NBA bookkeeping: Strange contracts, no-trade clauses and other quirks
With free agency currently at a stand still, it's an apt time to review the offseason that was and all of the peculiarities within it. Let's parse the stranger and more notable bits of salary cap minutiae: Those oddities hidden beneath mere contract values. More and more such details come to govern the way teams operate, as big-picture thinking can only be put into action as far as micro-level understanding allows.
Note: This kind of deep dive would not be possible without the resources and clarifications provided by Mark Deeks of Sham Sports. All salary figures below are sourced from his carefully maintained database.
Among the rarest of contract provisions, the no-trade clause does just as its name suggests. Those empowered by it have the ability to to veto any trade they are involved in during the life of their contract. A player must be in the NBA for at least eight seasons to even be eligible for a no-trade clause, and must have played for the team in question for at least four seasons. Those factors alone put no-trade candidates in relatively exclusive company, further pared down by an understandable reluctance on the team side. For these reasons only four players in the league had access to such a clause prior to this summer: Kobe Bryant, Tim Duncan, Dirk Nowitzki and Kevin Garnett.
Nowitzki, who re-upped with the Mavs this summer, appears to have scored another no-trade clause in his new deal. Two others, though, have joined the no-trade ranks with contracts signed this summer. Carmelo Anthony, who re-signed with the Knicks on a five-year, $124 million deal, was given both a 15% trade kicker and a no-trade clause to incentivize his return. Dwyane Wade, who returned to the Heat on a two-year deal worth $31 million, also gained formal veto power. It's worth noting that the Bulls, Rockets and Lakers would not have been able to offer Anthony a no-trade clause, just as no other team in the league could have (or should have, really) offered one to Wade. That may not have been the deciding factor in negotiations for both players' respective returns, but the ability to control one's team circumstances and place of employ is quite valuable indeed.
Privilege of trade consent
The no-trade clause is a bit of specific language built into a player's own contract. There are, however, broader league rules which serve a similar purpose. There are two circumstances in which a player can effectively veto a trade he is involved in by refusing to offer his consent of it:
1. When a restricted free agent signed an offer sheet only to have it matched by his original team (i.e. the right of first refusal). In this situation, the player's veto power lasts only one year. The only player to qualify under this criterion this season is Utah's Gordon Hayward, who initially signed an four-year, $63 million offer sheet with Charlotte.
2. When a player agrees to a one-year deal (not including option years) and will have either Bird rights or Early Bird rights at the end of the season. The players who qualify under this criterion are as follows:
Cole Aldrich (Knicks)
Lavoy Allen (Pacers)
Alan Anderson (Nets)
Matt Bonner (Spurs)
Glen Davis (Clippers)
Drew Gooden (Wizards)
Jordan Hill (Lakers)
Robbie Hummel (Timberwolves)
Jannero Pargo (Hornets)
Garrett Temple (Wizards)
Kevin Seraphin* (Wizards)
*Seraphin meets the criterion even though he technically accepted a fifth-year qualifying offer from Washington.
With three of their lesser players wielding veto power, things could get awfully interesting for the Wizards if they try to work out a trade at any point this season.
Most of the players signed this summer cannot be traded for some stretch of time, be it a mere 30 days (as is the case with Andrew Wiggins, the reported primary in Cleveland's offers for Kevin Love) or a few months. Lakers forward Carlos Boozer, however, cannot be traded until July 1, 2015 as a result of being claimed through the amnesty waiver process. Being that Boozer's deal will also expire at the same time, it can be more succinctly said that the Lakers cannot trade Boozer at all during his current stint.
Outstanding qualifying offers
In order for a player to become a restricted free agent, his team must extend a qualifying offer -- a pre-set, one-year tender that the player can accept if he so chooses. This is what gives teams the right of first refusal in restricted free agency, and in the case that no qualifying offer is made the player would instead become an unrestricted free agent, free to sign with any team.
Most of those players who were issued qualifying offers prior to free agency have already hashed out terms on a new deal, largely with their previous team. Four, however, are still sitting on those offers:
Bledsoe and Monroe are the higher-profile cases, each with their own quirks. Scott, per Yahoo! Sports, is mulling a more lucrative offer to play in Russia. Baynes is in an interesting spot as his standing offer would make him the 16th player on the Spurs' roster of a maximum 15. San Antonio could release Bryce Cotton (whose salary has only a minor guarantee) if the roster crunch demanded it, though Baynes' unresolved situation at least suggests that other outcomes might be possible.
