paying in excess of $500,000 to buyout a foreign player...

[bgwizarfan]

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
______________________________________________________


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.

[Dunkenstein]

Why do you regularly write essay-like queries with multiple questions in them? As far as I'm concerned, you're asking someone who might have the answers to work much to hard to get you the answers.

So here's what I think you're asking. At the same time as a team signs a player who has a buyout from a foreign team, it sends that team $500,000. This is not a signing bonus. If the player still owes his original team additional buyout money, arrangements are made between that team and the player on a schedule to pay off what he owes.

If the player is a first round pick, what he owes his original team comes out of his rookie scale contract or his existing bank account.

If the player is a second round pick or a free agent, his NBA team may give him a contract larger than his worth in the marketplace in order to help the player pay his buyout. In such a case the player will have to be signed using cap room, the BAE or the MLE, but not the minimum salary exception.

In a recent article, Chad Ford discuses how late first round picks like Tiago Splitter are staying in Europe because they don't want to take the pay cut mandated by the rookie scale to play in the NBA. Agents of European players are now suggesting that such players be drafted in the second round where they can get higher salaries and have the teams compensate them for the buyouts they have to pay over and above the $500,000 that the NBA team can pay.

http://sports.espn.go.com/nba/draft2008 ... otes080529

[bgwizarfan]

^ i get that portion, but whats the whole deal about anything in excess of $500,000 is treated as a signing bonus as far as the CBA is concerned? I mean I know that's the case, so I guess I'm asking what that means. If it's treated as a signing bonus, then I'd think any amount over $500,000 gets spread over each non-ETO or Option season based on the percentage of base compensation guaranteed each year. But how do they get to that point and why would it count like a signing bonus in the 1st place?

[Dunkenstein]

If the NBA team agrees to pay the entire balance of the buyout that the player owes his original team at the time the player signs his first NBA contract, for cap purposes they are giving him a signing bonus (over and above his salary) which is then transmitted to his original team to satisfy his obligation to his original team.

[bgwizarfan]

If the NBA team agrees to pay the entire balance of the buyout that the player owes his original team at the time the player signs his first NBA contract, for cap purposes they are giving him a signing bonus (over and above his salary) which is then transmitted to his original team to satisfy his obligation to his original team.

great, that's what i was looking for... so a team could, in essence be limited to how much of the buyout they can pay based on how much cap room they have or the type of exception they're using. I guess it goes both ways, though - if the NBA team is paying the original team instead of the player paying the team, the player should expect to get paid a little less by the NBA team anyway. That logic now makes sense, thanks.