paying in excess of $500,000 to buyout a foreign player...
Posted: Fri May 30, 2008 9:20 pm
So I'm still confused to how this works. Is it possible to go through an example? I understand it's treated the same way as a signing bonus, but what is the process here?
So lets a foreign player has a big buyout associated with his contract.
Does the NBA team offer the player a contract first? And then, JUST FOR CAP PURPOSES, the amount in excess of $500,000 needed to buyout the foreign player is added onto the contract, treated as a signing bonus? (but the player doesn't actually receive that extra money right?
And what happened in Navarro's case, since he just got a 1 year deal. Did he get the minimum with the signing bonus added on? And is there an exception that allows a team to use the added signing bonus amount or does the NBA team have to make it work?
Stop reading here if you understand and don't want an example haha
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So if a player has a $3 million buyout with his foreign team and the Clippers want to sign him for to a 5 year, $10 million dollar deal with $2 million apiece, 100% guaranteed.
Year 1: $2 million
Year 2: $2 million
Year 3: $2 million
Year 4: $2 million
Year 5: $2 million
So to buy-out the foreign player, $2.5 million would be counted as a signing bonus? since there aren't ETO's or Option Years and since it's 100% guaranteed, $500,000 would be added each season? So would it just be 2.5 million as the cap charge per season?
And this player does not actually receive the $2.5 million right? In a signing bonus, he'd get the full $2.5 million at the time, but this situation is just treated like a signing bonus right?
and if we only had the minimum salary exception to use, it wouldn't work since this signing bonus would push the money over, right? And since a player always has to be paid the minimum salary, we can't reduce that portion of the money he's paid (especially since the amount added on isn't actually going to the player).
Thanks in advance, I just wasn't sure how this process worked.
So lets a foreign player has a big buyout associated with his contract.
Does the NBA team offer the player a contract first? And then, JUST FOR CAP PURPOSES, the amount in excess of $500,000 needed to buyout the foreign player is added onto the contract, treated as a signing bonus? (but the player doesn't actually receive that extra money right?
And what happened in Navarro's case, since he just got a 1 year deal. Did he get the minimum with the signing bonus added on? And is there an exception that allows a team to use the added signing bonus amount or does the NBA team have to make it work?
Stop reading here if you understand and don't want an example haha
______________________________________________________
So if a player has a $3 million buyout with his foreign team and the Clippers want to sign him for to a 5 year, $10 million dollar deal with $2 million apiece, 100% guaranteed.
Year 1: $2 million
Year 2: $2 million
Year 3: $2 million
Year 4: $2 million
Year 5: $2 million
So to buy-out the foreign player, $2.5 million would be counted as a signing bonus? since there aren't ETO's or Option Years and since it's 100% guaranteed, $500,000 would be added each season? So would it just be 2.5 million as the cap charge per season?
And this player does not actually receive the $2.5 million right? In a signing bonus, he'd get the full $2.5 million at the time, but this situation is just treated like a signing bonus right?
and if we only had the minimum salary exception to use, it wouldn't work since this signing bonus would push the money over, right? And since a player always has to be paid the minimum salary, we can't reduce that portion of the money he's paid (especially since the amount added on isn't actually going to the player).
Thanks in advance, I just wasn't sure how this process worked.