The Pierce opt-out option (again) - Peter May

[Chris]

Opting out is not about getting the Celtics under the salary cap.

It's about reducing the payroll and the luxury tax.

The savings from a restructured contract for Pierce would offset the increase in Rondo's salary, and also free up money to resign guys like Ray, Nate, etc.

Yep.  An opt out and extension might be beneficial for both sides, but not for the sake of cap space.  Rather, it would be all about saving luxury tax.  For instance, if Pierce agrees to a 3 year, $45 million contract at $15 million per year, that would save ownership $6 million in salary next season, and $6 million in luxury tax.  If ownership re-invested that $12 million into the team (by, for instance, utilizing the MLE, or taking on salary in a trade), it could be a win-win for everyone.

but if he opts out, can they offer him $15M? do they have that kind of space?  he doesn't get to keep his bird rights if he opts out, does he?

Opting out has nothing to do with Bird Rights.  The only way a player can lose Bird Rights is if the team renounces their rights, or if they are traded while playing on a 1 year contract (after finishing a longer contract with that same team).

[Jeff]

Of course, the problem with this is that it will tie the C's hands in 2012, if they want to be rebuilding.  This is the kind of contract that can really strap them going forward...but it might be too good to pass up from a business-side.  

It will be interesting to watch, but my money is on him not opting out.

true, but I still feel like KG's contract is going to be an expiring contract trade chip that the team will be happy to use and some cash strapped team will be happy to accept in trade

[jpd985]

Of course, the problem with this is that it will tie the C's hands in 2012, if they want to be rebuilding.  This is the kind of contract that can really strap them going forward...but it might be too good to pass up from a business-side.  

It will be interesting to watch, but my money is on him not opting out.

true, but I still feel like KG's contract is going to be an expiring contract trade chip that the team will be happy to use and some cash strapped team will be happy to accept in trade

Wasn't the same thing said about Ray Allen's contract?

[Roy Hobbs]

Opting out is not about getting the Celtics under the salary cap.

It's about reducing the payroll and the luxury tax.

The savings from a restructured contract for Pierce would offset the increase in Rondo's salary, and also free up money to resign guys like Ray, Nate, etc.

Yep.  An opt out and extension might be beneficial for both sides, but not for the sake of cap space.  Rather, it would be all about saving luxury tax.  For instance, if Pierce agrees to a 3 year, $45 million contract at $15 million per year, that would save ownership $6 million in salary next season, and $6 million in luxury tax.  If ownership re-invested that $12 million into the team (by, for instance, utilizing the MLE, or taking on salary in a trade), it could be a win-win for everyone.

but if he opts out, can they offer him $15M? do they have that kind of space?  he doesn't get to keep his bird rights if he opts out, does he?

We'd still have his Bird rights unless we "renounced" him.  When you renounce a player, you release his cap hold, and give up Bird rights in the process.

Opting out simply makes Pierce an unrestricted free agent, much like Ray Allen or any of our other Bird free agents.

[wdleehi]

If it is three years at 15, then Pierce can go into it expecting to recieve only 30 mil (with the one year lost to lock out)


This changes drastically if you reduce the number.



So the question becomes, does Pierce think he can make 9 million in 2012?  7 million (then 14 per works).  5 million (then 13 per works)


Or does he want all that money now thinking this could be the last year I play in the NBA?

[Moranis]

If it is three years at 15, then Pierce can go into it expecting to recieve only 30 mil (with the one year lost to lock out)


This changes drastically if you reduce the number.



So the question becomes, does Pierce think he can make 9 million in 2012?  7 million (then 14 per works).  5 million (then 13 per works)


Or does he want all that money now thinking this could be the last year I play in the NBA?

that is assuming there is in fact a lockout.  I know it appears headed that way, but it could certainly still be worked out.  The numbers probably change a bit in both length and amount of a deal if Pierce can play all the way through.

[Who]

I think Pierce will need four seasons and closer to $50 million for it to be worthwhile for him to opt out of his contract.

[BballTim]

If it is three years at 15, then Pierce can go into it expecting to recieve only 30 mil (with the one year lost to lock out)


This changes drastically if you reduce the number.



So the question becomes, does Pierce think he can make 9 million in 2012?  7 million (then 14 per works).  5 million (then 13 per works)


Or does he want all that money now thinking this could be the last year I play in the NBA?

  I'd expect a lockout along the lines of the previous one, with games starting in Jan/Feb.

  Unrelated, but I think I'm the first to predict that BBD will play the role of Shawn Kemp in the lockout and gain a boatload of weight under the assumption that he'd have the summer to work it off.

[wdleehi]

If it is three years at 15, then Pierce can go into it expecting to recieve only 30 mil (with the one year lost to lock out)


This changes drastically if you reduce the number.



So the question becomes, does Pierce think he can make 9 million in 2012?  7 million (then 14 per works).  5 million (then 13 per works)


Or does he want all that money now thinking this could be the last year I play in the NBA?

that is assuming there is in fact a lockout.  I know it appears headed that way, but it could certainly still be worked out.  The numbers probably change a bit in both length and amount of a deal if Pierce can play all the way through.

But if you are a player making this decision now, going off the believe that there will be is the best way to make the best financial choice.  

[wdleehi]

If it is three years at 15, then Pierce can go into it expecting to recieve only 30 mil (with the one year lost to lock out)


This changes drastically if you reduce the number.



So the question becomes, does Pierce think he can make 9 million in 2012?  7 million (then 14 per works).  5 million (then 13 per works)


Or does he want all that money now thinking this could be the last year I play in the NBA?

  I'd expect a lockout along the lines of the previous one, with games starting in Jan/Feb.

  Unrelated, but I think I'm the first to predict that BBD will play the role of Shawn Kemp in the lockout and gain a boatload of weight under the assumption that he'd have the summer to work it off.

But if you were a player making such a financial decision, would you feel safe assuming that?


What happens if the lockout last a season and a half?  Are you ready to take that chance?

[Chris]

Of course, the problem with this is that it will tie the C's hands in 2012, if they want to be rebuilding.  This is the kind of contract that can really strap them going forward...but it might be too good to pass up from a business-side.  

It will be interesting to watch, but my money is on him not opting out.

true, but I still feel like KG's contract is going to be an expiring contract trade chip that the team will be happy to use and some cash strapped team will be happy to accept in trade

Possibly.  But as we saw this trade deadline, if you do not have assets to add to the expiring contract, you are not going to be getting anyone, unless the other team is trying to get rid of them for some other reason.

However, if the C's have cap space, suddenly they are much more attractive trade partners, because they can take on salary without sending any back.