizards after his Golden State Warriors team could not match the offer as they had ended a pay cap.
July moratorium
Players in the team's final season list remain under contract with their respective teams until the start of a free body on 1 July. During the period in early July, teams can start negotiating with free agents, but trading can not be done and most free agents can not be signed. Closed wages for the coming year are not fixed until the league audit is completed at the end of the period. The contracts allowed during this period are limited to:
- A beginner-scale contract for the first round of draft options.
- The second round of drafts can receive the required tender, which is the one-year contract that the team has to offer to defend its rights against the player.
- A limited free agent may receive a qualifying offer from the previous team.
- Limited free agents who complete the fourth season of the beginner-scale contract can receive maximum qualifying offers. The actual amount is not specified until the end of the moratorium.
- The team can sign a one or two year contract player for the minimum wage.
During the moratorium, the team was limited to comment on the offer. The contract may be signed after the moratorium expires.
Cap hold
The termination of a free agent contract does not remove it from the team cap calculation. During the free agency period (from 1 July until the player signs a contract with the team, or a former free agent team that announces the rights), every agent is free to charge a set salary fee for his last team, most often called "freezing hat". Typically, the cap holder may be no more than the player's maximum salary, or less than his minimum wage, by year of work. The only exception is for the free agent who made the minimum wage in the previous season; if the league returns the team for a portion of his salary in the last season of his contract, the replacement is not counted within the upper limit. Regardless of these restrictions, hat hats vary by free agent status and salary in previous seasons:
- Bird free agent:
- If not from a beginner-scale contract, and a salary above or above the average salary forecast, 150% of the previous salary.
- If not from a beginner-scale contract, and a salary below the average salary forecast, 190% of the previous salary.
- If coming from the fourth season of a beginner-scale contract, and a salary above or above the estimated average salary, 200% of the previous salary.
- If coming from the fourth season of the beginner-scale contract, and the salary below the estimated average salary, 250% of the previous salary.
- If coming from the third season of a beginner-scale contract, the maximum amount the team can pay under the exception of Bird.
- Early Bird:
- If coming from the second season of the beginner-scale contract, the maximum amount the team can pay under the exception of Bird.
- Otherwise, 130% of the previous salary.
- Not Bird: 120% of previous salary.
CBA 2017 will increase some of the upper limit of those found in CBA 2011 as follows:
- Unlisted first-time draft taking: 120% beginner scale (up from 100%)
- Free bird agency (in season 2018-19):
- If coming from the fourth season of the beginner-scale contract, and the salary is at or above the average salary forecast, 250% of the previous salary (up from 200%).
- If coming from the fourth season of the beginner-scale contract, and the salary below the average salary forecast, 300% of the previous salary (up from 250%).
Rookie pay scale
The first round draft options are paid according to their draft position. The entire first pick receives more than the second pick, the second more than the third, and so on. Each contract is for two years, with team options for the third and fourth seasons (CBAs before 2011 awarded for a three-year contract with options for the fourth season), with built-in rides each year to offset the average pay rise. A team can choose to go beyond the rookie scale for an established player who is not named so they retain their draft rights three seasons after the draft. The contract will last for at least three seasons, with a maximum value up to the team's available hood space.
In 2017, the scaling scale for votes is as follows:
The second round is not subject to scale, and technically can be paid anywhere from minimum to maximum contract amount. In practice, they rarely receive more than the minimum.
Prior to CBA 2017, rookie scales for each season were negotiated into the agreement. For the current agreement, only the beginner scales for the 2017-18 season are predetermined. In the following season, a percentage change in the payroll hat will be applied to all dollar amounts in the previous season's scale. The amount expressed as a percentage of salary, such as allowable salary changes from the third to fourth season of the rookie contract, remains the same from season to season.
Options
Many NBA contracts are drawn up with options for players or teams. An option only gives the party that controls the right option to extend the contract for another season with a salary not less than the previous year amount.
