Intrepid Detroit Pistons beat reporter Vincent Goodwill takes a closer look at the current stalemate between the NBA players union and owners, but instead of focusing on the negative (sides are still far apart on splitting revenue), he decides to look at everything that the sides have agreed to. I’m all for a little positive news, especially when it is informative as well all wait for the sides to come to terms. Goodwill mentions five areas where the sides have mostly come to terms:
Contract lengths : For players who have Larry Bird rights (enables a team to exceed cap to retain a free agent), maximum contracts have gone from six to five years. For non-Bird players, contracts will go from five-year maximums to four.
Amnesty clause : Similar to the 2005 mechanism, a team can release a player without taking a hit to the salary cap and the player’s contract will be paid in full.
Luxury tax : While not completely finished, the framework is in place for a stiffer penalty. Teams used to be charged dollar-for-dollar after exceeding the salary cap.
Now, teams will be charged $1.50 for every dollar they spend in the first $5 million above the tax level, $1.75 for dollars spent between $5 million and $10 million above, and $2.50 for dollars spent between $10 million to $15 million above.
Midlevel exception : The value will be reduced from $5.8 million to $5 million. There’s still slight haggling to be done about the availability of the exception.
Stretch exception : A new wrinkle. Similar to the Amnesty Clause, a team can release a player, but the player will be paid for twice the length of the deal plus one year.
The only issue remaining is how often will a team be able to use the stretch exception, but it appears to be available annually.
The sign-and-trade mechanism, annual raises and early-termination options are still in limbo, but once the revenue split is settled everything else should fall into place.
Things aren’t terribly unexpected here. Everyone figured there would be a fresh round of amnesty and that contract lengths would be shortened. The most intriguing element to me, however, is the idea of the stretch exception. While owners were hoping to follow the NFL route and design a system where contracts were no longer fully guaranteed, the stretch exception seems like a nice compromise.
It allows teams to cut bait with a player that no longer fits or has been a disaster (cough, cough, Charlie V., cough cough, Rip Hamilton, cough cough, Ben Gordon, cough, cough, Jason Maxiell) and stretch the pain out over a number of years. This way, a team like the Pistons could let go of a veteran like Hamilton and instead of affecting the cap to the tune of $10 million per year for two years it would be $4 million over five years. In other words, a manageable number that doesn’t hinder a team’s ability to bring in new players while also giving the player the “full” value of his contract.
It is also punitive enough, however, that only a truly foolish owner would use the exception over and over again. After all, on a $55 million cap, a team can’t afford to have let’s say three players they have already let go of sucking up $12 million in cap room while also fielding a competitive team.