Rarely used, the signing bonus can throw wrinkle into free agency
The Trail Blazers' offer to Paul Millsap includes a $5.6 million signing bonus
The signing bonus helps make Portland's offer more difficult for Utah to match
Portland already has a promising young power forward in LaMarcus Aldridge
With baseball's Aug. 17 signing deadline fast approaching and the Nationals barely communicating with No. 1 draft pick Stephen Strasburg -- agent Scott Boras' alleged target price of a $50 million signing bonus could have something to do with that -- commissioner Bud Selig didn't sound worried Tuesday. "They're very sincere about signing Strasburg,'' Selig told reporters at the All-Star Game, "and I'm hopeful they will, and I know they are going to make him a very meaningful offer.'' In other words, business as usual.
Steelers quarterback Ben Roethlisberger drew the NFL's biggest paycheck in 2008 because, of his $27.7 million compensation, $25.2 million came via signing bonus. No one seemed to mind, even though Roethlisberger posted a quarterback rating last season worse than that old Packers-turned-Jets-possibly-turned-Vikings passer. Again, business as usual.
But the Trail Blazers make an offer to Jazz restricted free agent Paul Millsap that includes a $5.6 million signing bonus and wise old heads around the NBA instantly recoil. Certain members of Utah's front office immediately reach for blood-pressure sleeves and some fans are newly grateful that Salt Lake City lawmakers ditched this month the 40-year-old requirement that customers join a private club just to down an adult beverage. The adjectives most often heard throughout the league for the Millsap offer sheet are "poisonous,'' "onerous'' and "toxic.''
Hardly business as usual. Try business unusual.
Signing bonuses simply aren't something that the NBA does on a regular basis. For all its profligate spending, its guaranteed gambles on questionable players and certain owners' remarkable openness to paying two-for-one prices above the league's luxury tax, the NBA has largely avoided this one area of fiscal insanity.
To some, it might seem laughable, like the glutton who, after gorging on a restaurant's entire menu, refuses the maitre d' when offered a wafer-thin mint. But each sport draws its lines somewhere -- the NFL abhors actual contract guarantees, baseball avoids salary caps entirely -- and signing bonuses thus far has been the NBA's big ugly.
"We don't do them,'' one general manager said, as the clock on Millsap's offer sheet continued to tick (the Jazz have until Friday to match the Blazers' terms and keep the power forward). "And no team I've been with has ever really done them. Teams have been able to hold a hard line, because there's no benefit for a team other than in circumstances like this.''
In this case, the maximum allowable signing bonus is Portland's attempt to front-load Millsap's deal, forcing Utah either to scramble for instant cash or let him leave. Bundling it with the 80 percent of Millsap's first-year salary that can be paid in a lump sum, the Jazz immediately would have to come up with $10.3 million of his four-year, $32 million package. Plenty of NBA owners, even heirs of late Utah owner Larry Miller for all his success, could have a problem matching wallets with Portland billionaire Paul Allen in sheer cash on hand.
"This is a good ploy and we've seen it before with restricted free agents,'' the team executive said. "Portland is trying to be creative. But at the end of the day, as poisonous as this deal is, Utah always has the potential to match.''
An Eastern Conference GM said: "The last 10 years, if you see a bonus and it's not for a superstar player, it's to 'defeat' the other team, making it real difficult for them to keep their guy.''
In 2004, the Nuggets reportedly dangled a signing bonus of $15 million for New Jersey forward Kenyon Martin, which would have cost the Nets -- with Martin's first-year salary front-loaded, too -- upward of $25 million for 2004-05. New Jersey dodged that problem by trading the player for three first-round draft picks. One year earlier, Andre Miller and Lamar Odom changed teams thanks in part to similar up-front payouts.
The league's collective bargaining agreement limits signing bonuses to 20 percent, 17.5 percent for restricted free agents. For salary-cap purposes, the bonus is allocated against the guaranteed years in the player's contract, so it's a cash-flow and timing mechanism rather than additional pay.
"Frankly, it's something I don't really want to know about because it usually only favors the player,'' the first GM said.
More common in the NBA than signing bonuses are advances -- typically used to get rookies up and running in their new cities and generally carved out of the first year's salary only.
"We don't even like to do that,'' the East team executive said. "With a veteran player, there's no reason to.''
The signals this week, with the deadline looming, indicate Utah will match and keep Millsap, while working to trade Carlos Boozer for something approaching fair value; rival teams doubt the Jazz are serious about keeping and paying both power forwards through all of 2009-10. Portland, at that point, would have its money freed up for others.
The good news, for Utah at least, is that the CBA prevents rivals from front-loading offer sheets with perks that would be unmatchable. Like, say, the Clippers offering an ocean-front residence to a free agent from Indianapolis. In this case, the Jazz may just resort to tapping a credit line made available to all teams by the NBA.
The bad news is that Millsap might end up with bruised feelings, believing that Utah should have built up its offer without the Blazers' arm-twisting. He also might actually prefer to play for Portland. The Blazers' downside is that former lottery pick LaMarcus Aldridge, its promising starter at Millsap's position, is set to be paid $5.8 million in the fourth year of his rookie contract, even as his employer is willing to pay a new guy $10.3 million before he lifts a finger for the team. It's a wrinkle that had Jazz GM Kevin O'Connor in a gamesmanship mood, suggesting to the Deseret News that Portland's desired extension with Aldridge might now require "a maximum contract.''
Signing bonuses -- still fighting words around the NBA.
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