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Poison pill contracts

Discussion in 'NBA Dish' started by phantoman, Jul 1, 2013.

  1. phantoman

    phantoman Member

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    So the spectacle of the Lin and Asik's restricted free agent contracts have set precedence in the NBA under the new CBA. I was wondering how come we haven't seen a lot of these yet. I guess it will be seen more so on July 10. Which players do you think will have a back loaded contract?

    I think terek Evans will have one but I can't think of any more where the demand for a player will result in a contract that is back loaded.

    I would have thought there will be a Ton of them this year.
    I can definitely foresee paraon's getting a contract like that. That would give the Rockets the most incentive to set the market price rather than letting the player set the price by using the market, it kind of keeps the team honest on players they are in their Long term plans.
     
  2. pnr

    pnr Member

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    I thought it only applied to second rounders and undrafted?
     
  3. phantoman

    phantoman Member

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    I wasn't aware of that. You could be right.
     
  4. BigBenito

    BigBenito Member

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    Yeah, not many contracts like that worth giving out to RFA 2nd round picks.
     
  5. don grahamleone

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    I agree with you completely here. Although, controlling the price players demand was not likely the reason it was done initially, it could have the effect long term that helps regulate player bargaining.
     
  6. heypartner

    heypartner Member

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    This was possible under the old CBA. It is called the Gilbert Arenas Provision. It can only happen to 2nd rounders and undrafted players.

    The "Poison Pill Provision" is new, but it refers to extensions to first round player, rookie-scale contracts. After an extension is signed, trading them before the extension goes into effect becomes very hard.

    They operate much the same, so the media kinda refers to them the same. But the Gilbert Arenas Provision that Lin and Asik signed under has been around since 1985.

    So, to answer your question...it hasn't happened much, because it's rare for a 2nd rounder to be worth it.
     
  7. merrrlo

    merrrlo Member

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    I guess the OP's assertion that Parsons might one day get such an offer holds, though, right? (unless the Rockets don't let him become an RFA - I seem to remember from a post by Bima that this was the Rockets choice to make, right?)
     
  8. Joe Joe

    Joe Joe Go Stros!
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    Gilbert Arenas rule only applies to restricted free agents with one or two years in the league. Parsons's contract was for 4 years. Don't expect the Rockets to sign Canaan to a two year deal. I was shocked to hear the Rockets were signing Covington to a two year deal as it would seem Morey would not want to give other GMs the opportunity to Morey him.
     
    1 person likes this.
  9. BimaThug

    BimaThug Resident Capologist
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    This.

    To reiterate: ONLY one- or two-year veterans who are not on first round rookie scale contracts are eligible to be signed to these contracts with balloon payments in Year 3 under the Gilbert Arenas Rule. Also, the Arenas Rule really only becomes relevant when the free agent is being signed to a deal starting at or above the Nontaxpayer MLE.

    Last summer was a very, very, very rare situation in which THREE players were signed to such contracts (Jeremy Lin, Omer Asik and Landry Fields).

    Situations like with Asik and Fields (second rounders whose teams chose not to use a portion of their MLE or cap room to sign them to three-year deals and who then outperform a MLE-range contract) come around every now and then, but they are pretty rare. (Personally, I never thought Fields was worth anywhere near what he got paid, so I think Toronto's use of the Arenas loophole was ill-advised, to say the least.) Most teams are doing a better job now of locking up their early second rounders to longer-term deals via the MLE or cap room, so a situation like Asik's will become even rarer.

    The Jeremy Lin situation (undrafted, waived twice, then exploding onto the scene) is pretty much unprecedented and is unlikely to happen again anytime soon.

    Before asking if a team can sign a free agent to one of those "poisonous" contracts, ask yourselves the following questions:

    1) Has the player been in the league for more than two seasons? (If YES, he's ineligible)

    2) Is the player a first round draft pick who hasn't been waived? (If YES, he's ineligible)


    Also, those Arenas Rule contracts are not actually called "Poison Pill" contracts. That's something else entirely, as heyp correctly points out:
     

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