Whats the deal with the Cavs having an MLE this season? I know while they are under the cap that they don't have an exception, but would they be able to use it after using all their cap room to sign other players? Or is it reserved exclusively for teams that start above the cap at the beginning of the free agency period? Or a more likely possibility, I'm totally wrong on all of this. Any capologists out there?
-
Changing RCF's index page, please click on "Forums" to access the forums.
Mid-level Exception?
- Thread starter Dungong
- Start date
- Joined
- Apr 17, 2005
- Messages
- 11,700
- Reaction score
- 66,509
- Points
- 148
Dungong said:
Once a team falls under the salary cap by more then the MLE then they lose the MLE. The Cavs will be well under the salary cap and therefor will not be granted the MLE by the NBA. They also lose any exceptions they currently have (the Jiri Welsch trade exception).
Exactly right Ben. This is why some of these summer league players for us are a chance of sticking. We will likely use up our cap space with a few players, so with many roster spots still open (7), there is likely to be a couple of players on the NBA's minimum.
- Joined
- Apr 18, 2005
- Messages
- 8,412
- Reaction score
- 9,042
- Points
- 113
Following are guidelines from 2004 (assume new rules for 2005), but a good guideline nonetheless.
www.hoopsworld.com/cgi-bin/news/exec/view.cgi?archive=50&num=8526
Free Agency 2004: Salary Cap-ology
For the gruesome details of the salary cap, see this great site:
http://members.cox.net/lmcoon/salarycap.htm
Here’s the dumbed-down version as it pertains to summer free agency:
The NBA’s salary cap limits the amount a team can spend on player contracts. It is a set amount based upon a percentage (48%) of league revenue (called BRI=basketball-related income). The cap for last season was set at 43.84 million for each team. Teams under the cap figure can spend at will up to this amount. Teams over the cap number can (in most cases) exceed the cap to re-sign their own free agents (usually by using the "Bird exception," see below) , but are heavily restricted when it comes to signing other free agents.
Teams over the cap have only three options when it comes to signing free agents (i.e. that are not re-signings):
1. The Mid-Level Exception: This exception is available for every team to use each year. It will be in the 5 million dollar range for 2004-05 season and can be used for contracts up to six years in length. It can also be split multiple times to sign multiple players. Example: Gary Payton last summer with the Lakers.
2. The $1 Million Exception: This is $1.6 million exception that is available for every team to use but cannot be used two years in a row. So, for example, the Lakers will not have this exception to use this year because they used it last summer to sign Karl Malone. This exception can be used to for contracts up to two years in length and can be split and given to one more players.
3. Minimum Salary Exception (also called Veteran’s Minimum): Teams over the cap are allowed to sign a limitless amount of players to minimum-salary contracts. The amount of these contracts is based upon how long a player has been in the NBA (ranging from 385,000 for a player with no NBA experience to 1.1 million for a player with 10+ years of NBA experience). They can be for up to two years in length.
Though free agents become free on July 1, signings cannot begin until July 14. This two-week period is the "July moratorium" in which the NBA conducts an audit that will determine the new salary cap figure that will take effect on the 14th when the signing period begins. During the July Moratorium, teams may negotiate with free agents, and even agree to terms with them, but actually signings are held off until after July 14.
The Larry Bird Exception
This is the most significant exception in the collective bargaining agreement (CBA) because it allows teams that are over the salary cap to spend freely when re-signing their own free agents. A team can use the exception when re-signing players that have played for three seasons without being waived or changing teams as a free agent. Players keep their "Bird rights" when they change teams via trade. This allows the Detroit Pistons to use the Bird exception to go over the cap to re-sign Rasheed Wallace even though he played for three teams this past season. Teams cannot employ this exception on players who have under three years of service with a team. This was illustrated last summer when Gilbert Arenas became a free agent after completing a two-year rookie contract with the Warriors who could therefore not use the Bird exception. Since they were over the salary cap, the Warriors could only use one of the three exceptions discussed above to re-sign Arenas. The $4.9 million mid-level exception was significantly less than the 8.5 million Arenas received from the Wizards so the Warriors lost Arenas. Significant free agents in a similar situation this summer are Emmanuel Ginobilli (though the Spurs are under the salary cap), Marquis Daniels, and Mehmut Okur.
Other Stuff to Konow:
Restricted/Unrestricted: What’s the Difference?
Unrestricted free agents: Free to sign with any team and their previous team can do nothing to prevent it.
Who? Usually players with 5+ years of service in NBA or those restricted free agents drafted by the Bobcats in the Expansion Draft.
Restricted free agents: If they sign an offer sheet with a new team, their previous team has the right to match that offer and keep the player. To exercise this right, the team must submit a "qualifying offer" (125% of the previous year’s salary) to the free agent bu June 30. This is usually done.
