Author Topic: Salary cap situation and FAQs  (Read 30036 times)

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Re: Salary cap situation and FAQs
« Reply #45 on: January 01, 2008, 10:57:48 PM »

Offline weinhold

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Re: Questions about some of our contracts/Roy
« Reply #46 on: April 21, 2008, 07:38:48 PM »

Offline expobear

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Rondo -  I think the team option would be an offer.  Rajon doesn't have to take it if he thinks he can make more money on the open market (or if he doesn't like it here, he, he).

That is incorrect.  Players have no say in team options, just as teams have no say in player options.  There is such a thing as a mutual option, where either team can decline.




Roy,

Since most of the contract talks per this thread occurred prior to the start of this season, I wanted to confirm with you what you think Powe's status is for next year.  I know this has been discussed before but that was months ago and Powe has certainly reached a new level of interest with not only the Celtics but other teams around the league. Since Powe is not under contract after this season, is his situation similar to Gilbert Arenas's situation with the Warriors several years ago?  Since the Celtics will probably want to sign Rondo with I imagine a MLE, what does that leave for somebody like Powe or some of the other players the Celtics may want to re-sign?   

Re: Questions about some of our contracts/Roy
« Reply #47 on: April 21, 2008, 10:38:01 PM »

Offline Roy Hobbs

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Roy,

Since most of the contract talks per this thread occurred prior to the start of this season, I wanted to confirm with you what you think Powe's status is for next year.  I know this has been discussed before but that was months ago and Powe has certainly reached a new level of interest with not only the Celtics but other teams around the league. Since Powe is not under contract after this season, is his situation similar to Gilbert Arenas's situation with the Warriors several years ago?  Since the Celtics will probably want to sign Rondo with I imagine a MLE, what does that leave for somebody like Powe or some of the other players the Celtics may want to re-sign?   

While I believe only part of Powe's contract is guaranteed for next season, the team will almost certainly pick up his option, which is for the minimum salary.  It's pretty much a no-brainer.  Once Powe plays his third season here without changing teams, we get his "Bird rights", which means we can resign him for any amount, without having to use the MLE, etc.

The same is true of Rondo; we can go over the cap to sign him because we'll have his Bird rights.  On the other hand, we *won't* have Bird rights to House, or Posey if he opts out of his contract.  We'd have to sign them with the MLE, or another exception.

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Re: Questions about some of our contracts/Roy
« Reply #48 on: April 22, 2008, 10:59:44 AM »

Offline expobear

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Roy,

Since most of the contract talks per this thread occurred prior to the start of this season, I wanted to confirm with you what you think Powe's status is for next year.  I know this has been discussed before but that was months ago and Powe has certainly reached a new level of interest with not only the Celtics but other teams around the league. Since Powe is not under contract after this season, is his situation similar to Gilbert Arenas's situation with the Warriors several years ago?  Since the Celtics will probably want to sign Rondo with I imagine a MLE, what does that leave for somebody like Powe or some of the other players the Celtics may want to re-sign?   



While I believe only part of Powe's contract is guaranteed for next season, the team will almost certainly pick up his option, which is for the minimum salary.  It's pretty much a no-brainer.  Once Powe plays his third season here without changing teams, we get his "Bird rights", which means we can resign him for any amount, without having to use the MLE, etc.

The same is true of Rondo; we can go over the cap to sign him because we'll have his Bird rights.  On the other hand, we *won't* have Bird rights to House, or Posey if he opts out of his contract.  We'd have to sign them with the MLE, or another exception.




Roy,

Thanks for your response.  I did a little more googling on Arenas and found this:


When he does look, he won't like what he sees. Arenas and the Warriors are caught in a loophole. The NBA has been careful to design its contract rules to limit player movement. Teams have the right to sign their own players to any contract up to the league maximum, even if the team is over the salary cap, thanks to the "Larry Bird exception."

Problem is, these rules only go into effect when a player has been with a team three straight years. Arenas is a unique case, because he was a second-round pick and did not get the guaranteed three-year contract first-round picks get. He has no Bird rights, which means, essentially, the Warriors have no significant advantages over other teams when it comes to keeping him.

