As the NBA Lockout tacks on another day and the Cleveland Cavaliers didn’t get to host the Indiana Pacers last night as originally scheduled, the latest buzz surrounding negotiations revolves around the much-discussed amnesty clause which will allow each of the 30 teams to rid itself of one poor contract.
The exact logistics of said clause are still being debated, but it is looking more and more like the Cavaliers will be able to move into the future without one of their bulky contracts, as the league owners want to be able to adhere to a harder salary cap with added ease. ESPN’s Marc Stein reports on TrueHoop that this year’s amnesty clause will be a bit different than that of the 2005 variety wherein teams merely received luxury tax relief on one player. This time around, it’s looking like teams will be able to rid itself of 75 percent of a players’ remaining compensation.
With luxury tax figures looking to be crippling for smaller markets or owners who opt to run their teams as the tightest of ships, ridding a mistake-laden contract is the quickest way to do so. With the Cavaliers swiftly moving from spend-at-all-costs to a more business-like approach, Dan Gilbert and Chris Grant have been making tactical moves which already provided flexibility in the event of a more-strict salary cap structure; the trades of players like Mo Williams and JJ Hickson for draft selections and/or younger, less-expensive talent were only one part of the equation.
Per Stein’s report, the team will be able to likely do one of two things: select a player presently on the team’s roster and pay him to what would amount to a buy-out of 75 percent of his cotract, or hold on to the clause as if it were in the form of a coupon which would expire within the next several seasons in the event that a team which has already rid itself of bad contracts to use on a potential future investment gone awry. The Cavaliers, in this instance, fall somewhere in between. The $15 million 2011-12 salary of Antawn Jamison is the highest on the team, but his deal also expires after this season which could make his contract a highly-attractive asset in a soft-cap structure. Baron Davis is set to make $13.9 million this season, but has a player option of $14.85 million in 2012-13 – an option he would assuredly pick up. But Davis is also slated to be the team’s starting point guard in 2011-12 as well as the chief mentor of the point guard of the future in Kyrie Irving.
A buy-out of Davis’ deal, if the team were to opt for the “now” edition of the amnesty clause would cost the Cavaliers over $21 million without having any services rendered. But it would also take this year’s payroll to a hair over $40 million, not accounting for the guaranteed deals which will be signed by rookies Irving and Tristan Thompson. A move of this magnitude would take the Cavaliers from their present spot of 12th-largest payroll to one which would 25th, not accounting for other teams using their clause. But this would also force Irving, into the spotlight on Day 1, working alongside fellow point guard Ramon Sessions.
If the Cavaliers chose to hold on to their clause, letting Davis work with Irving while Jamison’s contract expires or gets moved to a team looking for a 30-something stretch forward, this will allow Chris Grant to take a gamble on a longer-term deal for a free agent in the near future. If it pans out, the team becomes better; if it doesn’t, the front office can carry on as if it never happened. This would also become more of a likely option in the event the amnesty clause agreed upon forbids teams from buying out players acquired via trade, though the “trade” wrinkle could only be on a going-forward basis.
Needless to say, the elephant in the bargaining room continues to be the split of the basketball-related revenue. Until this is agreed upon, none of the above matters. However, negotiating continues, other portions of the new Collective Bargaining Agreement are starting to take shape. What the Cavaliers do with their shiny new toys remains to be seen. The answer may not be as obvious as it seemed just a few days earlier.