Who? Most first round picks that are end of their rookie contracts (Ex., Jamal Crawford) amd players who have been in the league for less than 3 years (Ex., Marquis Daniels)
Sign-and-Trade
Teams are allowed to re-sign their own free agents and then trade them immediately. This is an attractive option for three reasons. First, teams that may lose an unrestricted free agent for nothing are able to get players in return if they choose to do a sign-and-trade. Second, free-agent players, in many cases, can get the most money only from a re-signing. Third and most importantly, it allows teams that are over the salary cap to sign players for more than the mid-level exception if they can find a willing partner. In a hypothetical example from this summer, an over the cap team like Indiana can negotiate with a free agent like Erick Dampier to sign for, say, a $8 million starting salary (they could only otherwise offer the $5 million mid-level salary) and then work out an arrangement with the Warriors who would sign Dampier to this contract and then trade him immediately to the Pacers for players of equivalent salary. If Golden State balks, Dampier could only get the mid-level from Indiana.
The Luxury Tax
This is an additional penalty for teams that are well over the cap and is triggered when league-wide salaries exceed 61% of BRI. It is basically an attempt to control big spending by a few teams and keep salary spending further under control. Teams that have payrolls that are substantially over the salary cap, like Dallas, Portland, and New York, push the overall league payroll to well above the 43% of BRI ideal that the salary cap aims for. If this percentage gets as high as 61%, then those teams that are significantly over the salary cap pay a dollar per dollar tax for the amount they are over the luxury tax threshold (which was 53 million this past year). This tax money is then distributed mainly to those teams that have stayed under the luxury tax threshold. This is a huge financial penalty and causes many teams to think twice about free-spending, even when it comes to re-signing their own free agents. Another important aspect of the luxury tax is that the teams do not know whether it will be triggered until after the season, so teams must make an educated gamble from year to year about whether it is necessary to keep their payroll under the (projected) luxury tax figure.
What to Expect for 2004-05
There are conflicting accounts about how much, or even whether, the salary cap will go up on July 14. Some (see http://www.uncg.edu/bae/people/rosenbaum/luxtax.html) have even estimated that the salary cap will fall (due to less-than-expected revenue growth) which would have a significant impact on free agency. Teams that have salary cap room, like Denver and Phoenix, will have less to spend if the salary cap falls. Others, like Jazz owner Larry Miller (see http://www.sltrib.com/2004/Apr/04262004/sports/sports.asp), think that the cap will go up to above 45 million. It should be noted that the salary cap went up (from 40.3 mil to 43.8 mil) more than was anticipated last summer, which allowed teams like Washington and Miami to become bigger free agency players with more cap room to spend. All this discussion tells you is that much about how free agency will play out will not be known until the new salary cap figure is released on July 14.
There are also conflicting estimates regarding whether the luxury tax will be triggered next summer (it is a foregone conclusion that there will be a luxury tax for this past season which led to the salary dump of Phoenix). While there was a feeling that there would be no luxury tax subsequent to this summer, this might not be the case. If the BRI this season is lower than expected (and the cap barely goes up or goes down), there is a higher chance the luxury tax may rear its ugly head again next summer. This could lead a team, like Dallas, that is already paying the tax to think twice about going even farther over the tax threshold (as to re-sign Steve Nash). Because the Mavs are already over the tax threshold, a salary of 10 million for Nash next season will actually cost the Mavs 20 million (ouch). It also looks like David Stern is pushing for an even more restrictive luxury tax beyond next summer, when the current CBA expires, so teams carrying high payrolls will have to think twice if they want to add more salary this summer.
www.hoopsworld.com/cgi-bin/news/exec/view.cgi?archive=50&num=8526
Free Agency 2004: Salary Cap-ology
For the gruesome details of the salary cap, see this great site:
http://members.cox.net/lmcoon/salarycap.htm
Here’s the dumbed-down version as it pertains to summer free agency:
The NBA’s salary cap limits the amount a team can spend on player contracts. It is a set amount based upon a percentage (48%) of league revenue (called BRI=basketball-related income). The cap for last season was set at 43.84 million for each team. Teams under the cap figure can spend at will up to this amount. Teams over the cap number can (in most cases) exceed the cap to re-sign their own free agents (usually by using the "Bird exception," see below) , but are heavily restricted when it comes to signing other free agents.
Teams over the cap have only three options when it comes to signing free agents (i.e. that are not re-signings):
1. The Mid-Level Exception: This exception is available for every team to use each year. It will be in the 5 million dollar range for 2004-05 season and can be used for contracts up to six years in length. It can also be split multiple times to sign multiple players. Example: Gary Payton last summer with the Lakers.
2. The $1 Million Exception: This is $1.6 million exception that is available for every team to use but cannot be used two years in a row. So, for example, the Lakers will not have this exception to use this year because they used it last summer to sign Karl Malone. This exception can be used to for contracts up to two years in length and can be split and given to one more players.