Arenas is a restricted free agent, so Golden State can match any offer he gets, but because the Warriors are over the salary cap, and because Bird rights are nut involved, they must use a salary-cap exception as their matching offer. The biggest exception they will have is the midlevel exception, which should be about $4.3 million. If a team offers more than the midlevel exception, the Warriors can't match.

That's why Arenas' breakout year is bad for Golden State. Ask any general manager about the upcoming free agent market, and Arenas is the first name that comes up. One general manager estimates Arenas will get a contract starting in the $8 million a year range, a big jump from the $500,000 he's getting this season. Big names such as Jason Kidd and Gary Payton will be on the market, but they are heading into the downside of their careers. Arenas is 21, and for a team with cap space, he could be a building block for the next decade.

****************************************************************************************

Did Ainge do something (per the CBA) to prevent Powe from becoming a free agent, restricted or otherwise?  Going into this season, Powe was definitely not on the Celtics radar as somebody they wanted to keep and because of this, I don't think his contract was guaranteed. If Powe turned out like most second rounders do, the Celtics would have just cut him. Since Powe didn't reach the statistical incentives to guarantee his 2008-9 contract, why would the Celtics hold any special leverage over him?  If Powe's case is similar to Arenas's, then it appears the Celtics don't have any Bird rights on Powe. Perhaps, it may boil down to the type of contract Powe had signed i.e. the first year being guaranteed which might have kicked in some sort of first right for the Celtics to retain Powe over first 3 years. 

Re: Questions about some of our contracts/Roy
« Reply #49 on: April 22, 2008, 11:18:40 AM »

Offline Chris

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Roy,

Since most of the contract talks per this thread occurred prior to the start of this season, I wanted to confirm with you what you think Powe's status is for next year.  I know this has been discussed before but that was months ago and Powe has certainly reached a new level of interest with not only the Celtics but other teams around the league. Since Powe is not under contract after this season, is his situation similar to Gilbert Arenas's situation with the Warriors several years ago?  Since the Celtics will probably want to sign Rondo with I imagine a MLE, what does that leave for somebody like Powe or some of the other players the Celtics may want to re-sign?   



While I believe only part of Powe's contract is guaranteed for next season, the team will almost certainly pick up his option, which is for the minimum salary.  It's pretty much a no-brainer.  Once Powe plays his third season here without changing teams, we get his "Bird rights", which means we can resign him for any amount, without having to use the MLE, etc.

The same is true of Rondo; we can go over the cap to sign him because we'll have his Bird rights.  On the other hand, we *won't* have Bird rights to House, or Posey if he opts out of his contract.  We'd have to sign them with the MLE, or another exception.




Roy,

Thanks for your response.  I did a little more googling on Arenas and found this:


When he does look, he won't like what he sees. Arenas and the Warriors are caught in a loophole. The NBA has been careful to design its contract rules to limit player movement. Teams have the right to sign their own players to any contract up to the league maximum, even if the team is over the salary cap, thanks to the "Larry Bird exception."

Problem is, these rules only go into effect when a player has been with a team three straight years. Arenas is a unique case, because he was a second-round pick and did not get the guaranteed three-year contract first-round picks get. He has no Bird rights, which means, essentially, the Warriors have no significant advantages over other teams when it comes to keeping him.

Arenas is a restricted free agent, so Golden State can match any offer he gets, but because the Warriors are over the salary cap, and because Bird rights are nut involved, they must use a salary-cap exception as their matching offer. The biggest exception they will have is the midlevel exception, which should be about $4.3 million. If a team offers more than the midlevel exception, the Warriors can't match.

That's why Arenas' breakout year is bad for Golden State. Ask any general manager about the upcoming free agent market, and Arenas is the first name that comes up. One general manager estimates Arenas will get a contract starting in the $8 million a year range, a big jump from the $500,000 he's getting this season. Big names such as Jason Kidd and Gary Payton will be on the market, but they are heading into the downside of their careers. Arenas is 21, and for a team with cap space, he could be a building block for the next decade.

