1. If McGrady is bought out and then comes back to play for somebody else, how is the insurance dollars paid out? 2. If McGrady is traded, who receives the insurance dollars and when? Are the Rox already receiving insurance dollars right now? Or is the insurance payment made at the end of the season to the team that is holding his contract? My understanding is McGrady's value as an expiring is twofold: 1. It is expiring. Some team can trade for him, dump a ton of salary, and start over. 2. It is covered by insurance, so whoever trades for him gets to take advantage of insurance paying his salary. But is that retroactive? For instance, if New Orleans decides to clean house and start over and they agree to trade Peja or Okafor along with Chris Paul for McGrady and Brooks.......do they get to receive the insurance dollars for 80% of McGrady's 2009-2010 salary of $23.2 million or do they simply get a prorated share of the insurance payment for every game he is on their roster and does not play? And then what happens if they buy him out at a reduced level? Do they lose all the insurance money? Or if he signs and plays with another team this season after he is bought out............does the team that released him and agreed to a buyout with him still get insurance money? IF.......................the insurance money from McGrady's 2009-2010 salary of $23.2 million goes to a team that trades for him.................then he should be worth a couple of superstars and a first rounder. For instance, a team like Washington, if they are losing money, which I understand they are, should be willing to give up 2 guys, like Arenas and Antawn, along with their 2010 first rounder, in order to save all that money and get the insurance money. How does the insurance money work and is it retroactive transferrable to a trading team and what happens to the insurance money if McGrady agrees to a buyout?
1. If I'm not mistaken , if Mcgrady is bought out by the team then insurance doesn't refund the money . So the amount to which the buyout is agreed will have to be paid in full by the rockets . 2. From what I've read , it seems that the team is already receiving insurance money for all every game that T-mac is missing , hence the 'Insurance Fraud' story . Yes another team can beneficiate from the insurance but only the number of games that t-mac will miss. Sorry if i didn't answer all your question but I'm a bit tired after work so didn't want to so some search or read all of your post . sorry mate
I don't know anything about the insurance contracts, obviously, but I would think the above 2 answers are reasonable assumptions.
bumping this back up........C'mon these threads were really informative back in the day and considering Tracy's contract,I want to hear some more from Aeilliot and others.
The problem is, this thread does not call for "capologists". It calls for someone with expert knowledge of how insurance contracts on NBA players work. I am not sure whether the NBA has a standard form of insurance policy with one or more insurance underwriters, but my guess is that such policies are specifically tailored. Frankly, while we fans can always easily find out a player's NBA salary, the terms of an insurance policy are maybe a little more private. This is not a cap issue. It's an insurance issue. My guess is that you'll have to ask either the Rockets' front office or the actual insurance underwriter if you want to get all the facts straight on that one.
I believe the insurance transfers with a trade, yes. There were lots of articles about it in the Chronicle and how it made him and his contract more valuable. DD
Excellent. People post here about the insurance as if they have knowledge. I'd bet the policies have so many clauses/and so varied player-to-player that lawyers can have a great career just vetting one.
Buy him out, you buy him out - insurance covers none of that. Insurance pays out the contract game check to game check (or via reimbursement), so Rockets pocket the money for every game McGrady is listed as a Rocket. If he's traded, the new team picks up only the money for the games he is with them (and unable to play - which is a very unlikely scenario). The most beneficial scenario for the Rockets is to keep McGrady off the court until he is ready to go full tilt. As soon as he returns, insurance checks are finished. If he goes in and out of the lineup like last year, insurance does not pick up the tab for the games he sits. Additionally, McGrady will hurt his trade value if teams are concerned over his ability to go the remainder of the season. Let McGrady sit for a couple more weeks, get enough insurance checks to offset this year's luxury tax, bring back McGrady off the bench around Christmas, trade him at the end of January if possible. Evan
