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Question about NBA/LAL contracts


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#1 LakersGAFan

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Posted July 31, 2013 - 02:17 PM

I was reading the details of Atlanta Falcons QB Matt Ryans 5 years $103.75 million extension and a very clever tactic that works around the NFL salary cap caught my attention. I was wondering if the same thing was possible in the NBA?
 

The Falcons have built some cap flexibility into Ryan’s contract because they can create cap room at any time during the deal with their discretionary right to convert a portion of his base salary into signing bonus.

LINK for more info if needed


I am not very knowledgeable of the old or new contractual rules because it doesn't concern me really. However it doesn't take a salary cap expert to see this move is genius. If the Falcons want to sign a FA but come up $800,000 short on cap space.....they just convert $800k of Matty Ice's base salary into a bonus.

 

So if possible why wouldn't the Lakers do this to free up cap space. Convert part of KB and/or Pau's base pay into a bonus. In KB's case its guaranteed anyway isn't it? Might as well clear cap room?

 

 



#2 bfc1125roy

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Posted July 31, 2013 - 02:20 PM

I was reading the details of Atlanta Falcons QB Matt Ryans 5 years $103.75 million extension and a very clever tactic that works around the NFL salary cap caught my attention. I was wondering if the same thing was possible in the NBA?
 


I am not very knowledgeable of the old or new contractual rules because it doesn't concern me really. However it doesn't take a salary cap expert to see this move is genius. If the Falcons want to sign a FA but come up $800,000 short on cap space.....they just convert $800k of Matty Ice's base salary into a bonus.

 

So if possible why wouldn't the Lakers do this to free up cap space. Convert part of KB and/or Pau's base pay into a bonus. In KB's case its guaranteed anyway isn't it? Might as well clear cap room?

 

Here's some useful information from Larry Coon,

 

Teams are allowed to offer the players they sign a bonus worth as much as 15% of the total compensation1 (the total compensation includes the signing bonus itself, but excludes any incentive compensation). A signing bonus is paid up-front, but it is charged to the salary cap across the guaranteed seasons in the contract (not including option years or years following an ETO), in proportion to the percentage of salary in each of those seasons that is guaranteed2. This can create a problem when a player is signed to the maximum salary or the team's room under the salary cap or an exception.

 

More detail

 

Basically, it does still count towards the cap, so it may not free up that much space. It may not be wise especially if the Lakers want to clear cap room in later seasons. 


Edited by bfc1125roy, July 31, 2013 - 02:21 PM.


#3 LakersGAFan

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Posted July 31, 2013 - 02:23 PM

Here's some useful information from Larry Coon,


More detail

Basically, it does still count towards the cap, so it may not free up that much space. It may not be wise especially if the Lakers want to clear cap room in later seasons.

wow....so the NBA basically limits hard what a player can pull by creating a rule that makes it difficult for franchises to operate and invest big in their teams and a players future. It seems very counter productive. Cuban must have came up with that rule.

Edited by LakersGAFan, July 31, 2013 - 02:28 PM.





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