Salary Cap Q&A

Discussion in 'Pistons and NBA' started by roscoe36, May 5, 2009.

  1. roscoe36

    roscoe36 All-Star Administrator

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    Ok, I did this as an audio file (podcast) so I could kill two birds with one stone. I needed to test out my capability of doing this, and get into addressing cap issues.

    I'd appreciate feedback, I know I have a funny Canadian accent, but if this is too long, too disorganized, not something you will listen to, please let me know. I will do it again if people get value from it. If folks don't find value in it, I won't do it.

    Cap Info

    NBA Salary Cap FAQ

    How is the salary cap set each year?

    I made an error on the average player salary, which is used to calculate the MLE.

    How is "average salary" defined?

    I also screwed up how exceptions work in relation to your cap position.

    Are there exceptions to the salary cap?

    How do exceptions count against the cap? Does being under the cap always mean that a team has room to sign free agents? Do teams ever lose their exceptions?

    I will explain in further detail tomorrow.

    I am going to go update the salary chart at the top of the forum right now, and then get some sleep. Today did not go to plan.
     

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  2. roscoe36

    roscoe36 All-Star Administrator

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    Ok, bump, audio file fixed. Should be better now.

    Also, no way I can fix the salary listing tonight, I'm too tired.

    Here are the salary layouts as per StoryTeller, who is the only unofficial salary source I trust.
     

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  3. Walter

    Walter All-Star Forum Donor

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    Good stuff Roscoe. Thanks a bunch for taking the time to record the audio.
     
  4. roscoe36

    roscoe36 All-Star Administrator

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    Thx Walt. I think I can give a lot more depth in this format rather than writing Walls of Text.
     
  5. roscoe36

    roscoe36 All-Star Administrator

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    1. To add more depth to Stereodave's question about cap space, we're going to be about $20 million under the cap (assuming a cap of $60 million) but we started off $11 million over.

    So when you drop Walt, Dice, Sheed and AI, then add in Jmax's big raise, and incremental raises for others, that means we see a net swing of $31 million off the books. About 43% cut in the payroll.

    2. I tried to answer Anakin's question about the cap and the MLE. I failed on part of it. Every team gets the MLE and other exceptions, but like the Bird Rights exceptions for Sheed, Dice and AI we have to renounce them before we can start using our cap space. It's an either/or situation.

    The gist of what I wrote was correct. You don't get to double dip with cap space, and then bonus cap space.

    Also one more distinction I failed to make clear was that the MLE can be split up. So while it is the average player salary, it can be divided up among several smaller contracts, used partially on one contract, or not used at all. It is better to think of it as a chunk of cap space, rather than a particular contract that can be signed.
     
  6. TaS

    TaS All-Star Forum Donor

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    How many teams paid the luxury tax this year?
     
  7. roscoe36

    roscoe36 All-Star Administrator

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    This is a best guess.

    Boston
    Cleveland
    Dallas
    Lakers
    NY
    Phoenix
    Portland

    Those are the ones that were well over $71 million in total payroll.
     
  8. Walter

    Walter All-Star Forum Donor

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    Good guess Roscoe. Just forgot Atlanta. According to the numbers listed in NBA Trade Machine, the following teams have payroll above $71 million (rounded up in millions)
    Atlanta ($79)
    Boston ($79)
    Cleveland ($91)
    New York ($97)
    Dallas ($95)
    LA Lakers ($81)
    Phoenix ($76)
    Portland ($77)

    There are 2-3 teams teetering on the edge (us being one of them).
     
  9. roscoe36

    roscoe36 All-Star Administrator

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    I have ATL at 68.1 million per Storyteller.

    Those trade machine type #s are very rounded, to the point that I don't think there is much research into each salary, and so the potential for distortion is huge.

    That's not to say that Storyteller doesn't make mistakes, but I wonder if you could link me to the breakout of the salaries so I can see where the discrepancy is.