Sign and trade agreement
When a team is willing to sign an upcoming free agent, but the current team of players wants something in return, it may be in the best interests of both clubs to sign a sign-and-trade agreement. This happens when a team signs one of its free agents and immediately trades the player to another team. Sign and trade is useful for players and teams; the player receives a larger contract than he normally gets from the team he wants to play, while the trading club gets something in return for a free agent, and the trade receiver gets the player they want. Sign-and-trades are a reality in the NBA because the CBA rules: unlike baseball, where teams lose free agents compensated by draft pick or cash, NBA teams that lose free agents do not receive compensation.
When the team initiates a signature and trade agreement, it must immediately swap signed players; teams can not deny arrangements and keep players to themselves, using other team's financial situation to leverage those who enter into a more lucrative deal for themselves. Also, contracts signed before trading should be for at least 3 years, with first year guarantee. Due to the length requirements of the contract, the signatory team can not use exceptions that can not be used to offer a contract for 3 years or more.
Since CBA 2011, signed players must be on the previous team list at the end of the last regular season. Previous agreements allow teams to sign and trade every player they hold on the rights of the Bird, which does not automatically disappear with the player's pension - for example, in July 2012, the Los Angeles Lakers still holds Bird's rights to John Salley, who has not played since 2000. In the 2007-08 season, two teams used a mark-and-trade on players who had quit the league. The Dallas Mavericks signed Keith Van Horn from retirement as part of the package to get Jason Kidd, and the Lakers did the same with Aaron McKie to facilitate their deal for Pau Gasol.
CBA 2011 places further restrictions on the sign-and-trade, with these restrictions being retained in the 2017 CBA. Since the 2013-14 season, the payrolls of the receiving team can not exceed the so-called "apron" (in 2017-18 set at $ 6 million above the tax line) as a result of trading, and teams that have used MLE taxpayers can not accept players in signs and trades in that season. In addition, aprons become hard pay hats for the first season after signing. The team above the apron before the trade can not accept players unless the trade leaves the team under the apron.
Over-38 Rules
The cap also includes provision to close a potential gap that will provide incentives for the team to round the hat by signing an older player to a long-term deal that will not end until after the team expects the player to retire. Analyst Cap Larry Coon outlines how this potential gap will work:
For example, suppose the Non-Taxpayer Primary Rate exclusion is $ 9 million. With a 5% increase, the three-year contract will amount to $ 28.35 million. But if they add a fourth year to the contract, the salary will amount to $ 38.7 million. If the player retires after three seasons and continues to withdraw his salary for the additional season, then he will be paid $ 38.7 million for a three-year job. In essence, they gave players a three-year contract with additional deferred compensation.
To solve this problem, CBAs since at least the 1990s have incorporated what is now called "more than 38 rules", in which certain contracts that surpass the 38th anniversary of a player are considered to cover the season after the player's expected retirement. The age threshold that triggered this rule was originally set at 35, changed to 36 in CBA 1999, and changed again to 38 in CBA 2017. Salaries for the years coming after the 38th anniversary of the player are considered as deferred compensation, and are shifted for the purpose of hats to season under 38 seasons of the deal, with over 38 years (s) being referred to as "zero years" in the CBA. If the player continues to play under the deal (proving wrong retirement presumption), the salary originally treated as deferred is distributed evenly over the remainder of the contract year, starting with the second season before zero year. This rule has become a bigger problem before the CBA 2011, which limits the maximum length of the contract up to 5 years.
While the threshold age is changed in 2017 CBA, the rules mechanism remains the same. In particular, some members of the union's executive committee at the time when the CBA 2017 was negotiated were older players who were seen as potential beneficiaries of the change to rule above 38. For example, a change to rule 38 gave Chris Paul's union president, who was scheduled to become a free agent after season 2016-17, potential profit of nearly $ 50 million over the next contract period. Similarly, members of the executive committee of LeBron James and Carmelo Anthony, who can opt out of their current contracts after the same season, have the same profit potential as these changes.
Trading and payroll
- Teams under a salary cap can trade regardless of salary, as long as they do not end up more than $ 100,000 above the cap after trading.
