I'd love for someone to school me on the ins and outs of a front loaded contract in the NBA. What are the CBA restrictions on them? People talk about stealing RFAs by offering a front loaded contract, but I don't understand why that is an issue as (far as I understand) the contract is always averaged out in terms of total value. Why are they non-existent (the only instance I can think of was a "faux" front-loaded deal with Nick Collison that was not even a part of his contract but rather a bonus)? I also know that there are certain contracts that roll back, but at a very insubstantial pace. IF the Rockets don't see anything interesting on the market, could they not offer substantially front loaded deals to Dragic and Lee (I know, UFA and RFA) to increase the likelihood of signing them long-term but having a very manageable cap number moving forward?
For the most part, you're correct. The CBA limits raises/lowering of salary in consecutive years by 4.5% of the first year salary for non-bird free agents. Thus, you're not going to have something crazy like a $14M year 1 salary and a $2M year 2 salary. The only way that a team can "front-load" a contract is by offering a signing bonus, equivalent to 15% of the total guaranteed money in the deal (10% if it's an offer sheet to a restricted free agent). The signing bonus is spread evenly over the deal for cap purposes, but the matching team still has to pay the money right away in the first year. Additionally, you can accelerate the pay-structure of the contract to require the entire year's salary to be paid up front. If you're a struggling franchise that has cash flow problems, this is a tough pill to swallow. Here's an example of Portland trying to do just that in order to sign away Paul Millsap from the Jazz: And the Blazers being successful in this tactic a year later: Portland might be the only team that can actually utilize this tactic, since Paul Allen has virtually unlimited cash reserves. I can't think of any other franchise that simply sits on $15M+ that can be ready in a few days ordinarily.
^ Very much appreciated. Based on these limitations, it does seem fairly unlikely that the Rockets could/would be able to leverage an instance of paying an entire year's contract + signing bonus up front. It seems like even less of an advantage when one of the larger predators on the FA market (Portland) is a team who has employed this very tactic multiple times. It seems that all I have these days are pipe dreams.
You can, but again, it would only be a maximum of 4.5% decreases per year; so at best the last year salary is 13.5% less than the first year. I think that generally agents will discourage players from taking descending deals; since extensions are based on the last year of a deal, you obviously want that number to be the biggest, and I doubt any player really wants to (ostensibly) get better over time as they reach their prime, yet lose more and more money. It also doesn't really help out the teams that much; in order to get a free-agent to agree to a descending deal, they'll likely have to give out extra cash in year 1; this means less cap room for signing other deals.
It would look exactly the same from the fan's perspective. The only difference is how big a check Les has to sign up front when Parsons signs the deal.