3. Minimum Salary Exception (also called Veteran’s Minimum): Teams over the cap are allowed to sign a limitless amount of players to minimum-salary contracts. The amount of these contracts is based upon how long a player has been in the NBA (ranging from 385,000 for a player with no NBA experience to 1.1 million for a player with 10+ years of NBA experience). They can be for up to two years in length.
Though free agents become free on July 1, signings cannot begin until July 14. This two-week period is the "July moratorium" in which the NBA conducts an audit that will determine the new salary cap figure that will take effect on the 14th when the signing period begins. During the July Moratorium, teams may negotiate with free agents, and even agree to terms with them, but actually signings are held off until after July 14.
The Larry Bird Exception
This is the most significant exception in the collective bargaining agreement (CBA) because it allows teams that are over the salary cap to spend freely when re-signing their own free agents. A team can use the exception when re-signing players that have played for three seasons without being waived or changing teams as a free agent. Players keep their "Bird rights" when they change teams via trade. This allows the Detroit Pistons to use the Bird exception to go over the cap to re-sign Rasheed Wallace even though he played for three teams this past season. Teams cannot employ this exception on players who have under three years of service with a team. This was illustrated last summer when Gilbert Arenas became a free agent after completing a two-year rookie contract with the Warriors who could therefore not use the Bird exception. Since they were over the salary cap, the Warriors could only use one of the three exceptions discussed above to re-sign Arenas. The $4.9 million mid-level exception was significantly less than the 8.5 million Arenas received from the Wizards so the Warriors lost Arenas. Significant free agents in a similar situation this summer are Emmanuel Ginobilli (though the Spurs are under the salary cap), Marquis Daniels, and Mehmut Okur.
Other Stuff to Konow:
Restricted/Unrestricted: What’s the Difference?
Unrestricted free agents: Free to sign with any team and their previous team can do nothing to prevent it.
Who? Usually players with 5+ years of service in NBA or those restricted free agents drafted by the Bobcats in the Expansion Draft.
Restricted free agents: If they sign an offer sheet with a new team, their previous team has the right to match that offer and keep the player. To exercise this right, the team must submit a "qualifying offer" (125% of the previous year’s salary) to the free agent bu June 30. This is usually done.
Who? Most first round picks that are end of their rookie contracts (Ex., Jamal Crawford) amd players who have been in the league for less than 3 years (Ex., Marquis Daniels)
Sign-and-Trade
Teams are allowed to re-sign their own free agents and then trade them immediately. This is an attractive option for three reasons. First, teams that may lose an unrestricted free agent for nothing are able to get players in return if they choose to do a sign-and-trade. Second, free-agent players, in many cases, can get the most money only from a re-signing. Third and most importantly, it allows teams that are over the salary cap to sign players for more than the mid-level exception if they can find a willing partner. In a hypothetical example from this summer, an over the cap team like Indiana can negotiate with a free agent like Erick Dampier to sign for, say, a $8 million starting salary (they could only otherwise offer the $5 million mid-level salary) and then work out an arrangement with the Warriors who would sign Dampier to this contract and then trade him immediately to the Pacers for players of equivalent salary. If Golden State balks, Dampier could only get the mid-level from Indiana.
The Luxury Tax
This is an additional penalty for teams that are well over the cap and is triggered when league-wide salaries exceed 61% of BRI. It is basically an attempt to control big spending by a few teams and keep salary spending further under control. Teams that have payrolls that are substantially over the salary cap, like Dallas, Portland, and New York, push the overall league payroll to well above the 43% of BRI ideal that the salary cap aims for. If this percentage gets as high as 61%, then those teams that are significantly over the salary cap pay a dollar per dollar tax for the amount they are over the luxury tax threshold (which was 53 million this past year). This tax money is then distributed mainly to those teams that have stayed under the luxury tax threshold. This is a huge financial penalty and causes many teams to think twice about free-spending, even when it comes to re-signing their own free agents. Another important aspect of the luxury tax is that the teams do not know whether it will be triggered until after the season, so teams must make an educated gamble from year to year about whether it is necessary to keep their payroll under the (projected) luxury tax figure.
What to Expect for 2004-05
There are conflicting accounts about how much, or even whether, the salary cap will go up on July 14. Some (see http://www.uncg.edu/bae/people/rosenbaum/luxtax.html) have even estimated that the salary cap will fall (due to less-than-expected revenue growth) which would have a significant impact on free agency. Teams that have salary cap room, like Denver and Phoenix, will have less to spend if the salary cap falls. Others, like Jazz owner Larry Miller (see http://www.sltrib.com/2004/Apr/04262004/sports/sports.asp), think that the cap will go up to above 45 million. It should be noted that the salary cap went up (from 40.3 mil to 43.8 mil) more than was anticipated last summer, which allowed teams like Washington and Miami to become bigger free agency players with more cap room to spend. All this discussion tells you is that much about how free agency will play out will not be known until the new salary cap figure is released on July 14.
