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Bonn1997
Posts: 58654 Alba Posts: 2 Joined: 2/2/2004 Member: #581 USA |
There's a rumor that the earth is flat too
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VDesai
Posts: 43301 Alba Posts: 44 Joined: 10/28/2003 Member: #477 USA |
Just for clarification:
60. 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. The distribution of the buy-out money is a matter of individual negotiation. Changing the number of years in which the money is paid does not change the number of years in which the team's team salary is charged. In the above example in which the player's contract is bought out with three seasons remaining, the buyout amount is always charged to the team salary over three seasons. It does not matter if the player is actually paid in a lump sum or over 20 years (a spread provision). http://members.cox.net/lmcoon/salarycap.htm Which means if Zach gets bought out for 50% of his contract, then only 50% of his contract will count against the cap for the seasons remaining. Which is a SIGNIFICANT amount of cap savings if the Knicks were able to pull something like this off. |