****************************************************************************************

Did Ainge do something (per the CBA) to prevent Powe from becoming a free agent, restricted or otherwise?  Going into this season, Powe was definitely not on the Celtics radar as somebody they wanted to keep and because of this, I don't think his contract was guaranteed. If Powe turned out like most second rounders do, the Celtics would have just cut him. Since Powe didn't reach the statistical incentives to guarantee his 2008-9 contract, why would the Celtics hold any special leverage over him?  If Powe's case is similar to Arenas's, then it appears the Celtics don't have any Bird rights on Powe. Perhaps, it may boil down to the type of contract Powe had signed i.e. the first year being guaranteed which might have kicked in some sort of first right for the Celtics to retain Powe over first 3 years. 

Powe's situation is nothing like Arena's.  First off, they closed the loophole (mostly) that allowed Arenas to go to the Wizards.  But more importantly, Arenas was on a 2 year rookie contract with Golden State, which meant they did not have full Bird Rights on him, only Early Bird rights (which mean they can sign him up to the leave average...which is the same as the MLE... without having to use the MLE). 

Powe on the other hand signed a 3 year contract.  Ainge purposely used part of his MLE to sign Powe to a 3 year deal, rather than the standard 2 year second round pick deal, so that he would in fact have full Bird Rights on him.  The fact that the team has options on him for the 2nd and 3rd year is irrevalent.  If the team picks up the options (which they will, and have every right to do), then he will have met the requirement to be a full Bird Rights player, and the C's can sign him for as much as they want after next year, when (I believe) he will be a restricted FA.

Re: Questions about some of our contracts/Roy
« Reply #50 on: April 22, 2008, 12:34:59 PM »

Offline expobear

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Roy,

Since most of the contract talks per this thread occurred prior to the start of this season, I wanted to confirm with you what you think Powe's status is for next year.  I know this has been discussed before but that was months ago and Powe has certainly reached a new level of interest with not only the Celtics but other teams around the league. Since Powe is not under contract after this season, is his situation similar to Gilbert Arenas's situation with the Warriors several years ago?  Since the Celtics will probably want to sign Rondo with I imagine a MLE, what does that leave for somebody like Powe or some of the other players the Celtics may want to re-sign?   



While I believe only part of Powe's contract is guaranteed for next season, the team will almost certainly pick up his option, which is for the minimum salary.  It's pretty much a no-brainer.  Once Powe plays his third season here without changing teams, we get his "Bird rights", which means we can resign him for any amount, without having to use the MLE, etc.

The same is true of Rondo; we can go over the cap to sign him because we'll have his Bird rights.  On the other hand, we *won't* have Bird rights to House, or Posey if he opts out of his contract.  We'd have to sign them with the MLE, or another exception.




Roy,

Thanks for your response.  I did a little more googling on Arenas and found this:


When he does look, he won't like what he sees. Arenas and the Warriors are caught in a loophole. The NBA has been careful to design its contract rules to limit player movement. Teams have the right to sign their own players to any contract up to the league maximum, even if the team is over the salary cap, thanks to the "Larry Bird exception."

Problem is, these rules only go into effect when a player has been with a team three straight years. Arenas is a unique case, because he was a second-round pick and did not get the guaranteed three-year contract first-round picks get. He has no Bird rights, which means, essentially, the Warriors have no significant advantages over other teams when it comes to keeping him.

Arenas is a restricted free agent, so Golden State can match any offer he gets, but because the Warriors are over the salary cap, and because Bird rights are nut involved, they must use a salary-cap exception as their matching offer. The biggest exception they will have is the midlevel exception, which should be about $4.3 million. If a team offers more than the midlevel exception, the Warriors can't match.

That's why Arenas' breakout year is bad for Golden State. Ask any general manager about the upcoming free agent market, and Arenas is the first name that comes up. One general manager estimates Arenas will get a contract starting in the $8 million a year range, a big jump from the $500,000 he's getting this season. Big names such as Jason Kidd and Gary Payton will be on the market, but they are heading into the downside of their careers. Arenas is 21, and for a team with cap space, he could be a building block for the next decade.

****************************************************************************************

Did Ainge do something (per the CBA) to prevent Powe from becoming a free agent, restricted or otherwise?  Going into this season, Powe was definitely not on the Celtics radar as somebody they wanted to keep and because of this, I don't think his contract was guaranteed. If Powe turned out like most second rounders do, the Celtics would have just cut him. Since Powe didn't reach the statistical incentives to guarantee his 2008-9 contract, why would the Celtics hold any special leverage over him?  If Powe's case is similar to Arenas's, then it appears the Celtics don't have any Bird rights on Powe. Perhaps, it may boil down to the type of contract Powe had signed i.e. the first year being guaranteed which might have kicked in some sort of first right for the Celtics to retain Powe over first 3 years. 

