![]() ![]() ![]() Houston, with boatloads of cap room, only needs to fit the average of the total deal, or around $8.1 million, under the cap each year. They submitted a three-year, $24.3 million offer, paying around $5 million in the first two years before ballooning to almost $15 million in year three. The Houston Rockets took full advantage of this recently with their offer sheet to Chicago Bulls center Omer Asik. This structure allows a team with a plethora of cap room to back-load an offer sheet significantly in the third and fourth year, only needing to fit the average of all four years (or three years, depending on length of the offer sheet) under the cap in the first season of the deal. The difference in the application of the salaries for each team is where the loophole lies. Golden State therefore would have at least had the option to match this offer sheet for Arenas, if they chose to do so. To put this in context of 2003, the Wizards would only have been able to offer the full mid-level exception in the first two seasons, which at the time was $4.917 million. But if the original team decides to match the offer sheet, the annual salary is applied to the original team exactly as it is laid out in the standing offer sheet. However, if a raise from year two to year three is greater than 4.5-percent, the team proposing the offer sheet must be able to fit the average of the entire contract under the cap, rather than the first-year salary, and that is how it is applied to their ledger. The third year of the offer sheet has no such restrictions and could be as high as the player’s maximum, given the offering team’s cap room. …This loophole was seemingly closed in the 2005 CBA with the “Gilbert Arenas Provision,” where it was ruled that an offer sheet made to a restricted free agent in his first or second year in the NBA could not contain a first-year salary greater than the non-taxpayer mid-level exception ($5 million for 2012-13) and a second-year salary no greater than the standard 4.5-percent raise from the first year. And they are players that are restricted free agents either their first or second years in the NBA.Ībramson's article offers this excellent snippet: I didn't realize that the back-loaded deals being handed out to Asik, Landry Fields, and Jeremy Lin were only able to be offered because those players were either second-round picks or guys (Lin) not drafted at all. Well, Andrew Abramson from Truth About It breaks down these deals in fantastic detail in his piece: The Gilbert Arenas Provision and Why It's (Sometimes) Better To Be a Second Round Pick. Last night, while talking with Jeff Morton at the CSG studios, we attempted to figure out these "poison pill" contracts that NBA general managers are handing out like hotcakes. ![]()
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