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The MAX Contract Myth. Knicks prob cant afford 2 of them

the lake show
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The MAX Contract Myth. Knicks prob cant afford 2 of them

This week we've looked at a couple aspects of 2010 NBA Free Agency. First we talked about what a MAX contract might look like and who the players might be, and then we talked about the next tier of available free agents, the ones who might also benefit from all that cap space running around.

One point I glossed over in the first piece was the issue of Cap Holds. Understanding this is important, because cap holds are the reason why there won't be quite as much cap space around as we are led to believe. There will be a lot, but the MAX slots won't be quite as plentiful.
The NBA Salary Cap FAQ goes deep into the issue here, and on each of our team salary pages a simplified answer is on the bottom of the page:

What is a cap hold? A cap hold is the amount of space free agent counts towards a team's cap. These "cap holds" factor in when a team signs free agents. If they didn't exist, a team could use their cap space to sign other free agents until the space was gone, and then re-sign their own free agents using the Bird exception. A cap hold cannot exceed the maximum contract offer that player can receive on the open market (as defined by years of experience - indicated in the table above by MAX followed by the years of experience). The cap hold disappears if the team renounces their own free agent, that free agent signs with a new team, or re-signs with the same team.

We also list the cap holds for each free agent season that will affect a team's available cap space.

So why is this important? We've talked in the past about how cap holds would have be renounced by the teams with the most available cap space in order to maximize the availability. However, what we failed to mention, is these would simply be replaced with other, smaller, cap holds. The CBA rules for cap holds dictate 12 roster spots have to be accounted for, either by an active contract or by a cap hold. That cap hold amount for an extra space is equal to the cheapest minimum salary contract – for the 2010-11 season that is $473,604. In addition, if the team has a first round pick a cap hold is placed on the team for the rookie scale amount of his first-year salary (this counts towards the 12). (Related: Check out owed first round picks that could affect this.)

So how does this affect the teams mentioned as having maximum salary slots this summer? Let's take a look at each of those teams again, checking out how many players they have under contract, how many first-round picks could affect their cap space, and how many minimum salary cap holds there could be. For this purpose we are going to assume all free agents are renounced, though that decision doesn't have to be made until immediately before signing a free agent where the space would be needed.

TEAM
CONTRACTS
#1 PICKS
MINIMUM HOLDS

Miami HEAT 5 - $30.7 million* 2 5 - $2.4 million
New York Knicks 5 - $18.6 million 0 7 - $3.3 million
New Jersey Nets 7 - $25.9 million 2 3 - $1.4 million
Sacramento Kings 10 - $34.2 million 1 1 - $0.5 million
Chicago Bulls 6 - $31.9 million 1 5 - $2.4 million
Los Angeles Clippers 4 - $33.5 million 2** 6 - $2.8 million
Minnesota Timberwolves 8 - $35.0 million 2** 2 - $0.9 million

* Includes Dwyane Wade.
** Minnesota's own pick could go to the Clippers if it is outside of the top 10.

So let's see what this means with one of the teams above as an example. How about the Clips? They currently have $33.5 million in contracts committed for the 2010-11 season to four players. Assuming they renounce everyone else, they would get six cap holds placed on them for the minimum, roughly another $2.8 million. In addition, they hold their own first-round pick and potentially Minnesota's (though it's top-10 protected, so it's not likely the Clips get it). Let's assume they don't, so add another minimum cap hold – now we are at $3.3 million. Currently the Clips have the 10th-worst record in the league, and assuming they earned the 10th pick as a result of the Draft Lottery they would have a hold placed on them of $1.9 million according to the 2010-11 Rookie Contract Salary Scale.

NOTE: As Jim points out in the comments below, if one of these teams were to sign another player, that player would replace one of the minimum salary cap holds when determining the team's total cap number.

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View Jason Fleming Archive When you add all that up the Clips are now on the hook for $38.7 million – or $5.2 million than it seems at the moment. What does all of that mean? It means if the Clips want to have the cap space to sign LeBron James this summer, they better hope the salary cap number comes in at over $55 million.

According to all reports – and of course none of this is locked until the end of June – that's just not going to happen.

This same issue would also effectively remove Minnesota (they could have three first-round picks) and Sacramento from the running. It may also remove Chicago, depending on how the cap figure shakes out. In addition, it means the Knicks wouldn't have room for two MAX players, even if they agreed to a buyout with Eddy Curry, unless he gave back significant money (which, again, won't happen).