Powe's situation is nothing like Arena's.  First off, they closed the loophole (mostly) that allowed Arenas to go to the Wizards.  But more importantly, Arenas was on a 2 year rookie contract with Golden State, which meant they did not have full Bird Rights on him, only Early Bird rights (which mean they can sign him up to the leave average...which is the same as the MLE... without having to use the MLE). 

Powe on the other hand signed a 3 year contract.  Ainge purposely used part of his MLE to sign Powe to a 3 year deal, rather than the standard 2 year second round pick deal, so that he would in fact have full Bird Rights on him.  The fact that the team has options on him for the 2nd and 3rd year is irrevalent.  If the team picks up the options (which they will, and have every right to do), then he will have met the requirement to be a full Bird Rights player, and the C's can sign him for as much as they want after next year, when (I believe) he will be a restricted FA.


Chris,

Does the fact that Powe signing a 3 year contract with the first year being guaranteed, I believe, and the 2nd and 3rd years not being guaranteed (incentive laden) still give the Celtics bird rights to Powe?  The loophole that was closed regarding the Arenas Clause really doesn't apply to Powe. Powe isn't going to get Arenas type money on the free market and the Arenas Clause limits what teams can offer free agents like Arenas was several years ago. If the Arenas Clause was in effect when Arenas was a free agent with the Warriors, I think the most the Wizards could have offered Arenas was the MLE max at the time or about 5MM instead of the 8 or 9MM Arenas ended up getting. Powe isn't going to command this kind of money. I guess the question regarding Powe is whether the type of contract tendered Powe back in 2006 qualifies as the type of contract i.e. guaranteed 3 year contracts that are given 1st rounders, which would allow the Celtics to retain Bird rights to Powe. Or, is Powe a free agent this year?

Re: Salary cap situation and FAQs
« Reply #51 on: April 22, 2008, 12:46:42 PM »

Offline Roy Hobbs

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Quote
Does the fact that Powe signing a 3 year contract with the first year being guaranteed, I believe, and the 2nd and 3rd years not being guaranteed (incentive laden) still give the Celtics bird rights to Powe?

Yes.  So long as a player doesn't change teams via waiver or free agency, he vests with Bird rights after three years.  The reason Danny signed Powe to the contract he did was specifically so we'd retain his Bird rights if we wanted to.

Quote
Or, is Powe a free agent this year?

Powe only become a free agent if the Celtics decline to pick up his option.  They won't do that.

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Re: Salary cap situation and FAQs
« Reply #52 on: April 22, 2008, 01:00:12 PM »

Offline Chris

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Quote
Does the fact that Powe signing a 3 year contract with the first year being guaranteed, I believe, and the 2nd and 3rd years not being guaranteed (incentive laden) still give the Celtics bird rights to Powe?

Yes.  So long as a player doesn't change teams via waiver or free agency, he vests with Bird rights after three years.  The reason Danny signed Powe to the contract he did was specifically so we'd retain his Bird rights if we wanted to.

Quote
Or, is Powe a free agent this year?

Powe only become a free agent if the Celtics decline to pick up his option.  They won't do that.

Exactly.  Bird rights have nothing to do with a contract being guaranteed, they have to do with an uninterupted tenure with a team.

Powe is going to be on the Celtics next season, unless they trade him.  There is no need to worry about it.

Re: Salary cap situation and FAQs
« Reply #53 on: April 22, 2008, 01:26:28 PM »

Offline expobear

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Quote
Does the fact that Powe signing a 3 year contract with the first year being guaranteed, I believe, and the 2nd and 3rd years not being guaranteed (incentive laden) still give the Celtics bird rights to Powe?

Yes.  So long as a player doesn't change teams via waiver or free agency, he vests with Bird rights after three years.  The reason Danny signed Powe to the contract he did was specifically so we'd retain his Bird rights if we wanted to.

Quote
Or, is Powe a free agent this year?