    Also, bubble teams look to be

    Detroit
    Atlanta
    Chicago
    Denver
    Golden State
    Indiana
    Miami
    Milwaukee
    Minnesota
    Orlando
    San Antonio
    Washington

    If we lop off the top 5 teams and the bottom 5 teams and average the rest of the salaries, this would be where the average lies

    69,984,000

    If the tax starts at $71 million, then the luxury tax for all intents and purposes is the actual cap, not the lower salary cap figure of $58 million.
     
  10. roscoe36

    roscoe36 All-Star Administrator

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    OK, I have modified the salary chart, it is based off the leaked #s from 2006 (where possible) and StoryTeller's Salaries (google for it) list online

    http://www.pistonsforum.com/view-pistonssalaries.html

    Note, the 2009 salary total does not include the cost of our first round pick, which will likely be for the maximum of $1,398,200 which is allowed for the 15th pick this year (all first round contracts have a maximum)

    Assume the salary cap will be $60 million, assume the luxury tax will be around $73 million for next season.

    If you have questions and/or the audio format worked for you (or didn't) let me know.
     
  11. TaS

    TaS All-Star Forum Donor

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    Why doesn't the NBA publish the official contract terms, since most leak out anyway?
     
  12. roscoe36

    roscoe36 All-Star Administrator

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    Well, first they don't usually leak out. They are announced in the newspapers like this,

    Rip Hamilton signs an extension through 2012 that will pay him a reported $40 million.

    That doesn't tell you anything about the contract (bonuses, incentives) except the gross figure and length. It doesn't communicate if it is backloaded, frontloaded, evenly distributed...

    There might even be one or two options in the contract, and those are rarely announced. For the purpose of understanding the contract within the context of total team payroll, it's meaningless.

    I suppose like all businesses, they don't like to tell too much.
     
  13. TaS

    TaS All-Star Forum Donor

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    But when I see the lists, there are all sorts of contracts that decrease or increase over time. They also show team options, player options, etc. Seems like we get almost the full picture.

    I can understand that they wouldn't want to publish some of the more personal details.
     
  14. roscoe36

    roscoe36 All-Star Administrator

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    Whose lists?
     
  15. TaS

    TaS All-Star Forum Donor

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    Not sure I feel comfortable answering that question.
     
  16. Walter

    Walter All-Star Forum Donor

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    Go here: NBA Trade Machine - ESPN
    and select the Hawks.
     
  17. roscoe36

    roscoe36 All-Star Administrator

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    If you add up all of the contracts, it comes out to $68 million and change.

    I'm not sure where they got $79 million from.
     
  18. detteam

    detteam All-Star

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    I'm working my way slowly through the audio.

    In reference to the MLE sign & trade scenario, only the amount over the MLE applies to the trade team's cap...right?

    Thanks for doing this scoe :thumb:
     
  19. roscoe36

    roscoe36 All-Star Administrator

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    I'm not sure I understand the question.

    Here is a hypothetical scenario.

    Magic keep Turk, so they only have the MLE to spend. They want Sheed, but Sheed wants $8 million a year, and the Magic might only be able to offer $5 or $6 million.

    So the Pistons can sign Sheed for $8 million or whatever the Magic and Sheed can agree on, and then trade Sheed to the Magic.

    The Magic will add Sheed to their roster, and still have the MLE to spend.

    I'm not 100% certain what the Pistons will have to take back. I believe they could take back just picks ($0 in trade value) and a traded player exception (essentially a token for their half of the trade, that they can use later). The exception counts against the cap, but they could also renounce it if they want the cap space.

    I *think* technically, this is how you trade a big $$ player for picks, like how Camby was traded to the Clippers, the difference being the Clips were the under the cap team. I'd need to look at Denver's salaries to see how it was sussed out.

    In fact, I think this is basically Joe's trade strategy for cap space in the offseason. Team X wants to dump a player, Joe agrees to take on the salary (for some incentive, or perhaps because he covets the player) and in return, the trading team gets an exception they renounce, and wipe the salary off the books.

    A second opinion on the above would be appreciated.
     
  20. detteam

    detteam All-Star

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    Sorry...can the MLE be deducted from salary for cap purposes in a sign & trade if the trade team chooses to do that?

    I'm not sure I'll ever understand the cap :nerd2:
     

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