Author Topic: How do the NBA salary cap rules really work?  (Read 13897 times)

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Re: How does the NBA salary cap rules really work
« Reply #15 on: May 21, 2019, 01:05:32 PM »

Offline otherdave

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Thanks Nick,

but why is the Room Exception amount only half (approximately) of the standard MLE - what is the philosophy behind that decision in the CBA.  The teams that were  under the cap at some point in the summer get penalized.  They can't get an "average" player at 9.2 million.  They were "responsible" with their payroll, and as a reward (?), they only get to sign a player for HALF (4.7 mil) of the average wage.

I am probably missing something here - HELP

Re: How does the NBA salary cap rules really work
« Reply #16 on: May 21, 2019, 01:06:38 PM »

Offline Monkhouse

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In order to have cap space for a max, we would need to renounce all free agents, team options, cap holds, and get rid of draft picks. [Ainge generally gives about 15% extra to the draft picks, this is optional.]

Even then, we would not enough space for 10 year vet which would average over 36 million annually. We can only give the max to anyone from rookie to 7 year vet.

People need to understand we already gave the max 2 to players already in Horford and Hayward. Irving has no effect on our cap space, which is why its impertinent that we re-sign him. Whether or not you want him back, he could be an trade asset down the line.
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Re: How does the NBA salary cap rules really work
« Reply #17 on: May 21, 2019, 01:33:55 PM »

Offline nickagneta

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Thanks Nick,

but why is the Room Exception amount only half (approximately) of the standard MLE - what is the philosophy behind that decision in the CBA.  The teams that were  under the cap at some point in the summer get penalized.  They can't get an "average" player at 9.2 million.  They were "responsible" with their payroll, and as a reward (?), they only get to sign a player for HALF (4.7 mil) of the average wage.

I am probably missing something here - HELP
People under the cap are rewarded by being able to sign a much better than average player with their cap space.

A team with cap space, depending on how much cap space they open up, can land 1 or 2 max level players and then still have the Room Exception to add a complementary piece.

A team over the cap can just add an MLE level player and a lower level player every other year with the BLE.

Huge difference.

Re: How does the NBA salary cap rules really work
« Reply #18 on: May 21, 2019, 01:41:28 PM »

Offline otherdave

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Ok thanks Nick - that makes a lot of sense - I had it twisted backwards.

Re: How does the NBA salary cap rules really work
« Reply #19 on: May 21, 2019, 01:43:35 PM »

Offline nickagneta

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Ok thanks Nick - that makes a lot of sense - I had it twisted backwards.
TP my man. Hope I helped.

Re: How does the NBA salary cap rules really work
« Reply #20 on: May 21, 2019, 02:15:16 PM »

Offline BitterJim

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In order to have cap space for a max, we would need to renounce all free agents, team options, cap holds, and get rid of draft picks. [Ainge generally gives about 15% extra to the draft picks, this is optional.]

Even then, we would not enough space for 10 year vet which would average over 36 million annually. We can only give the max to anyone from rookie to 7 year vet.

People need to understand we already gave the max 2 to players already in Horford and Hayward. Irving has no effect on our cap space, which is why its impertinent that we re-sign him. Whether or not you want him back, he could be an trade asset down the line.

It's actually 20% over the rookie scale, but that's not important

What may be important is that cap holds for picks are now 120% of the rookie scale, so you can no longer "create" space by signing free agents before you sign your rookies. You could, however, sign rookies to less than 120% of the scale and then sign FAs, but rookies/their agents have basically no incentive to sign the lesser contract just to help the team
I'm bitter.

Re: How does the NBA salary cap rules really work
« Reply #21 on: May 21, 2019, 02:22:54 PM »

Offline Monkhouse

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In order to have cap space for a max, we would need to renounce all free agents, team options, cap holds, and get rid of draft picks. [Ainge generally gives about 15% extra to the draft picks, this is optional.]

Even then, we would not enough space for 10 year vet which would average over 36 million annually. We can only give the max to anyone from rookie to 7 year vet.

People need to understand we already gave the max 2 to players already in Horford and Hayward. Irving has no effect on our cap space, which is why its impertinent that we re-sign him. Whether or not you want him back, he could be an trade asset down the line.

It's actually 20% over the rookie scale, but that's not important

What may be important is that cap holds for picks are now 120% of the rookie scale, so you can no longer "create" space by signing free agents before you sign your rookies. You could, however, sign rookies to less than 120% of the scale and then sign FAs, but rookies/their agents have basically no incentive to sign the lesser contract just to help the team

Ah, thanks for the correction. I guess it must've changed, because I strictly remember it being 15%.