This, in essence, leaves the Miami HEAT as the only team who can have two MAX slots available – and they'd have that ability even if Dwyane Wade signed elsewhere.

This free agency period is going to get very interesting. (Yes, I realize that's not new and probably an understatement.)

Read more: http://www.hoopsworld.com/Story.asp?story_id=15420#ixzz0gbswtEH0


the lake show
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looks like some teams won be

looks like some teams won be able to get one max free agent and the knicks wont be able to get 2 and thats without resigning tmac if the capisnt over 55mil

Mr. Basketball
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he made a mistake, clips

he made a mistake, clips have 5 under contract for next year for a total of 33.5 million. he said 4 for 33.5 million.

Muggsy
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Business

That's business for you. I don't know why these analyists hype fans up saying a team can sign 2 if not 3 players like Wade, James, Bosh all in NY, like a most recent post on NBA.com by Shaun Powell(I think it was him). All it does is catch your attention, but it's not even remotely possible. Not sure why you guys are giving Quincey negatives on this post, it's business reality. Reality is a &$#%#&@!.

There has to be severe cap rules in place, or the league could become very lopsided. It's there to try and make the league as balanced as possible.

the lake show
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i dont mind alot of peopel

i dont mind alot of peopel on here are young and just cant handle if they get bad news if it relates to there team.

Muggsy
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I know, but it was a good

I know, but it was a good find regardless.

Mr. Basketball
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why did i get negatives for

why did i get negatives for correcting a big mistake in the article? also, can someone explain cap holds to me?

knicksfreak
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If these calculations are

If these calculations are correct then the Knicks would have 21.9 million against their salary with this cap hold thing. That means that the Knicks would have 30 million available if the salary cap was put at 52 million for 2010. 30 million is enough to offer 2 max contracts. They dont have a 1st round pick to count against their payroll either. Nowhere in this article does it say the knicks cant afford 2 max contracts.

the lake show
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max contracts will be more

max contracts will be more then 15million knicks. these people did all the numbers and took everything into account

Mr. Basketball
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care to comment on the cap

care to comment on the cap holds mistake for the clippers...

kenk
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Cap hold

Very simple explanation - if a team has a guy with bird rights (here David Lee) they must either renounce his Bird rights or have his current salary plus (I believe 50%) count against their cap space.

Even if Knicks renounce Lee's bird rights they can still resign him but his contract will count against their cap and they can NOT go over the cap to sign him.

Hope that helps??

knicksfreak
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If the cap is 52 million

If the cap is 52 million then a max contract will be 15.3 million the first year.

the lake show
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nope another site already

nope another site already explained that even with the cap that low a max will be at least 17mill

Mr.Knick 32
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If the Knicks cannot sign 2

If the Knicks cannot sign 2 MAX players ( Which I feelthe only player that's worth the max is LeBron James) then don't expect Donnie Walsh to over pay. He doesn't over pay for FA's.

At the worst we get David Lee back and maybe target like Rudy Gay or Joe Johnson.

Sergio-Johnson-Chandler- Gallo-Lee

Douglas-Walker-Haslem-2nd Round draft pick?

They could contend for a playoff seed.

the lake show
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wouldnt be a bad team..but

wouldnt be a bad team..but if he doesnt overpay then i dont think he will get lee since he doesnt think lee is worth more then 10mill(at leats he didnt think that last year)

i doubt joe johnson would leave atlanta for that team since the hawks are much better

some site made a comment of the knicks signing one player then saving for next year and trying to get melo or some other players. if walsh is smart he wont go for the all of nothing approach this summer

Mr.Knick 32
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I said that before. Quincey

I said that before.

Quincey what happens 1st if you know

do the teams have to renounce rights first or options being picked up?

BasketBalAllan
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I can imagine that it would

I can imagine that it would be disappointing for Knicks fans to see the Knicks go through so much the last few years and only be able to contend for one of the final few playoff seeds next year in the east, which is already a bit weak as far as depth goes. They really need to shoot higher than resigning Lee and getting second tier player, the hopes have just been set way to high for them by the media.

the lake show
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i think they have to renonce

i think they have to renonce there rights first. i could be wrong though...this is a area im not real up on yet

knicksfreak
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Teams definitely have to

Teams definitely have to renounce rights first.

What is this other site that says that the max contract will be at least 17 million? I've done alot of homework on this subject and everything I find says a max contract is 30% of the salary cap

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