There are also conflicting estimates regarding whether the luxury tax will be triggered next summer (it is a foregone conclusion that there will be a luxury tax for this past season which led to the salary dump of Phoenix). While there was a feeling that there would be no luxury tax subsequent to this summer, this might not be the case. If the BRI this season is lower than expected (and the cap barely goes up or goes down), there is a higher chance the luxury tax may rear its ugly head again next summer. This could lead a team, like Dallas, that is already paying the tax to think twice about going even farther over the tax threshold (as to re-sign Steve Nash). Because the Mavs are already over the tax threshold, a salary of 10 million for Nash next season will actually cost the Mavs 20 million (ouch). It also looks like David Stern is pushing for an even more restrictive luxury tax beyond next summer, when the current CBA expires, so teams carrying high payrolls will have to think twice if they want to add more salary this summer.
- Joined
- Apr 18, 2005
- Messages
- 8,412
- Reaction score
- 9,042
- Points
- 113
KI4MVP
formerly LJ4MVP
- Joined
- Jun 30, 2005
- Messages
- 31,275
- Reaction score
- 41,326
- Points
- 148
the way it works is the MLE has a cap hold. The MLE allows you to be over the cap, but if you are under the cap, you renounce the MLE to make your full cap space available. For teams like us under the 12 man roster, there is also a small cap hold on unsigned roster spots, but once we hit the cap limit, we can sign the rest of our roster to league minimum contracts. An interesting thing about those contracts is if we sign a vereran to a league minimum, we only have to pay part of their salary, the league picks up the rest.
LyXo
Gold Star Member
- Joined
- Apr 17, 2005
- Messages
- 2,916
- Reaction score
- 921
- Points
- 113
I think the MLE is unchanged from last season, and triggers when the team becomes over the cap. If next season they are under the cap, anything that used the MLE last season will transfer over to regular cap space. So, if we picked up Tractor's option (we used the MLE to sign him), then it would count towards the regular cap, not the MLE as it was last season.
So, say we sign Redd starting at 12 mil. Then Z at 10 mil. Then, we look around at the likes of SAR, Donyell Marshall, etc. and offer them a bit over the MLE, so around 6 mil. 12 + 10 + 6 = 28 million, so we'll weither be exactly on the cap or a little over. Then sign Antonio Daniels at the MLE, because it'll kick in. I think a scenario like that could work. Don't know if it will, but it could.
So, say we sign Redd starting at 12 mil. Then Z at 10 mil. Then, we look around at the likes of SAR, Donyell Marshall, etc. and offer them a bit over the MLE, so around 6 mil. 12 + 10 + 6 = 28 million, so we'll weither be exactly on the cap or a little over. Then sign Antonio Daniels at the MLE, because it'll kick in. I think a scenario like that could work. Don't know if it will, but it could.
KI4MVP
formerly LJ4MVP
- Joined
- Jun 30, 2005
- Messages
- 31,275
- Reaction score
- 41,326
- Points
- 148
no, the MLE won't kick in - we have to renounce it this year to make the full cap available. The MLE is only significant to us this year bacause it's the max many other teams can offer players they don't have bird rights on.
- Joined
- Apr 17, 2005
- Messages
- 11,700
- Reaction score
- 66,509
- Points
- 148
lyXo said:
I damn near went cross-eyed trying to read this. Several things jump out as being wrong but I'm not exactly sure what you were trying to say.
Traylor was signed using the million dollar exception, if you scroll up a few posts you can read all about this exceptions.
Ah makes sense now, thanks for clearing that up for me
So basically Redd gets offered the max, which starts at something like 11 million. Z gets offered something also starting at 11 million. Then we try to lure Saraunas/Antonio Daniels for 6 million, paying a bit more than the MLE other teams would offer, and that uses all 28 mill in cap space and the other 4 players on the 14 player roster would have to be signed at the minimum unless they came in via a trade.
Alternatively I could see Simmons signing for something like 6 million leaving 5 million to go after a backup center, and a 4th serviceable big man is definately needed.
So basically Redd gets offered the max, which starts at something like 11 million. Z gets offered something also starting at 11 million. Then we try to lure Saraunas/Antonio Daniels for 6 million, paying a bit more than the MLE other teams would offer, and that uses all 28 mill in cap space and the other 4 players on the 14 player roster would have to be signed at the minimum unless they came in via a trade.
Alternatively I could see Simmons signing for something like 6 million leaving 5 million to go after a backup center, and a 4th serviceable big man is definately needed.