Question on Salary Structures

[jays52]

I have a question for those far more knowledgeable than myself. IIRC, the maximum year to year salary appreciation is 30%? Is there anything in the CBA that places a floor or ceiling on year to year salary depreciation? The reason I ask is that if '10 is uncapped, it would be realistic to sign our big name retentions to a massive (say, 20 mil) first year, then a very cap friendly figure from then on out? My thought is that it takes advantage of the uncapped year, yet still affords insurance against the cap being placed again. Can anyone offer guidance on this?

 

[Miguel]

From the CBA:

Amounts Treated as Signing Bonuses. For purposes of determining Team Salary under the foregoing, the term “signing bonus” shall include:
(5) The difference between the Salary in the second contract year and the first contract year when Salary in the second contract year is less than half the Salary called for in the first year of such Contract;

 

[jays52]

From the CBA:

Amounts Treated as Signing Bonuses. For purposes of determining Team Salary under the foregoing, the term “signing bonus” shall include:
(5) The difference between the Salary in the second contract year and the first contract year when Salary in the second contract year is less than half the Salary called for in the first year of such Contract;

Thank you, Miguel. As always, you are a wealth of knowledge. So, correct me if I am wrong, but this is simply denoting what is referred to as a Signing Bonus. This is a definition of nomenclature and not an actual limit placed upon depreciation?

 

[pats1]

Thank you, Miguel. As always, you are a wealth of knowledge. So, correct me if I am wrong, but this is simply denoting what is referred to as a Signing Bonus. This is a definition of nomenclature and not an actual limit placed upon depreciation?

No, it is one of the definitions of signing bonuses, one that would change the circumstances you described.

 

[eom]

Thank you, Miguel. As always, you are a wealth of knowledge. So, correct me if I am wrong, but this is simply denoting what is referred to as a Signing Bonus. This is a definition of nomenclature and not an actual limit placed upon depreciation?

what you're suggesting would be, say, 21m first year (uncapped) salary and 1m second year salary.
this apparently would be treated as 1m first year salary + 20m signing bonus, which then gets amortized over the length of the contract for cap purposes.
let's say a 4 yr deal --- first 2 years count as 6m (20/4 + 1) against the cap.

if I've got all that right.....

I guess you could push some amount of money fwd into the uncapped year, but also remember this is all real money, and I doubt they want a 200m payroll one year.