- The team is above the limit (or the team is below the limit but will end up more than $ 100,000 because the hat after the trade) can not earn more than 125% plus $ 100,000 of the salary they are trading. Under CBA 2011, teams that remain below the luxury goods tax threshold even after trading can earn a lower than 150% plus $ 100,000, or 100% plus $ 5 million, of their traded salary. There is no lower limit - teams can break away from the salary as much as they want (or can convince other teams to do) in the trade.
- No free agent signed in the tradable offseason until December 15 of that year or up to three months has elapsed (whichever comes later), a rule that prevents the team from signing a free agent with a view to using it strictly as a trade cattle fodder. For draft taking, this moratorium lasts for 30 days.
- If teams gain players in the trade, they are allowed to trade the player directly to other individual players immediately. However, if the team wants to pack the player with another player and trade, they have to wait 60 days before doing so.
The strict matching rules of salary from CBA 2005 often require the so-called NBA hat analyst Larry Coon's "trade ballast" - additional players added to the deal solely for matching salaries, which would normally be waived by their new team. Under the CBA, such players are forbidden to rejoin their original team for 30 days during the season or 20 days at the end of the season. This led to what Coon called a "wink-wink deal in which players traded in full hope to return later." A real example of such a deal takes place in the 2009-10 season, where Cleveland Cavaliers incorporate Zydrunas Ilgauskas in their trade with the Washington Wizards for Antawn Jamison. Ilgauskas was released a week later without ever appearing in the game for the Wizards, and was re-signed with Cleveland after the 30-day waiting period passed. Under CBA 2011, players earned in trading and freed by his new team can not sign back with his original team until one year after trading or July 1 after the end of his contract, whichever is sooner.
Year base compensation
Certain players in the first few months of the new contract are subject to basic year compensation (BYC). The purpose of BYC is to prevent teams from re-signing players to specially targeted salaries to match other salaries in trade (in other words, salaries should be based on the value of basketball, not trading values). The trade value of BYC players as outgoing salaries is 50% of their new salary, or previous salary, whichever is greater. BYC only applies to players who re-sign with previous teams and receive a pay raise greater than 20%. This also applies only when (and during) the team has a paycheck. Under CBA 2011, players subject to BYC can not be traded before January 15 except in signs and trades, and BYC applies only to outgoing salaries in sign and trade transactions.
Exemptions
The NBA team can pull players into a waiver wire, where he can stay for 48 hours (during the regular season). When he is in disobedience, another team may claim him, for an existing salary. If he is not claimed, he is said to have "cleared out", and is treated like a free agent, can log in with any team (with the above-mentioned special restrictions for trafficked players and then freed).
Players released after 1 March are not eligible to be on the team's playoff list. The deadline is March 23rd during the shortest 2011-12 season.
Released players
Players who are freed/freed on contracts are guaranteed to continue to be included in the previous team's payroll. Players whose contracts are guaranteed are included in the team's salary in the amount they make while they are with the team. Players on unsecured "summer contracts" are not included in team salaries unless they make regular season listings.
If another team signs a released player who has a guaranteed contract (as long as the player has waived), the player's original team is allowed to reduce the amount they still owe (and lower their team salary) on the right. from set-off. This is true if a player signs a contract with a professional team - does not even have to be an NBA team. The number of original teams can be set limited to half the difference between the players' new salary and the pro-rata portion of the minimum wage for a one-year veteran (if the player is a rookie, then the minimum rookie is used instead).
Stretch setting
Both CBAs 2005 and 2011 contain so-called "stretching" provisions regarding the payment of a security deposit to free the player and its effect on the salary cap; 2011 provisions are retained in CBA 2017.
Under CBA 2005, players and teams can change the payment schedule to free players by mutual agreement. The remaining guaranteed salaries are equally dispersed in the remaining years of the player's contract.
CBA 2011 dramatically changed this regime. While contracts signed under the 2005 CBA remain under the original scheme, different rules apply to contracts signed since CBA 2011 entered into force. Today, when a team frees a player, he can spread the remaining guaranteed salary (and his hat) more than double the rest of the contract, plus a year. According to Coon, "if the team has a poor performer with one season left at $ 12 million, the team can free him and stretch his salary in three seasons with $ 4 million per season."