Yeah, I figured that point wasn't necessary to add.
"I bomb atomically, Socrates' philosophies and hypotheses
Can't define how I be dropping these mockeries."

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It's based on your perspective, quite simply
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Re: How does the NBA salary cap rules really work
« Reply #22 on: May 21, 2019, 02:35:39 PM »

Offline jambr380

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Thanks Nick,

but why is the Room Exception amount only half (approximately) of the standard MLE - what is the philosophy behind that decision in the CBA.  The teams that were  under the cap at some point in the summer get penalized.  They can't get an "average" player at 9.2 million.  They were "responsible" with their payroll, and as a reward (?), they only get to sign a player for HALF (4.7 mil) of the average wage.

I am probably missing something here - HELP

I know nick answered you below and he obviously has a great grasp of the CBA, but your reasoning in this specific instance isn't wrong. It always bothered me that a team could be like $2M below the cap and still only get to use the Room Exception when a team that is over the cap (but not in the tax) gets a much bigger exception.

Sure, typically a team that has any cap space at all after signing FAs, etc probably had more than the MLE to begin with in the first place, but I've always thought (especially during the off-season that we signed Hayward) that once they are basically done signing players that they should get the same MLE as a team over the cap. You point about teams that spend responsibly should resonate with the people who create the rules.

Re: How does the NBA salary cap rules really work
« Reply #23 on: May 21, 2019, 03:17:03 PM »

Offline BitterJim

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Thanks Nick,

but why is the Room Exception amount only half (approximately) of the standard MLE - what is the philosophy behind that decision in the CBA.  The teams that were  under the cap at some point in the summer get penalized.  They can't get an "average" player at 9.2 million.  They were "responsible" with their payroll, and as a reward (?), they only get to sign a player for HALF (4.7 mil) of the average wage.

I am probably missing something here - HELP

I know nick answered you below and he obviously has a great grasp of the CBA, but your reasoning in this specific instance isn't wrong. It always bothered me that a team could be like $2M below the cap and still only get to use the Room Exception when a team that is over the cap (but not in the tax) gets a much bigger exception.

Sure, typically a team that has any cap space at all after signing FAs, etc probably had more than the MLE to begin with in the first place, but I've always thought (especially during the off-season that we signed Hayward) that once they are basically done signing players that they should get the same MLE as a team over the cap. You point about teams that spend responsibly should resonate with the people who create the rules.

Isn't the room exception only if you used your cap room? So you could keep the full MLE if you don't renounce it to get under the cap

It looks like this is addressed in question 26. If you are under the cap, but your exceptions (MLE, BAE, TPEs, etc) put you over the cap, you are treated as being over the cap. You can renounce those exceptions to help get you under the cap, or keep them and stay over. You also lose them automatically if your team salary+all holds/exceptions is still under the cap

So, there isn't any situation where a team under the cap has less space to sign someone than a team that's over the cap (unless the under-the-cap team has already signed a big money free agent with cap space). Larry Coon also goes into a bit of the logic behind this rule in question 26:

Quote from: Larry Coon
There is logic behind this. The whole idea behind an "exception" is that it is an exception to the rule which says a team cannot go over the salary cap. In other words, an exception is a mechanism which allows a team to function above the cap. If a team isn't over the cap, then the concept of an exception is moot. Therefore, if a team's team salary ever drops this far, its exceptions go away. A rule of thumb is that a team may have either exceptions or cap room, but it can't have both at the same time. However, a team in this situation does qualify to use the Room Mid-Level exception (see question number 25).

I don't think that really addresses your point, though
I'm bitter.

Re: How does the NBA salary cap rules really work
« Reply #24 on: May 21, 2019, 03:26:49 PM »

Offline nickagneta

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Great stuff Bitter Jim. TP.

Should probably have stated the renouncing of the exception if only slightly under the cap. Thing is, in practice, it almost never happens. Teams almost never get just under the cap. If they do salary wise, it's usually their cap holds that put them over. No one would renounce cap holds to get just a little under the cap.

And teams that with cap holds are just under the cap tend to renounce those cap holds to open up space that is greater than the MLE.

As for the logic of why the taxpayer MLE, Room Exception and BLE are set at the levels they are at less than the MLE(percentage of the MLE), I have no idea.

Re: How do the NBA salary cap rules really work?
« Reply #25 on: May 21, 2019, 03:52:53 PM »

Offline jambr380

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Solid points guys and thanks for the research. I stated in another thread (and maybe even earlier in this thread) that we should have an open thread for cap questions and this makes sense to be the one. The CBA FAQ is really an amazing feat by Larry Coon, but I can understand people not feeling up for looking through the whole thing for the answer to their question.

