Is there anyway we could restructure....

Nope, nothing to do about it. His contract is only for 2 more years anyway, so it's not like they'll be saddled with it for long.

The only way he would help us as far as signing FA's go is if he had another season ending injury, then we could get an exception similar to the one we got for Mo's injury.

His contract will still count against the cap even if he retires. And no, I don't believe you can restructure deals in the NBA.

Personally I think he'll come back strong next year. Not all-star Charlotte strong, but be a valuable contributer nonetheless.

 

Crisco, how sure are you on this point? Unlike yourself, I am not convinced Rice will even return to a remote resemblance of what he was as recently as his last Knicks game.

I believe there is one other possibility but Rice would have to agree to it. His remaining contract value is between $19m and $21M for 2 years. If Rice comes to the conclusion that he can't go, he could let the Rocks buy out his contract for say...$6m lump sum. This $6m would then hit the Rockets cap at $3/year.

In this scenario, the Rockets diminish Rice's 2002-2003 hit by nearly $7m. RealGM has the Rockets committed to $44m for 2002-2003. Take out the $7m and the commitment becomes $37m. If the cap remains constant at 42.5, this is still more than the MCE. If the cap goes up to say $44M, then the Rocks have $7m in FA $...possibly enough for Rashard or?

I guess my scenario depends on whether Rice prefers the monthly payments or the cash value option.

Sorry for the lengthy post...I am pro-Rockets, but not very pro-Rice.

 

Well I'm pretty darn sure. It's not like football where you can just change your contract and end up with less money against the cap. I'm sure if I'm wrong then a bonafide cap expert will correct me.

Also with a buyout, you are still paying the full amount of the contract(cap-wise, if not $$$ wise), but you are paying it off earlier so it doesn't eat up cap space every year. But I believe there is a limit to how much you can "buy out" of the contract. Maybe we could trim off a few mill off of Rices cap hit his final year by buying out the contract, but that doesn't make much sense because SF will be getting the max that year anyway so we still wouldn't be able to get any FAs. You can't just pay off a huge contract all at once and get the cap space right away. I don't think it works like that. It just depends on how much a buyout can diminish the cap hit, which I'm not too sure of. It would seem like if it was that easy teams would be buying out expensive crap players all the time instead of having them eat up the cap.

Of course the point is moot cuz Rice isn't going to be bought out, and it sounds like he is part of the Rockets plans for next year.

 

If that's the case, why,when Jordan buy out Richmond's contract, everyone was hailing him as brilliant, for getting Washington some cap space?

or am i not remembering what happened correctly?

 

I also seem to recall one of Barkley's peeves with Pippen being that he gave up some salary so the Rockets could fit Pippen's salary under the cap.

 

Crisco - I did the research last summer during the apex of Cato-bashing. My scenario is logistically correct. The cap hit is only the buyout amount amortized over the remaining years of the existing contract. I could find it Coon's CBA FAQ's, but you are most certainly correct in that it just isn't a possibilty to happen.

 

I know that for Richmond, the buyout was writen into the contract when it was signed.

 

That's cool Gater, no breaking out the Coon's FAQ for me please, I trust you. I've done a little research on the cap, admittedly a long time ago, and I have a general gist of it, but by no means am I an expert.

How about you be the contract buyout expert?

It definitely is cool that we have an option to squeeze out some cap room. And the scenario you worked out would be ideal, to buyout Rice and sign Lewis. Too bad it wont happen, most likely.

Still, if there isn't a limit to how much a player can be bought out, I don't see why sucky cap space eaters like Big Country, Ostertag, Tariq Abdul Wahad, et al aren't just bought out that often. I guess the owners are just cheap? I always just assumed the reason was that there was a limit to how much $$$ you could buy out a contract per year.

lpbman, I think Jordan the GM was called a genius for just about everything he did. Maybe buying out Richmond will be a good move in a year or two, but I don't think it's had an impact for them cap-wise yet.

win14me, I believe Barkley was a free agent at the time that he signed that low contract to make room for Pip, so he wasn't restructuring a contract, he was structuring it.

 

How about the Bryant Reeves situation? Isn't that supposed to help Memphis' cap room with his retirement?

 

I don't think so ... his contract comes off the books after the 2003/04 season. Unless they get an injury exception for him or buy out his contract I don't think they'll be getting any cap relief from that contract until then.

 

at a quick gloss-over, Gater and crisco are right.

There is no such thing as buying out your position in salary cap. You can buy out a contract and release some dude, but you cannot release yourself from ****ing up your salary cap situation.

Salary Cap Hit = buyout amortized over the buyout years. I'm more than pretty sure about that, but less than 100% until my Saturday meatloaf is done cooking and I get a moment with my CBA PDF file.

To put this in perspective: good luck getting a player to take less money than his contract stipulates. It is a freaking legally-binding contract, afterall. btw: buyouts can be structured into a contract, but it is probably safe to say that Rice does not have such a clause; meaning, you'd have to negotiate a buyout with him.

...and his wife!!!

 

With apologies to the CriscoKid (& hp):

47. How do retired players count against the cap?
Any money paid to the player counts as team salary (against the cap), even if it's paid after the player retires. For example, James Worthy retired in 1994, two years before his contract ended. Since he continued to receive his salary for the 94-95 and 95-96 seasons, his salary counted against the Lakers' team salary in those seasons. If a player retires mid-season and stops receiving salary, then the salary he received prior to his retirement counts against his team's team salary.

There is one exception whereby a player can continue to receive his salary, but the salary does not count as 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 two years (if the injury or illness occurred between January 1 and July 1) or until the second July 1 following the injury or illness (if it occurred between July 1 and January 1) before a team can apply for this salary cap relief.

If a player retires, even for medical reasons, his team does not receive a salary cap exception to acquire a replacement player.

 

Unless there is a specific buyout clause, a team can't buy out a contract for less than 50% of the remaining value.

Nets finally bit the bullet and bought out the remainder of Jim McIlvaine's contract at 55 cents on the dollar, and will take corresponding cap hits this year and next.

 

I wonder if that exception has ever happened before. Surely didn't with LJ and Jayson Williams. And it appears that IF the Grizz have doctors that agree that Big Country is unfit to play that they wouldn't get cap relief til his contract runs out anyway, lol.

 

I hate to beat a dead horse but this makes no sense from a financial aspect.

Any one who has an inkling of the NPV (net present value) of an annuity knows that 55% is an unrealistic discount rate. Let me use the Texas Lottery for an example. You have just won $25m in the Texas Lottery and have chosen the "cash value" option. That means instead of paying you $1m/year for 25 years you will receive a lump sum payment discounted to the NPV of $25m. Not having personal experience at this , my guess is the lump sum is discounted to about $5m or $6m. I can guarantee you it is NOT anything approaching $12.5m (50% of $25m).

If your statement is true, then it is represents no posssible financial gain to the team because this NPV rate is unrealistically advantageous to the player. I can't see where a rate this high would ever benefit the owner so why would a buyout ever occur?

You may be correct but since part of my heritage is from Missouri I say "Show Me".

PS - I know Coon uses 50% in his Radja example and mentions it as required rate for an option year for but he does not say 50% is a required minimum for the overall contract value.

PPS - The McIlvaine situation may work for the Nets because they are over the luxury tax level and this may be one case where it is advantageous. But the LT is not a concern for the Rocks.

 

UPDATE:

Rod Strickland signed a 4 year / $40m deal in 1999. His contract was bought out last year for $2.5m. According to my math, $2.5m is 50% of $5m and there is no way Stricklands final year was for $5m.

http://espn.go.com/nba/news/2001/0301/1118644.html