We’ve all been obsessing for months over the new amnesty rule, which will allow each team to cut one player currently under contract and have that player’s salary (which the team must still pay) vanish from its salary-cap number. Teams will be able to use amnesty once over the course of the new collective bargaining agreement.
The rule comes loaded with moral issues: Why should teams that signed or acquired overpaid, non-productive players be rewarded with a get-out-of-jail free card, especially since the new, harsh luxury-tax penalties won’t come into effect until the 2013-14 season, giving teams two years to prepare? And wouldn’t the rule be unfair to teams that have kept their cap sheets clean for this crop of free agents? They might face more competition as rivals shed salary, and players who end up as amnesty cuts might view such teams as unappealing destinations, since such players could sign minimum-level deals with glamorous contenders.
The league has tried to fix that last issue by creating a waiver process for players cut via amnesty, according to the details of the league’s proposal. The net result is that teams under the cap will have the first shot at any amnesty victims, preventing those players from flocking to contenders over the cap (the Lakers, Mavericks, Celtics, Spurs, Magic, Bulls and even the Grizzlies). Here’s a slightly simplified version of how it will work:
• Say the Trail Blazers use their amnesty provision on Brandon Roy, who is set to make $15 million this season and $69 million over the four years left on his contract. Releasing Roy would not take the Blazers under the cap — a reason they might wait — but it would take them under the dollar-for-dollar luxury-tax line.
• When we first contemplated amnesty, we thought Roy would then be a free agent, able to sign with any team. Fans of contending teams salivated over picking up quality veterans on minimum salaries — cheap contracts they’d be willing to take, since their old team would still be paying their full salary.
But this is not what will happen. Instead, Roy would be placed into a hybrid waiver market open only to teams under the salary cap. Those teams would then submit bids detailing how much of Roy’s $15 million salary they’d like to pay. The highest bidder gets him; Roy has no choice in the matter. The winning team will pay only the money it offered in its bid, with Portland paying the rest. So, if the Hornets, desperate for a shooting guard and able to get under the cap if they lose David West, bid $4 million for Roy and win, the Blazers would be on the hook for the remaining $11 million.
As you can see, the system prevents players from joining contenders on the cheap and from earning two salaries at once — at least, if someone under the cap claims them.
The list of teams under the cap includes a bunch of bad teams with little use for tainted veteran talent (the Raptors, Wizards, Kings and Bobcats); one team with massive cap room and an interesting young nucleus (the Pacers); one crazy revenue-generator with an even better young nucleus (the Clippers); one club angling for bigger things (the Nets); and a few interesting wild cards that could go in a variety of directions (the Rockets, Pistons, Warriors and Nuggets). Would those teams want one of the possible amnesty candidates — Roy, Travis Outlaw, Baron Davis, Gilbert Arenas, Rashard Lewis, Brendan Haywood, DeSagana Diop, Marvin Williams and others?
Your first instinct is to say “no” — that a rebuilding team or an up-and-coming bunch does not need to spend money on players like these. But some are good players, which is easy to forget. Take Lewis, a guy the Wizards may not actually cut via amnesty, given that they have to stay above the new, higher minimum-salary floor: Lewis’ contract has become a punch line, but he is a useful player who improved defensively playing under Stan Van Gundy. Lewis is a “stretch” power forward with legitimate three-point range and an efficient post game he can use against smaller defenders.
Or what about Davis, a possible backup point guard for the Warriors and Clippers as they try to push for a bottom-tier Western Conference playoff spot? Or even Outlaw, a younger stretch power forward who can swing to small forward and has to play better than he did last season?
Depending on future plans, you could see a team under the cap grabbing one of these players on the cheap to help now and serve as a trade chip later.
But here are two major questions the league, per several sources, hasn’t answered yet:
1. Would the team acquiring such a player have to sign him to a contract that runs for the same length as his old one? In other words: Could you acquire Roy via waiver for one season, or would you have to sign him to a four-year deal that parallels his Portland contract? Lewis has two years (including this one) left on his deal. Arenas has three. This is an important question.
2. Would these contracts count as “new” for the purposes of the “stretch” exception, which will allow teams to waive players they sign once the league resumes business and “stretch” the cap hit out into the future? The idea behind the “stretch” rule is to make it easier for teams to part with non-performing players, so that a team could waive a guy with two years left on his deal and stretch the cap hit over five seasons, softening the immediate blow.
But are these waiver/amnesty contracts “new”? If a team is “forced” to sign Roy for four years, can it waive him after the first one (if he performs poorly) and stretch the payments out over seven seasons? Or do these deals count as “old,” since they are linked to pre-existing contracts?
It will be hard to make predictions about amnesty until we know all of this stuff, but the general manager quoted in this New York Times story is probably right: I’d be surprised if we saw more than a half-dozen guys change teams this season via amnesty, and the number could be much lower. Teams might choose to wait on amnesty if using the clause won’t provide immediate cap room (as is the case in Portland with Roy and Dallas with Haywood), and especially since the new luxury tax doesn’t kick in for two seasons. It’s easy to say Dallas should just slice away Haywood’s bloated deal, but why not keep him for now as Tyson Chandler’s backup and potential injury insurance? And as I’ve noted before, some teams just don’t have a quality amnesty candidate, and others (such as the Hawks) may not be in a place financially to pay someone tens of millions for nothing.
There’s a good chance amnesty won’t provide the immediate excitement fans have been anticipating, but it will still be fascinating to watch this process play out.