Ok, I just want someone to come out with THE DEFINITIVE ANSWER to this issue. Some of you guru egghead fine-print guys, I am begging you, help me out. See, I thought I had understood the 'double-dip' concept of the new CBA. I thought I had understood it to be a situation wherein a player would be released under that tax amnesty rule, and would be able to be signed by another team, and that, while SOME of his new salary would be, in effect, 'rebated' back to his original team, it was only a portion, not the whole thing. But yesterday, J Feigan, the Chronicle's Basketball writer, flat-out said that it was really 'dollar-for-dollar'. This was in a discussion regarding Finley. He said that, even though the Mavs were on the hook for Finley's @50 million, they could spread the cost out over 10 years, thus making the cap hit only 5 million per season. Ok so far. But Finley still gets his 50 million, just over 10 years instead of 6. But then when the question of 'double-dipping' came up, he said that any amount the player signs for is then subtracted from the amount owed by his former team. 100%. Which means, if I understand this correctly, that Finley could sign with US for a penny, or he could sign with Miami for the full MLE, and he would still be making the same money. Is that right? If that was the case, why would any team pay any of these players anything other than the league minimum? And why would money any longer be a factor in determining where they play?? I keep seeing and hearing all these 'pundits' in the media claiming that someone like Finley would not be interested in Houston, because we can't offer as much as other teams. But, if it's a 100% wash with the former contract, I can't see how it can matter. What is going on?? Does anyone really honestly know the true facts yet? Help!!
I thought they were allowed to double dip, but I just found this article on ESPN.com: http://sports.espn.go.com/nba/columns/story?columnist=stein_marc&id=2112912&num=2
My understanding is there is no double dip. Every dollar he signs for is deducted from what his former team is owed. The big thing is the former team can spread out his contract. Dollars today are worth more than dollars tommorrow and worth much than than dollars ten years from now. Just investing in a CDs would yield an extra 2 million for a MLE contract today versus having that money spread out.
1 When they cut a player, a team can spread the remaining portion of his contract out many many years. The player gets all the money but on a slower payment schedule. 2 This does NOT affect the salary cap. For example, Finley will come off Dallas' cap in 3 years even though they have 10 years to pay off the $51MM. Think of Matt Maloney. 3 Money could still be a factor for a waived player because the salary he gets from his new team will be paid faster than from his old team. Maybe Finley can't live off of $5MM/yr and will go to the highest bidder even if there is no double dip at all.
Frankly, it all sounds rather petty by pro-athlete standards.. after taxes, and the agent's cut, is there REALLY going to be enough of a difference to matter that much to make a player sign for slightly more money instead of a chance to be on a really good team? And especially in Finley's case, where he will still be making as much from the Mavs as the amount of the full MLE (mayyybe a few thousand less, peanuts).. seems like any team willing to give him their MLE would be utter fools.
Nero, It is possible that the journalists, just like the rest of us, dont know the full details of the new CBA just yet...so I dont think anyone can give a *definitive* answer just yet... but if you go by the clause that deals with this issue in the old one (see m_cable's post in anotherthread about this)....it appears that it is a portion of the salary and not a 100% offset like Feigen says.
Someone should put it in numbers so it would be easier to understand. From my understanding it sounds like if Finley is owed 50 million from Dallas and takes an offer for 20 million from another team then Dallas only owes him 30 million? 50 (Dallas) - 20 (Other Team) = 30. Is that correct? Correct me if I'm wrong.
Yes and no. Instead of looking at the total he is owed by Dallas, it should be viewed as how much he is owed each year: say 5 mil. Now say some nut pays him 21 million, for 3 years: 7 million per year. 5 million would go back to Dallas, Finley would get the remaining 2 to pay taxes on the 7 million, and split with his agent. And that is far-fetched. Frankly, nobody will pay him that much. The best is hoping for is the MLE, which is just over 5 million. Heck, it almost looks like he will LOSE money if he signs for the MLE instead of the minimum, since almost all the money he signs for is just going to go back to cuban anyway.. of course I could be totally wrong.
I’ve stolen this from the realgm board and poster GrandAdmiralDan: http://www.******************/viewtopic.php?t=407483 The same right of set-off (but for money purposes only, not cap space purposes, I have been told) applies to lux tax amnesty waives as applies to normal waives. The way the set-off will work for these amnesty casualties is that their original teams will be able to reduce the amount they are paying to them by one-half the difference between the player's new salary and the minimum salary for a one-year veteran. That wording may look familiar because it is the wording that is used in the 1999 CBA FAQ. Since it applies here, I simply borrowed it. http://members.cox.net/lmcoon/salarycap.htm#52 In 05-06, the minimum salary for a one-year veteran is $641,748. Using your example (which isn't something I expect to happen, but I suppose it could), if Miami were to use its MLE to sign Finley to a contract that gave him an 05-06 salary of $5 mil, then the set-off amount for Dallas would be $2.179126 mil. So instead of Dallas paying Finley $15.9375 mil in 05-06, they would only pay him $13.758374 mil. But when you add that to Finley's $5 mil that he is receiving from Miami, Finley is now receiving a total salary of $18.758374 mil for 05-06, which is $2.820874 mil more than he would have received if he had just stayed in Dallas (or had been traded) instead of being amnesty axed. Incidentally, if Finley were to sign for just his minimum salary instead ($1.1385 mil), the set off would only be $248,376 and Finley would only net an additional $890,124 instead of the $2.820874 in additional money that Finley nets by signing for the full MLE. That is still a $1.93075 mil difference for 05-06, so that is still significant, but there is obviously not as significant a difference between Finley signing for the minimum salary and signing for the full MLE as some people think. T-Pups wrote: I heard the salary was pro-rated over some years. That actually has nothing to do with the lux tax amnesty provision. Stein is referring to a provision that was put in Finley's contract when it was originally written, a "spread provision." This allows Dallas to "spread" the remainder of Finley's salary due out to a longer period then specified in his contract using the deferred payments option afforded to them by the CBA. The spread provision kicks if Dallas would ever decide to waive Finley for whatever reason. When Finley signed the contract of course, I am sure neither him nor his agent predicted that Finley would ever be waived. Without the new lux tax amnesty provision in the new CBA, they would be correct. I have no other confirmation of Finley (or Houston) having a spread provision in his contract, but it is fairly reasonable to trust Marc Stein's sources on this. Spread provisions were a popular thing to put in contracts like that, and Houston and Finley both signed there contracts in the same offseason. That is when Calvin Booth's contract is from as well (another soon to be amnesty casualty) and I wouldn't be surprised if he has a spread provision as well. Some of these players with spread provisions might want to just do a buy out first for less total money rather than have the payments spread out for such a long period of time. As for Derek Anderson, he doesn't have a spread provision in his contract (although he may and that writer just doesn't know about it). I am not sure when he signed his contract, since Patricia Bender has gone and removed the amnesty waives from her contracts list. I should really have saved that information Anyway, that doesn't have anything to do with the new lux tax amnesty provision in the new CBA, but it is relevant as it relates to those players.
So basically a waiver gets orignial_salary + vets_min + (new_salary -vets_min)/2 <=> orignial_salary + (vets_min + new_salary)/2 So the higher the new_salary is, the more money the waiver gets.
