question about amnesty

[drzachary]

I understand the reasons that amnestying Joe won't help right now, but there's a generic question about the amnesty process that I've not seen an answer for. A lot of you are a lot smarter than me, so let me know:How does the bid process work for multi-year contracts? If the Hawks were amnesty Joe and a team bid 8M for him -- and my assumption is that Joe gets 8M from his new team and 12M from the Hawks for 2012-13 -- who pays what for the future contract years (2013-14, 2014-15, 2015-16)?Would a bidding team actually be bidding 8Mx4 (32M total?) Or would the new team's bid be effectively 8M, 21.4M, 23.2M, 24.9M for the remaining years? AHF? Anybody? Danny Ferry, are you on this forum yet?-drz(salaries from http://hoopshype.com/salaries/atlanta.htm)

[AHF]

I am operating off the assumption that the bid applies to every year of the contract (in your example, the bidding team pays $8M per season) but I have been keeping an eye open on this question and haven't seen any answer.

[Buzzard]

My understanding is a player such as JJ can sign for any length of time and we will be responsible for all years and money left over. He does not get penalized just because he signs a short contract due to his market value.

[AHF]

My understanding is a player such as JJ can sign for any length of time and we will be responsible for all years and money left over. He does not get penalized just because he signs a short contract due to his market value.

Under the amnesty bid system, JJ doesn't sign anywhere. He gets bid on by another team and gets tgets paid his entire current contract. That isn't a question.The question is how the team acquiring him pays Atlanta on a multiple year deal. Every player amnestied so far that has been acquired by bid has been a 1 year contract so it is easy: bid $2M, player gets the full contract value ($2M from new club and rest from old club), and player is a FA at the end of the season. The question is how does that work if the guy is on a 4 year contract worth $8M, $9M, $10M and $11M? Does the team (a) bid one amount for every year of the contract (e.g., the new team pays $2M every year and the old team covers the $6M-$9M each year); (b) bid separate amounts for every year (e.g., $4M in year 1, $3M year 2, $2M year 3, $3M year 4); (c.) bid only for the first year (e.g., new team pays $2M in year 1 and then old team pays the rest); etc. As far as I know, there has not been any clear public direction on this. I am assuming it is the first option (a team must bid the same amount for each year of the deal) but that is just my speculation. Edited June 26, 2012 by AHF

[Buzzard]

Under the amnesty bid system, JJ doesn't sign anywhere. He gets bid on by another team and gets tgets paid his entire current contract. That isn't a question.The question is how the team acquiring him pays Atlanta on a multiple year deal. Every player amnestied so far that has been acquired by bid has been a 1 year contract so it is easy: bid $2M, player gets the full contract value ($2M from new club and rest from old club), and player is a FA at the end of the season. The question is how does that work if the guy is on a 4 year contract worth $8M, $9M, $10M and $11M? Does the team (a) bid one amount for every year of the contract (e.g., the new team pays $2M every year and the old team covers the $6M-$9M each year); (b) bid separate amounts for every year (e.g., $4M in year 1, $3M year 2, $2M year 3, $3M year 4); (c.) bid only for the first year (e.g., new team pays $2M in year 1 and then old team pays the rest); etc. As far as I know, there has not been any clear public direction on this. I am assuming it is the first option (a team must bid the same amount for each year of the deal) but that is just my speculation.

I imagine it is B. The price we pay each year is dependent on that years pay the player gets. That way the contract can be structured in a way that suits both the team and the player.I could easily see a team signing JJ wanting the cap hit to depreciate over the years. I don't think it would be fair to have it locked in a certain way to the winning bidder.I could be wrong, but would not think there is a constraint on how the player is payed by the winning team. Edited June 26, 2012 by Buzzard

[AHF]

I imagine it is B. The price we pay each year is dependent on that years pay the player gets. That way the contract can be structured in a way that suits both the team and the player.I could easily see a team signing JJ wanting the cap hit to depreciate over the years. I don't think it would be fair to have it locked in a certain way to the winning bidder.

But this is done via a blind bidding process run not by any of the clubs but by the NBA. There is no negotiation involved. The player's contract is unchanged so they get the exact same pay. There is no cap hit to the amnestying team. The team making the bid gets the hit per what they bid.The question is whether they can bid differing amounts. If they aren't allowed to, evaluating bids is simple: highest bid wins. If competing bids can differ in years, the NBA will need to employ some kind of accounting standard incorporating the time value of money since a dollar spent in 2015 is worth less than a dollar spent in 2012. How do you differentiate between the following bids:Team A: $200,000 year 1; $2.5M year 2; $5M year 3: $9M year 4Team B: $4M year 1; $4.2M year 2; $4.2M year 3; $4.3M year 4Team c: $12M year 1; $3M year 2: $1.5M year 3; $1.2M year 4

[Buzzard]

But this is done via a blind bidding process run not by any of the clubs but by the NBA. There is no negotiation involved. The player's contract is unchanged so they get the exact same pay. There is no cap hit to the amnestying team. The team making the bid gets the hit per what they bid.The question is whether they can bid differing amounts. If they aren't allowed to, evaluating bids is simple: highest bid wins. If competing bids can differ in years, the NBA will need to employ some kind of accounting standard incorporating the time value of money since a dollar spent in 2015 is worth less than a dollar spent in 2012. How do you differentiate between the following bids:Team A: $200,000 year 1; $2.5M year 2; $5M year 3: $9M year 4Team B: $4M year 1; $4.2M year 2; $4.2M year 3; $4.3M year 4Team c: $12M year 1; $3M year 2: $1.5M year 3; $1.2M year 4

That makes sense. I thought maybe it would be a total value like say team A bids 20 mill spread out over two years, Team B bids 30 mill spread out over 4 years. But you are right, that would be much more complicated.So is it only a year deal for the winning team, then said player becomes a UFA every time?

[AHF]

So is it only a year deal for the winning team, then said player becomes a UFA every time?

The player definitely doesn't become an UFA. They get paid their contract and play under it for the duration but how teams place their bids and how they are evaluated on a multi-year contract is the big question. I am guessing teams bid knowing that their bid applies to every year of the agreement, but that is just my speculation. Edited June 26, 2012 by AHF

[Scott]

http://espn.go.com/blog/truehoop/post/_/id/33976/what-we-know-about-the-amnesty-provision

[Guest]

Per Larry Coon.....The details on the bidding process aren’t known yet. It is believed (but not officially confirmed) that teams must bid at least the minimum salary. Also, if a player has more than one year remaining, the team must bid on the full length of the contract – for example, if a player has three years remaining, then a $4 million bid means the team is committing to at least $4 million per year for three years.