Salary Central

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New Orleans Pelicans Salary

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What is the Amnesty Provision and can we use it?

The amnesty provision in the 2011 CBA allows a team to wipe any contract off their books as long as the contract was on their books prior to the CBA being ratified. It can be used one time per team. But no need to concern yourself too much with it because the Pelicans will NEVER be able to use the amnesty. They do not have any players on their roster who were under their current contract with them prior to the CBA being signed. And no, they can not trade for another player and then amnesty them. They had to be on your team prior to the CBA being signed in November of 2011. Likewise, any player dealt from the Pelicans to another team is ineligible for the amnesty.

See Q67 at the NBA CBA FAQ for more detail.

What is the difference between the salary cap and the luxury tax?

The salary cap is a limit on the amount a team can spend on player contracts. The cap is a soft one, however, and there are numerous ways that a team can exceed this limit. They can go over the cap to sign their own players or go over it with any number of exceptions offered by the league. The luxury tax is another cap of sorts, as a penalty is paid for every dollar that you go over that threshold. Beginning in the 2013-14 season, the penalties for going over the luxury tax become far more punitive, so for most teams outside of the top two or three markets, it figures to become a nearly-hard cap. Additionally, if a team is over the cap, they lose some flexibility in making transactions, and even more when well over the tax line above and beyond the financial restrictions.

In the upcoming season, the salary cap is projected to be around $58.5 million while the luxury tax should be around $71.6 million.

See Q1 at the NBA CBA FAQ for more detail on the salary cap and Q21 at the NBA CBA FAQ for more detail on the luxury tax.

What are the different exceptions and which can the Pelicans use this summer?

There are 6 major Exceptions:

  • Mid-Level: All teams have exactly one of three Mid-Level Exceptions available to them each off-season.
    • Room: This is for a team that had cap room to use, allowing them to go just a bit above the cap, if necessary. This will likely be the Mid-Level the Pelicans will have available this summer. a contract of up to 2 years worth $5.27 million.
    • Non-Taxpayer: This is for teams that never drop below the cap in the offseason but remain outside of the Luxury Tax.
    • Taxpayer: This is for teams that will pay the Luxury Tax.
  • Bi-Annual: The Pelicans will likely not have this available since they should be below the Cap.
  • Rookie Salary: This is used to sign draft picks if a team is over the cap. The Pelicans will have it available but will likely not need to use it.
  • Minimum Salary: This is always available to teams. It is used to sign players to the minimum salary to which they are entitled. This was used to sign Roger Mason, Jr. in the 2012 offseason.
  • Traded Player: This is always available to teams. It is used to govern trades when a team will end up over the salary cap following the trade. It was used to acquire Robin Lopez and Hakim Warrick in the 2012 offseason.
  • Bird: This is available to all teams who have a player that is become a free agent after being not being a free agent for 3 years. This Exception allows that player’s team to sign him no matter the team’s salary situation. The Pelicans can use this to sign Aminu and Henry, if necessary. It can be used in sign-and-trade transactions.

See Q25 at the NBA CBA FAQ for more detail.

What are cap holds and how do they apply?

When a player becomes a free agent, they still count against the team’s cap in the form of a “cap hold” until the team re-signs them or renounces their Bird Rights. The cap hold can range anywhere from 120-250% of the previous years’ salary depending on a wide range of factors. Empty roster spots also count against the cap as well. If a team does not have 12 players signed, they will have an “Incomplete roster charge” of about$0.49 million for each spot to bring the number of charges to 12. So, let’s say the Pelicans have eight players making $38 million and have renounced all their other free agents. Let’s also imagine the cap is $60 million. They would not be $22 million under the cap. They would be just a tad over $20 million under the cap because of those empty roster cap holds.

See Q14 at the NBA CBA FAQ for more detail.

When two teams trade, how close do incoming salaries have to be to outgoing salaries?

If a team is far enough under the cap, they can take on as much extra salary as cap room that they have. For instance, if the Pelicans are $15 million under the cap, they can trade a $5 million contract and get up to $20 million in return. Trades get more complicated when both teams are at or over the salary cap. When both teams are near or over the salary cap (but under the lux tax) then a team can acquire up to $5 million dollars more in a trade than they send out. So if the Pelicans wanted to ship out Eric Gordon, for instance, and the team didn’t have enough cap room to absorb his deal, they would have to send at least $9.3 million in salary back for the trade to be legal.

If a team is over the luxury tax line, the rules are a little different. The maximum they can take back in salary is 125% plus $100,000 of what they send out in a trade. So, if the Pelicans were to send Eric Gordon out to a team over the luxury tax, they would have to take back at least $11.4 million in salary.

See Q82 at the NBA CBA FAQ and Q83 at the NBA CBA FAQ for more detail.

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