| Author | Thread |
| AUTOADVERT |
|
VDesai
Posts: 43301 Alba Posts: 44 Joined: 10/28/2003 Member: #477 USA |
Buying out contracts still counts against your cap.
|
|
VDesai
Posts: 43301 Alba Posts: 44 Joined: 10/28/2003 Member: #477 USA |
Here's the rule for buyouts...I was partially wrong before- if you agree to a buyout amount less than the value of the contract, then the value of the buyout amount counts towards the cap. But there's no way Marbury or anybody on the team will take a lesser buyout amount. Either way, the buyout counts for the length of the contract- it amortized over that term:
How do buy-outs affect a team's salary cap? The agreed-upon buy-out amount (see question number 59) is included in the team salary instead of the salary called for in the contract. If the player had more than one season left on his contract, then the buy-out money is distributed among those seasons in proportion to the original salary. For example, say a player had three seasons remaining on his contract, with salaries of $10 million, $11 million and $12 million. The player and team agree to a buyout of $15 million. The $15 million is therefore charged to the team salary over the three seasons. Since the original contract had $33 million left to be paid, and $10 million is 30.3% of $33 million, 30.3% of the $15 million buyout, or $4.545 million, is included in the team salary in the first season following the buyout. Likewise, 33.33% of $15 million, or $5 million, is included in the team salary in the second season, and 36.36% of $15 million, or $5.455 million, is included in the team salary in the third season.http://www.realgm.com/src_gm_resources.php |