FanPost

How to handle bad contracts.

 

Fans love to complain about all of the players with bad contracts in the NBA, and during this lockout the owners are complaining about bad contracts as well. Now solutions like partially guaranteed contracts and contract amnesty are not real popular options for players for very obvious reasons. If I were a NBA player these options would be a non-starter for me.  Yet owners do have a point especially where these bloated contracts effect their cap space and ability to bring in better players. So how do you fix it? Follow after the jump.



Now players like Rashard Lewis, Gilbert Arenas, and Emeka Okafor are often cited as the poster children for what is wrong with NBA contracts. These are players who are paid like stars but who do not perform like stars on the court. However, all three of these guys and others like them are still useful players. For teams with players like these I would propose a new type of trade exception.

 

With this trade exception idea, a team could petition the league for this exception and it would allow them to trade one player every three years for the purpose of getting rid of their contract. The team trading the bad contract would not be required to take the corresponding number of salary in return. In short they would be allowed to dump one players salary every 3 years. For the team acquiring the bad contract, they would be allowed to only count 50% of that players yearly salary against their cap. So in the case of Gilbert Arenas if the magic opted to trade him the team getting him would only have 9.6 million count against their cap instead of 19.2 million. While only half the player's salary would count for cap purposes the player would still receive his full salary, after all the contract he agreed to was negotiated in good faith. Also when that player's contract expires the full annual salary will come off the cap. So even though in the case of Arenas only 11 million would count against the cap at the start of his last season, the team could deduct 22 million off the cap at the end of the year.

 

Now some players because of health issues may not have much trade value. For those teams I would permit them to apply for a salary cap waiver after they have paid out 60% of the players contract.  This cap waiver would allow a team with a player with a bad contract that they cannot move via trade, say an Eddy Curry type, to deduct the entire amount of his salary from the cap. So had the Knicks received such a waiver for Curry, then for cap purposes his salary would have been zero. However the team would still be required to pay his full salary.

 

These are two strategies that allow teams some relief from bad contracts and allows the players to receive the money that they negotiated in good faith.

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