What is the limit per year you would go for Smith?

[Diesel]

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Well, once Phoenix agreed to trade, there was no more reason to frontload.

Really? I guess you didn't read the article you just posted.

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The reason is that they are not taking a pay cut because they are going to make the same amount of money, only they will get paid much more of it at the beginning of the contract.

Any person in business or economics will tell you that is a winning proposition

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Uhm Gord,

This is talking about the reason a Player would take a frontloaded contract. Did you read?

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The player clearly wins.

Deng can take that extra money he gets early in the contract, invest it, and the total amount he will make from the deal after five years will be much more than in the standard deal.

Still more about the player taking the frontload...

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frontloading long-term contracts makes it much easier to move players later in their contracts. Their salaries are simply much lower which makes them easier to trade.

Yeah, teams can move players later.. It's a great argument, but everybody and their sister knows that WE Threatened to Frontload JJ for one reason. He was a RFA and Phoenix had the right to match. We wanted to make their matching as painful as possible.

Is that really all you got Ex?

It's a recurring theme with you. You're wrong so you want to pick and pry at something insignificant and irrelevant.

From now on, I say you use this as your avatar...

[exodus]

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Ex is talking about Philly frontloading a contract to go after Smoove because they only have 11 million.

However, he missed the part where they would have to make a trade to free up capspace to offer a frontloaded deal.

You are definitely creative.

They don't need to clear space to offer a frontloaded deal. Clearing space would allow them to offer a larger deal overall. If they clear just $2 million more they could offer a deal bigger than the one we gave JJ.

[exodus]

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WE Threatened to Frontload JJ for one reason

First of all we didn't THREATEN to frontload we actually DID frontload.

Secondly it takes two parties to agree to a contract. Frontloading the deal not only made it tougher for the Suns to match it also made the deal MORE ATTRACTIVE TO JJ.

One party can't just unilaterally decide to change a contract without the consent of the other party after it has been agreed to.

[Diesel]

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Ex is talking about Philly frontloading a contract to go after Smoove because they only have 11 million.

However, he missed the part where they would have to make a trade to free up capspace to offer a frontloaded deal.

You are definitely creative.

They don't need to clear space to offer a frontloaded deal. Clearing space would allow them to offer a larger deal overall. If they clear just $2 million more they could offer a deal bigger than the one we gave JJ.

The need space to offer more than 11 Million to start.

[AHF]

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We can say JJ to a 70 Million dollar deal, therefore, we want to frontload the deal and not have the frontloaded value count against the cap. If we paid 20 million to JJ, we had to have 20 million in capspace.

If by frontload, you are talking about paying out a signing bonus then it is not the amount paid to the player in the first year that determines the cap hit - it is the base salary for the first year plus the pro-rated portion of the bonus (spread out over the guaranteed years of the contract). Per Larry Coon's essential FAQ:

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How about signing bonuses? Are they allowed? How do they count against the cap?

Teams are allowed to offer the players they sign a bonus worth as much as 20% of the total compensation (17.5% in offer sheets to restricted free agents signed after March 1, 2006). If a player has a signing bonus, then that bonus is spread among the guaranteed seasons in the contract (not option years or years following an ETO), in proportion to the percentage of salary in each of those seasons that is guaranteed*. This can create a problem if the player is signed with an exception or to the maximum salary. For instance, if the Mid-Level exception is $5 million, then a team could sign a player to a five-year contract with 8% raises (but without a signing bonus), as follows:

Year

Salary

1

$5,000,000

2

$5,400,000

3

$5,800,000

4

$6,200,000

5

$6,600,000

Total

$29,000,000

The maximum (20%) signing bonus is $5,800,000. It must be allocated to each season of the contract (assume there is no option year or ETO). In order to fit the first-year salary plus the portion of the signing bonus allocated to the first season within the $5 million exception, the first-year salary must be reduced:

Year

Base salary

Portion of signing bonus

Total

1

$3,840,000

$1,160,000

$5,000,000

2

$4,240,000

$1,160,000 $5,400,000

3

$4,640,000

$1,160,000 $5,800,000

4

$5,040,000

$1,160,000 $6,200,000

5

$5,440,000

$1,160,000 $6,600,000

Total

$23,180,000

$5,800,000

$29,000,000

Note that in order to fit the first-year amount (salary plus bonus) within the $5 million exception, the first year salary had to be reduced to $3,840,000. The net effect is that the player gets more money in the first year (he receives his base pay of $3,840,000 plus his entire signing bonus of $5,800,000, for a total of $9,640,000), but receives less in the subsequent years. However, the contract counts against the salary cap the same as if it did not contain a signing bonus.