Amnesty clause
The NBA Amnesty Clause provides a franchise how to release contractual obligations to players whose performance is far from the enormous salary they initially agreed to pay for. Under the 2010 Joint Agreement (CBA) Agreement, each franchise is allowed to release one player prior to the start of any season between the 2011-12 and 2015-16 seasons. The remaining salary still contracted by contract will be not inserted in the salary cap or luxury tax of the team that terminates its work. Only players marked before to the 2011-12 season can be "awarded". The clause can be done for seven days after the July NBA moratorium period on player transactions. Clause provisions allow rival teams to claim amnesty players with significantly reduced salaries (often, dramatically); the waiver team should only pay the remaining balance players. The team with the highest bid acquires players. If not claimed, players become free agents. The team above the salary cap can only get the amnesty player if he becomes a free agent and the offer will be limited to the veteran minimum contract.
Under the 2005 CBA, one player may be released before the start of the 2005-06 season and is not counted for luxury goods taxes. Unlike CBA 2011, players are still counted under the salary cap. The 2005 amnesty provocation was mockingly called the "Allan Houston Rule", but his team, the New York Knicks, really did not use the size in Houston - they applied it to Jerome Williams because Allan Houston then retired under the medical circumstances of the same season. Ironically, Jerome Williams will also retire from the NBA just two days after being under the amnesty clause for the Knicks that season.
- Notes
Luxury taxes
While soft hats allow teams to exceed unlimited pay limits by re-signing their own players using the "Larry Bird" exclusion family, there are consequences for exceeding the limit with large numbers. A luxury tax payment is required from teams whose payments exceed a certain "tax rate", which is determined by complicated formulas, and teams exceeding that are punished by being forced to pay a bracket-based amount for each dollar whose payments exceed the tax rate.
While most NBA teams hold contracts that are judged to exceed the salary limit, some teams have payroll lists at the luxury goods tax rate. The tax threshold in 2005-06 was $ 61.7 million. In 2005-06, the New York Knicks salary was $ 124 million, placing them $ 74.5 million above the salary cap, and $ 62.3 million above the tax line, which Knicks James Dolan owners paid into the league. Tax revenues are usually distributed evenly among teams that do not pay taxes, so there is often a few million dollar incentive for owners to not pay luxury taxes.
The luxury tax rate for the 2008-09 season was $ 71.15 million. For the 2009-10 season, the luxury goods tax rate was set at $ 69.92 million. The luxury goods tax rate for the 2010-11 and 2012-13 NBA seasons is $ 70,307,000.
CBA 2011 instituted major changes to the luxury goods tax regime. The CBA previously had a dollar-for-dollar tax system, which remained in effect during the 2012-13 season. Teams that exceed the tax rate are punished by being forced to pay a dollar to league for every dollar where their salary exceeds the tax rate. From 2013-14, taxes are changed to additional systems. Under the current system, taxes are valued at different rates based on the number of teams that exceed the luxury goods tax threshold. This scheme is not cumulative - any tax rate only applies to amounts above the threshold. For example, a team worth $ 8 million more than a tax threshold would pay $ 1.50 for every $ 5 million on tax thresholds first, and $ 1.75 per dollar for the remaining $ 3 million. Starting 2014-15, "repeat offenders", subject to additional penalties, are defined as teams paying taxes in the previous season. In the first season, the relapse villain from all three previous seasons will pay higher tax rates; from 2015-16 afterwards, teams that pay taxes in three of the four years will be subject to a higher repeater rate. As in the previous CBA, tax revenues were shared among teams with lower salaries. However, under the new scheme, no more than 50% of total tax revenue can be exclusively for teams that do not exceed the limit. The initial report did not mention the remaining 50% usage based on CBA 2011, but it was later confirmed that this amount would be used to fund revenue-sharing for the season when taxes were paid.
For the 2013-14 season, the luxury goods tax threshold is set at $ 71,748 million. The Brooklyn Nets, whose wage list for the season is projected at over $ 100 million, will face a luxury tax bill of over $ 80 million, resulting in a total payroll fee of $ 186 million.
Tax rate from 2013-14
Note
References
External links
- NBA Salary Cap FAQ by Larry Coon
Source of the article : Wikipedia
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