Besides, if one person has a question, others probably do, too. We have very limited access to Saltlover nowadays, but you both have done a fantastic job stepping up...and you guys know you love showing off your knowledge  :P

Re: How do the NBA salary cap rules really work?
« Reply #26 on: May 21, 2019, 05:24:08 PM »

Offline Csfan1984

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I was on the site two days looking at designing a S&T scenario of KD to the C's. Wasn't sure as to if KD's out going number (if he had a 20% pay raise and going to a team over the cap) was still only counting as his last year's cap number? I do understand a third team would be needed to absorb cap part.

Re: How do the NBA salary cap rules really work?
« Reply #27 on: May 21, 2019, 05:29:31 PM »

Offline nickagneta

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I was on the site two days looking at designing a S&T scenario of KD to the C's. Wasn't sure as to if KD's out going number (if he had a 20% pay raise and going to a team over the cap) was still only counting as his last year's cap number? I do understand a third team would be needed to absorb cap part.
I believe the bigger problem is Boston being over the apron at the time of the deal. It's not the money involved. And Boston would not be affected by BYC problems or any of that, that's GSW's problem, if that actually applies here. If it does, it's just another reason why GSW wouldn't do a sign and trade of Durant.

Re: How do the NBA salary cap rules really work?
« Reply #28 on: May 21, 2019, 06:35:19 PM »

Offline Csfan1984

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I was on the site two days looking at designing a S&T scenario of KD to the C's. Wasn't sure as to if KD's out going number (if he had a 20% pay raise and going to a team over the cap) was still only counting as his last year's cap number? I do understand a third team would be needed to absorb cap part.
I believe the bigger problem is Boston being over the apron at the time of the deal. It's not the money involved. And Boston would not be affected by BYC problems or any of that, that's GSW's problem, if that actually applies here. If it does, it's just another reason why GSW wouldn't do a sign and trade of Durant.
I definitely know there are four teams that would be suitable third parties and C's have all those first round picks to entice a team to assit. I do think BYC would apply in this case and C's can get under the apron but I don't see either as a big hurtle if the right third team comes in. Biggest issue is I really don't feel KD would leave GS for Boston though. Warriors are the best shot and continued winning. NYK is a maybe as he may feel he can grow his brand there.

Re: How do the NBA salary cap rules really work?
« Reply #29 on: May 21, 2019, 07:29:21 PM »

Offline nickagneta

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I was on the site two days looking at designing a S&T scenario of KD to the C's. Wasn't sure as to if KD's out going number (if he had a 20% pay raise and going to a team over the cap) was still only counting as his last year's cap number? I do understand a third team would be needed to absorb cap part.
I believe the bigger problem is Boston being over the apron at the time of the deal. It's not the money involved. And Boston would not be affected by BYC problems or any of that, that's GSW's problem, if that actually applies here. If it does, it's just another reason why GSW wouldn't do a sign and trade of Durant.
I definitely know there are four teams that would be suitable third parties and C's have all those first round picks to entice a team to assit. I do think BYC would apply in this case and C's can get under the apron but I don't see either as a big hurtle if the right third team comes in. Biggest issue is I really don't feel KD would leave GS for Boston though. Warriors are the best shot and continued winning. NYK is a maybe as he may feel he can grow his brand there.
If BYC applies, and if Durant gets a max contract it appears it does apply, then it would be up to GSW to figure out how to make it work since their outgoing salary wouldn't be matching their incoming and only they know how they would want to handle it.

There would most likely have to be teams involved willing to send GSW salary to make up the difference. Those teams would need to be under the cap and there most likely would need to be a bunch of picks moving between the teams involved.

It's all really complicated and complex and I really see no reason for GSW to do it.

Then you have the Celtics apron problem. They are over it currently and would need to do a bunch of stuff to be under it after the trade and then would be hardcapped.

Don't see Ainge wanting to be hardcapped and give up other players or right to re-sign players to make the deal work.

So Boston doesn't look like they would do the trade and I don't see a very intelligent Warriors front office jumping through hoops to get the best or 2nd best player in the league to a team that could be perfectly positioned to end the Warriors title run after they get Durant.

The whole "get Durant to Boston" is pretty much a Boston fan's dream but it really has no chance of ever happening in real life.

You can go ahead and do all the research and actually create a scenario in which this trade is possible. But it will be all for nothing because how you run a business has to come into effect and neither Ainge nor the GSW front office would do this.