Powe only become a free agent if the Celtics decline to pick up his option.  They won't do that.


Thanks Roy.

Re: Salary cap situation and FAQs
« Reply #54 on: April 22, 2008, 01:31:25 PM »

Offline expobear

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Quote
Does the fact that Powe signing a 3 year contract with the first year being guaranteed, I believe, and the 2nd and 3rd years not being guaranteed (incentive laden) still give the Celtics bird rights to Powe?

Yes.  So long as a player doesn't change teams via waiver or free agency, he vests with Bird rights after three years.  The reason Danny signed Powe to the contract he did was specifically so we'd retain his Bird rights if we wanted to.

Quote
Or, is Powe a free agent this year?

Powe only become a free agent if the Celtics decline to pick up his option.  They won't do that.

Exactly.  Bird rights have nothing to do with a contract being guaranteed, they have to do with an uninterupted tenure with a team.

Powe is going to be on the Celtics next season, unless they trade him.  There is no need to worry about it.


And thank you, Chris, for the clarification.

Re: Salary cap situation and FAQs
« Reply #55 on: May 31, 2008, 03:03:14 PM »

Offline sk7326

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Powe will be back as long as the Celts want him.  The real question for Boston is what to do with #30.  I don't think they are that anxious to have a 3-year contract on their roster right now -- so I would not be surprised if they stuff away an unavailable Euro Spurs style. 

Also, the Celts will have the veterans minimum and mid-levels, which are especially important now since they are contenders -- veterans could be banging down the door looking for a chance to get a ring.

Re: Salary cap situation and FAQs
« Reply #56 on: June 30, 2008, 06:58:09 PM »

Offline BudweiserCeltic

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Roy, you mentioned in the other thread that teams under the cap were able to backload their contracts. I've tried reading around but wasn't able to find the information I was looking for.

Let's say you're WAY under the salary cap. Let's say you give one player a MAX type of contract for 5 years. And let's say you give some other guy a 6 year long contract.

Can you explain what the restrictions are on raises from year to year (if any) in both of these cases? I'm having a hard time finding the figure I'm looking for. I'm leaning towards 10.5% of something, but I think I'm reading the wrong thing, and that Coon's CBA write up doesn't seem to address this properly.

Thanks.

Re: Salary cap situation and FAQs
« Reply #57 on: June 30, 2008, 07:30:13 PM »

Offline Roy Hobbs

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Roy, you mentioned in the other thread that teams under the cap were able to backload their contracts. I've tried reading around but wasn't able to find the information I was looking for.

Let's say you're WAY under the salary cap. Let's say you give one player a MAX type of contract for 5 years. And let's say you give some other guy a 6 year long contract.

Can you explain what the restrictions are on raises from year to year (if any) in both of these cases? I'm having a hard time finding the figure I'm looking for. I'm leaning towards 10.5% of something, but I think I'm reading the wrong thing, and that Coon's CBA write up doesn't seem to address this properly.

Thanks.

I think I had a brain spasm when I was talking about back-loading contracts.  The maximum raise you can give a player *playing on the same contract* is a 10.5% raise.  This also applies when you extend a contract.  In this case, it's a maximum 10.5% annual raise over the previous year's deal, rather than a raise capped at 10.5% of the first year salary.

Note that the 10.5% raise applies only to resigning your own free agents.  If you're signing a free agent off of another team, the most you can offer is 8% annual raises (which is one of the reasons some teams work out sign-and-trades).

If you want to really torture yourself, you can find the actual CBA here:  http://www.nbpa.com/cba_articles.php

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Re: Salary cap situation and FAQs
« Reply #58 on: June 30, 2008, 07:31:02 PM »

Offline Roy Hobbs

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By the way, I'll be updating this within the next week or so.  I'm waiting for the salary cap / MLE / luxury tax to be calculated.

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Re: Salary cap situation and FAQs
« Reply #59 on: June 30, 2008, 07:38:30 PM »

Offline clover

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Thanks for this thread.  I had forgotten that Danny had Rondo tied up for so long and so reasonably.  Adding in the Perk deal and I really think he's got the salary situation under control.  Most interesting will be seeing whether he trades Ray before next year--or squeezes a third year out of the 'Big 3'.