Unusual salary structures
The standard NBA contract escalates, increasing slightly in value from year to year until its completion. In some cases, however, players agree to deals of varying structures in order to better accommodate their team's needs. For some that means signing a contract in which every year's salary is equal, inflating the first-year salary slightly as to offer slightly more flexibility in later seasons. The players whose new contracts follow that structure are:
D.J. Augustin (Pistons): $3 million annually over two seasons
DeJuan Blair (Wizards): $2 million annually over three seasons
Caron Butler (Pistons): $4.5 million annually over two seasons
Ben Gordon (Magic): $4.5 million annually over two seasons
Jordan Hill (Lakers): $9 million annually over two seasons
James Johnson (Raptors): $2.5 million annually over two seasons
Kyle Lowry (Raptors): $12 million annually over four seasons
Marvin Williams (Hornets): $7 million annually over two seasons
Similarly, teams are able to front-load players contracts so that they decrease in value over time. These are fairly uncommon, though this summer saw six new deals signed under a declining framework:
Trevor Ariza (Rockets): $8.6 million in 2014-15 down to $7.4 million in 2017-18
Trevor Booker (Jazz): $5 million in 2014-15 down to $4.8 million in 2015-16
Channing Frye (Magic): $8.6 million in 2014-15 down to $7.4 million in 2017-18
Thabo Sefolosha (Hawks): $4.2 million in 2014-15 down to $3.9 million in 2016-17
Isaiah Thomas (Suns): $7.3 million in 2014-15 down to $6.3 million in 2017-18
P.J. Tucker (Suns): $5.7 million in 2014-15 down to $5.3 million in 2016-17
Somewhere in between are those of an even rarer subset: Contracts of variable increases and decreases, molded in such a way as to give a team particular advantage. Some players will see their salary spike at a time where cap space isn't of consequence to the team in question only to descend in salary as room under the cap is scheduled to become more important. Others are structured particularly as to evade the luxury tax, which grows more punitive with each season above its threshold. Some are structured uniquely for no clear reason, yet deliberately different by the request of some party involved with some particular goal in mind. The more unusual deals of this summer's free agency are:
Boris Diaw (Spurs):
2014-15 salary: $7,500,000
2015-16 salary: $7,000,000
2016-17 salary: $6,500,000 (unguaranteed)
2017-18 salary: 7,000,000 (unguaranteed)
Joe Harris (Cavaliers):
2014-15 salary: $884,879
2015-16 salary: $845,059
2016-17 salary: $980,431 (unguaranteed)
Roy Devyn Marble (Magic):
2014-15 salary: $884,879
2015-16 salary: $845,059 (unguaranteed)
2016-17 salary: $980,431 (unguaranteed)
Lance Stephenson (Hornets)
2014-15 salary: $9,000,000
2015-16 salary: $9,000,000
2016-17 salary: $9,405,000 (team option)
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The hard cap
By and large the NBA is a soft-cap league, in which the salary cap itself serves as a restriction but not a hard and fast boundary. Teams can exceed the salary cap in all kinds of ways using a wide variety of exceptions, to the point that a franchise like the Nets can stretch some $31 million over the cap. There is, however, a functional hard cap for those teams that make use of provisions only entitled to non-luxury tax teams, as extending into tax territory would invalidate the use of the earlier provision.
This mostly pertains to the use of the mid-level exception. Those teams over the salary cap ($63.1 million) but with a total salary under the luxury tax apron (a mark sitting at $80.8 million, some $4 million above the tax line itself) have access to the full mid-level exception, worth $5.3 million. Those teams with a total payroll above the luxury tax apron are only allowed the taxpayer mid-level exception, worth $3.3 million. As a result, the apron itself becomes a hard cap for any team that uses the larger mid-level, which this season includes:
Golden State Warriors (Shaun Livingston)
Indiana Pacers (C.J. Miles)
Los Angeles Clippers (Spencer Hawes)
Minnesota Timberwolves (Mo Williams)
Portland Trail Blazers (Chris Kaman)
Sacramento Kings (Darren Collison)
Washington Wizards (Paul Pierce)
Of that group, only the Clippers ($79.7 million in total salary) are in any close proximity to the hard cap.
• Orlando is now paying four players (Jameer Nelson, Glen Davis, Al Harrington and Anthony Randolph) not on its roster. All four continue to count against the cap for a total of $14.2 million in salary for this season.
• Nowitzki, after re-signing on terms that will pay him just $8 million next season, will only be the Mavs' fourth-highest-paid player in 2014-15.
• Keith Bogans is, for the moment, still a Celtic. If you'll recall, a re-signed Bogans was re-signed into the trade involving Paul Pierce and Kevin Garnett in order to help make the salaries match on both sides. As such he was inked to a lavish deal in total terms (three years, $15.9 million) that was far less damaging in a pragmatic view (only the first season, worth $5.1 million, was at all guaranteed). There is no deadline that that would guarantee Bogans' expensive salary save the league-wide cutoff in January, though it's likely the Celtics -- who at the moment are actually above the luxury tax line -- either trade him or release him before that deadline becomes an issue.
• With the signings of Mo Williams and Robbie Hummel, Minnesota now has 15 players, the maximum allowed in-season, on its roster under guaranteed contract. That in itself is a non-story, though it could influence a potential Kevin Love trade as the Wolves cannot acquire more players than they trade out without bumping up against roster limits.
• A friendly reminder: The Suns are still paying Michael Beasley.
• According to Deeks, Kyrie Irving's recently signed extension will follow the Paul George model. There are certain criteria that allow rookie-scale players to earn a higher value -- up to 30 percent of the salary cap -- on their first contract extensions than the rules would otherwise allow (25 percent). Irving is positioned to be eligible for that raise, provided he is again named as an All-Star game starter or somehow wins the MVP in the coming season.
Irving has followed George's lead in agreeing that should he become eligible to receive 30 percent of the cap, he'll accept 27.5 percent instead. That's a noticeable difference with tangible cap implications, particularly for a Cavs team that will be looking to maximize the value of every dollar spent.
• Houston has exceptions in play that prevent it from having actual cap space, but overall the Rockets' payroll is set to be just $54.3 million for the coming season.
• That's nothing on the Sixers, though, who are currently slated to have around $34 million in salary dedicated to a full, 15-man roster. There's no real punishment for swooping under the salary floor save that the team will have to spend up to it. If they choose, as expected, not to add salaried players to meet that threshold, the team will instead dole out the difference -- which in this case could be upwards of $20 million -- amongst its players. This potentially makes a deal with the current iteration of the Sixers much more lucrative than its base terms would otherwise indicate. Consider it money paid on damages for outright tanking.
Salary data courtesy of Sham Sports.