Amnesty program includes secondary waivers

And what, you may ask, is secondary waivers?

The details still need to be ironed out in “secondary negotiations” between lawyers from the league office and the, ahem, union, but there is going to be a bidding process for players released under the amnesty clause of the new collective bargaining agreement.

How will that bidding process work?

Something like this:

Let’s say the Orlando Magic decide to release Gilbert Arenas, who has $62 million remaining on his contract over the next three years, including $19.2 milion in the upcoming season.

Arenas would first be placed on waivers, and it is safe to say that nobody is going to claim that contract during the 48-hour waiver period. But Arenas would then be placed on “secondary waivers,” and teams will space below the salary cap would be allowed to place bids on him. If the Sacramento Kings, to use a random example, were willing to spend $6 million to acquire him, and no one else made a higher bid, then he would become the Kings’ property (and the money the Magic would have to pay him this season would be reduced by whatever Arenas’ new team is paying him.)

Remember, all teams now must spend a minimum of 85 percent of the cap (rising to 90 percent in Year 3 and beyond) , and the Kings are currently $17.5 million below the minimum. So this will give many of the under-the-cap teams (a group that also includes Denver, Indiana, New Jersey, Washington and New Orleans) to do some bargain hunting prior to the opening of training camps Dec. 9.

“That’s what the clause is in there for,” a party familiar with the impending process told Ira Winderman of the South-Florida Sun Sentinel. ‘It’s so the Lakers can’t go in and scoop up all the players.’

Here is more on the amnesty provision from Howard Beck of The New York Times:

“Arenas is a prime candidate because of his bad knees, his diminishing skills and his reputation for causing locker-room friction. Orlando, which is fearful of losing Dwight Howard to free agency next summer, cannot afford poor team chemistry. Cutting Arenas would not give the Magic any cap room, but it would drop them below the tax threshold, saving them millions. (Rashard) Lewis is another obvious candidate, after his production plummeted last season (11.7 points, 5.1 rebounds, .433 field-goal percentage). However, waiving Lewis would leave the Wizards with just $19 million in salaries — $30 million below the minimum payroll. They would have to sign several players just to comply with the rules, no doubt creating more bad contracts in the process. Perhaps the most enticing candidate is (Brandon) Roy, a Portland Trail Blazers guard. Just 27, Roy is a three-time All-Star and a dazzling scorer. But he has chronic knee problems and played just 47 games last season, his scoring average plummeting to 12.2 points. He is owed $68.3 million over the next four seasons. Paul Allen, the Blazers’ billionaire owner, can surely afford the bill, but waiving Roy will not create cap room.”

 

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  1. Alex says

    Chris, seems like a great system to keep a competitive balance for under the cap teams, but have you spoken to any of the players about this? For example, Mike Miller took a paycut to sign with the Heat for a championship run. If he is amnestied, and lets say a non-competitive team (such as Sacramento), won his services, I would assume he would not be too happy about it. Do players have any say on who picks up their services?

    • says

      It would appear they will not. But again, have to see what the secondary waiver rules look like before you can say with any conviction that this guy or that guy is going to get amnestied — especially since the amnesty provision can only be used once during the CBA, and it will make sense for many teams to keep it in their back pocket for future years.

  2. Mark says

    Chris: really enjoy your website. This has become my first place for basketball news. The next few weeks will be very interesting as teams look to fill their rosters.

      • Sobie says

        When a player is released under the amnesty rule /(example-Chauncey Billips) and is owed 14 million, when he signs with another team,let say for 6 million- does chauncy make 20 million for the year or does the previous team (Knicks) pay only the difference after the 6 million( which would be 8 million).

  3. flyriv says

    In the above example, would the Kings be paying $6 million to have Arenas for just this year, or for the remainder of his contract?

    • says

      It depends what they bid, flyriv, and whether the process is a blind bidding process or not. These are the details the lawyers still have to work out. But let’s just say the Kings bid $6 million for the upcoming season plus $5 million for the following season? Would that trump a $10 million, one-year bid from a different team? That is one of the things they will have to determine between now and Dec. 9

      • DanH says

        I expect teams’ bids will be restricted to terms of identical length to the original contract – there is no other way to objectively state which is the better deal.

  4. paulpressey25 says

    They really should have this process with any players whose contracts are bought out and not just the amnesty guys. Would be a minor but appreciated salve for the smaller markets. Give them a shot at guys who have already been guaranteed 100% of their contract dollars but still want to play in the league.

    • says

      Paul, you may have discovered the first tweak to the NEXT collective bargaining agreement. I agree that it would make sense, and not only would it give the small market teams a boost, it would give fringe playoff-bound teams a boost beginning March 1 each season when the February buyouts are all done.

Trackbacks

  1. [...] Chris Sheridan of Sheridanhoops.com: And what, you may ask, is secondary waivers? The details still need to be ironed out in “secondary negotiations” between lawyers from the league office and the, ahem, union, but there is going to be a bidding process for players released under the amnesty clause of the new collective bargaining agreement. How will that bidding process work? Something like this: Let’s say the Orlando Magic decide to release Gilbert Arenas, who has $62 million remaining on his contract over the next three years, including $19.2 milion in the upcoming season. Arenas would first be placed on waivers, and it is safe to say that nobody is going to claim that contract during the 48-hour waiver period. But Arenas would then be placed on “secondary waivers,” and teams will space below the salary cap would be allowed to place bids on him. If the Sacramento Kings, to use a random example, were willing to spend $6 million to acquire him, and no one else made a higher bid, then he would become the Kings’ property (and the money the Magic would have to pay him this season would be reduced by whatever Arenas’ new team is paying him.) Remember, all teams now must spend a minimum of 85 percent of the cap (rising to 90 percent in Year 3 and beyond) , and the Kings are currently $17.5 million below the minimum. So this will give many of the under-the-cap teams (a group that also includes Denver, Indiana, New Jersey, Washington and New Orleans) to do some bargain hunting prior to the opening of training camps Dec. 9. [...]

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