Buying out contracts - and the salary cap.

nooooo sir. No way is it that easy. At minimum, the buy out hurts you the next year; in fact I think the buy out just gets the player off the team, but his contract still takes up that cap space it originally occupied.


Jalen Rose, Allen Houston, Chris Webber and so forth were all bought out by their respective teams, and their future figures still hit the cap.

http://www.hoopshype.com/salaries/philadelphia.htm

Ex. Chris Webber agreed to lower his pay 5 mil a season for the final 2 years of his deal (last season, and next season). So that figure still hits the salary cap.


Rafer nor Juwan aren't excepting anything less then they're market value subtracted from what they're getting payed throughout the remainder of the contract.

 

http://www.hoopshype.com/salaries/houston.htm

Juwan is guaranteed 7 mil the next 2 season, and Rafer is guaranteed 5 the next 3. Say Miraculously Juwan agrees to buyout for 10 mil, our cap figure takes a hit of as much money as possible the first season without putting us over the cap, and the remainder the following season. So 5 and 5 is much easier and doesn't strangle you.


Same would go for Rafer.

 

Yes.

No.

No.

http://members.cox.net/lmcoon/salarycap.htm#60

Anyhow, no you can't do a retroactive buyout, and no it doesn't all hit the cap in one year.

Philly bought out Webber because he was a cancer with a massive year left -- there were real savings to be made there even if they bought him out at 90%. You may not like Howard or Rafer, but they're not cancers. Howard only has 2 years left anyhow, and even hypothetically, there's no way you can get Rafer to agree to a buyout under 10 mill -- in which case you save roughly $1.5m a year.

The cost to replace Howard or Rafer (even as backup quality guys) is much more than the possible savings.

 

Ok, then why is New York buying out SF3? I know they are like 50 mil above the cap, so wouldn't it be best just to keep him on the payroll or trade him?

 

NIKEstrad-

I had wondered about this too. Thanks for the clarification. I just wonder why any team would buy anyone out, rather than just cut them.

 

If they agree to a buyout amount less than 100%, you save a few (hundred thousand) dollars.

It's the reason they haven't (yet). Francis is an apparent malcontent there (like Cwebb) and a symbol of Larry Brown - thus, Isiah wants him off the team. His contract is too hefty to trade (without taking on an equally hefty one in return or losing another asset). If they're just going to have him sit on the bench, he takes up a roster spot -- if they can get him to agree to a buyout under his full value (say, $5m per year less), they can save double that considering the luxury tax.

 

Thanks man, you're awesome.

 

buyouts only clear roster space and actual money owed to a player.

In terms of roster salary cap it means nothing. That is why Charlie Ward was on our books until this year.

 

Here is how a buyout works:

The team and player in question agree to a deal which is SOMETIMES for less money than what is owed under the contract to let a player become a free agent. Example Chris Webber's buyout was around $25 million. The original salary still counts toward the cap but the team ends up paying far less money to the player than owed.

 

Actually, I think NY is buying out Francis mostly because he would actually agree to an amount signficantly lower than what he is due. I believe the reports were that he would take $10 million off for the 2 years left on his deal. Since NY is in luxury tax land, that means a $20 million saving.

I don't know if he was a malcontent from the start... in fact, I was in the game Rockets played at MSG and Steve was trying hard to pump the rest of the team up... it was Marbury who was sulking about Steve being there... While Steve Francis was leading a mini-comeback in that game.. Marbury was sitting on the bench with 10 towels draped on his head while some of the young guys were cheering.

That team has problems, with or without Francis.

 

Actually, that's incorrect:

Posted earlier:

http://members.cox.net/lmcoon/salarycap.htm#60


Quote:
The agreed-upon buy-out amount (see question number 59) is included in the team salary instead of the salary called for in the contract. If the player had more than one season left on his contract, then the buy-out money is distributed among those seasons in proportion to the original salary.

 

I heard Rockets need to buy out Sura for $1 Million.
Miss you Bob, but you havent even made it to the bench in 3 years.

They will also probably say goodbye to Deke in order to save some cash

 

Even if a buyout were possible, would doing so not further limit our flexibility?

If you just take Juwan and Rafer right off the books, you are paying a little over $50 million in salary.

That would mean that we lose our MLE and have to fill out the remaining 3-5 roster spots w/ an amount similar to the MLE. Then we get crappier than we are already.

 

A couple of weeks ago I asked if this is possible. Not probable, but allowed by the NBA players association, and was told no. What is the true story?

 

The better option is to keep Juwan one more year and then shop his expiring contract HARD.

Sucks that it's a year away before anything with that can happen, but there is a light at the end of the tunnel now.

 

The true story is that BroadwayB is wrong.

 

This team is good enough to win as it is.

No need to buy anybody out.