NBA Amnesty Clause Revisited

With the outline of the new NBA Collective Bargaining Agreement agreed to here's another look at which teams should amnesty which players. The new amnesty rules are:

• Each team can waive one player currently on the team and under contract prior to any season. It can be used only one time but can be used in any of the next six years of the CBA. The player must have been on that team's roster when the CBA was agreed to (ie you cannot trade for a player and then amnesty him or sign a new player and then amnesty him in a few years).
• The amnesty'd player's entire salary does not count against the Luxury Tax or the Salary Cap. The team still must pay the player's entire salary.

In my next post I will get into which teams should cut which players and which teams should save their amnesty option for a later date. This post will discuss why teams would want to amnesty a player. Reasons to amnesty a player:

1.) Clear up Salary Cap space: Using the amnesty clause can clear up Salary Cap space, allowing the team to offer more money to free agents or to save some money. However there is a Salary Cap minimum of $49.3 million in the first two years of the deal. Teams must spend that minimum in salaries. If a team uses the amnesty on a player to get below that mark they will not be saving any money.

2.) Get under the Salary Cap: A team under the Salary Cap is able to submit a claim on amnesty'd players that other teams cut using the amnesty provision. A player cut with the amnesty clause does not become a free agent. Teams under the cap may submit an offer to pay any portion of that player's contract. The team that bids the highest gets the player. Teams under the cap can also use something caused the 'Mid-Level Exception for Room Teams' but that is not really worth much.

3.) Get under the Luxury Tax line: Getting under the Luxury Tax line saves a team money. In the first two years of the deal, teams pay $1 for every $1 the team is over the Luxury Tax line. In future years of the deal, the team can pay more than $3 for every $1 the team is over the tax line and that penalty becomes even more onerous if a team pays the tax 4 out of 5 years.

Teams under the Luxury Tax line can also offer a better Mid-Level Exception to lure in free agents. Non-tax paying teams can offer $20.45 million over 4 years while tax paying teams can only offer $9.25 million over 3 years. Non-tax paying teams can also offer the Bi-Annual Exception every other year ($3.9 million over 2 years). Non-taxpayers also get a 150% Traded Player Exception while tax paying teams only get a 125% exception. Teams under the Luxury Tax line may also receive preferential distribution of that tax ("Tax the rich and give to the slightly less rich!"), but that is still undecided.

There is some language in the CBA summary about certain teams not being more than $4 million above the Tax level that may benefit tax paying teams more than non-tax paying teams but that is unclear at this time.

4.) Save Money: Not only savings from not paying the Luxury Tax, but if another team claims the player that was amnesty'd that team has to pay whatever portion of the contract they agreed to.