A wrinkle in the coaching carousel
Remember when teams used to hire coaches based on X's and O's?
Now it's as much about money and "offset clauses" as it is about the pick-and-roll and the 2-3 zone.
From the Mike D'Antoni situation in Phoenix to the ongoing search in Chicago, the offset clause is playing a huge role in the coaching carousel.
"The offsets are crucial now. They really are," said a longtime agent who wished to remain anonymous because he represents a current NBA coach. "The money is so big [with coaches' salaries]. Teams don't want to have to pay two guys."
Phoenix and Chicago are two teams currently affected by offsets, or clauses in contracts that allow a team to get off the hook for a portion or all of the money it owes a coach should he take another job.
The Suns and D'Antoni clearly have decided to part ways. But the divorce has been held up, according to reports, over the remaining two years and $8.5 million on D'Antoni's contract.
D'Antoni's contract reportedly contains a full offset clause, so Phoenix wouldn't be responsible for payment if he lands another job somewhere for equal or more money. But if the Suns fire him, they have to pay him. That's probably why Suns general manager Steve Kerr has granted D'Antoni permission to talk to the Bulls and Knicks.
It also might explain why the Suns are being so patient with the whole situation. D'Antoni's decision could influence how much money Phoenix has to offer another coach. If D'Antoni gets another job, it clears up funds to go out and pursue a big name. If not, well, then the Suns might have to lower their sights a bit.
Chicago is in much the same situation as it goes about trying to find a coach. The Bulls still owe money to former coach Scott Skiles (his settlement after being fired did not include an offset clause, according to a source with knowledge of the situation) so they might be reluctant to meet D'Antoni's price tag. In other words, the Bulls might not want to pay, say, $5 million to D'Antoni or Avery Johnson next season when they are already paying Skiles. They might decide the budget only allows for an unproven assistant type like Boston's Tom Thibodeau.
The Mavs and Knicks don't seem to worry as much about paying top dollar for coaches. Hence, those two teams are pretty much set. Dallas has Rick Carlisle ready to sign, and New York is expected to have its choice of Mark Jackson, D'Antoni, Johnson or somebody else who might come along.
Offset clauses have been around for a long time. According to agents and executives, they are almost standard nowadays and come in various shapes and sizes.
Some require full offset, others just a portion. Some require the fired coach to be actively seeking another job in order to collect. Some require an offset if the coach gets a job in broadcasting. Other coaches, however, have no offset clause at all in their contracts. They can collect a check from one team while still being paid by another. The prior team gets no relief.
It all depends on what the teams require in their contracts, and what the coach (usually via his lawyer or representative) can negotiate.
Agents say the reason offset clauses have become more notable is because of the rise in coaches' salaries. Top coaches like Phil Jackson make as much as $10 million per season, while even the lowest paid can earn as much as $2 million. Most of the time the money is guaranteed, or at least a good portion of it, meaning they get to collect the full amount if they get fired.
"It's a fairly new phenomenon because the coaching salaries have increased significantly in recent years, and because owners are much more willing now to pull the trigger, it seems, early in the contract," longtime player agent Steve Kauffman said.
To some around the league, the willingness of owners to fire successful coaches and eat those big salaries is astounding. Already this offseason a recent Coach of the Year winner (Johnson, 2006) was sent packing, with another (D'Antoni, '05) likely to follow soon. Skiles was a big hit in Chicago just a few years ago.
"This is all because you can't deal with players anymore," a veteran agent said. "To some degree, they are running the asylum. ... You can't discipline the players so you fire the coach.
"Look at the amount of guaranteed money teams are eating [by firing their coaches]. It's just amazing to me."
That's why the offset clause is only going to become a bigger factor in the future.