The following are also treated like signing bonuses for the purpose of determining a player's salary:

Payments in excess of $500,000 that are made to non-NBA teams or federations to release rights to a player.

Option buy-out amounts (see question number 59).

Trade bonuses (see question number 83).

* The calculation for allocating the signing bonus to the years of the contract is somewhat confusing. It is not proportionate to the salary, but rather to how much of the salary is guaranteed. If there are five years in the contract, there is no option year or ETO, and each year of the contract is 100% guaranteed, then 20% of the signing bonus is allocated equally to each season of the contract, even though (as in the example above), the salary increases throughout the contract. Using the above example, if the fifth year of the contract was only 50% guaranteed, then $1,288,889 of the bonus would be applied to each of the first four seasons, and $644,444 would be applied to the fifth season.

[exodus]

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However, the contract counts against the salary cap the same as if it did not contain a signing bonus.

Do you really think Larry Coon is reliable though? Personally i think RealGM posters, ... uh...i mean columnists, are much more reliable.

(Oh wait Diesels article never mentioned signing bonuses.)

never mind

[Guest]

No D you are wrong. Take the starting salary of $11 million, and let's allow for 8% raises and a 5 year deal. That is a contract that looks like this:

$11

$11.88

$12.76

$13.64

$14.52 mil

Total: $63.8 million

You can frontload that contract with a signing bonus. The caphits will look identical to what is shown above however what will be paid looks like this:

Signing bonus (17.5% of $63.8 mil) = $11.165 mil (paid upfront)

1st year = $8.767

2nd year = $9.647

3rd year = $10.527

4th year = $11.407

5th year = $12.287 mil

Total = $63.8 million

So the contract pays $19.932 million the first year. The cap hit the first year will only be $11 million because the signing bonus is spread throughout the life of the contract. That is the kind of deal we can expect from Philly as of right now (assuming they have $11 million). It is the same concept from our offer to JJ.

[Diesel]

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No D you are wrong. Take the starting salary of $11 million, and let's allow for 8% raises and a 5 year deal. That is a contract that looks like this:

$11

$11.88

$12.76

$13.64

$14.52 mil

Total: $63.8 million

You can frontload that contract with a signing bonus. The caphits will look identical to what is shown above however what will be paid looks like this:

Signing bonus (17.5% of $63.8 mil) = $11.165 mil (paid upfront)

1st year = $8.767

2nd year = $9.647

3rd year = $10.527

4th year = $11.407

5th year = $12.287 mil

Total = $63.8 million

So the contract pays $19.932 million the first year. The cap hit the first year will only be $11 million because the signing bonus is spread throughout the life of the contract. That is the kind of deal we can expect from Philly as of right now (assuming they have $11 million). It is the same concept from our offer to JJ.

So in a case like this.

If we wanted to trade Smoove 3rd yr.

What happens? Do we trade him with the caphit value or the cash value?

It leads to an unevenness. 12.76 Million vs. 10.52 Million.

For us he's holding a caphit of 12.76 million. We trade him to another team for that and he makes more money. We trade him for 10.52 Million, we lose money in the cap.

[Guest]

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What happens? Do we trade him with the caphit value or the cash value?

Caphit. It actually would make his deal more enticing to trade for because you actually pay less than what he counts against your cap.

[Diesel]

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What happens? Do we trade him with the caphit value or the cash value?

Caphit. It actually would make his deal more enticing to trade for because you actually pay less than what he counts against your cap.

That's crazy.

You say we pay him upfront.

Then if we trade him, another team pays him what he's supposed to get had we not paid him upfront?

Don't you see the problem here??

I'm surprised that every player that's signed a signing bonus doesn't sit out until their traded after their first year.

[Guest]

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Then if we trade him, another team pays him what he's supposed to get had we not paid him upfront?

No, they pay his base salary, which will actually be less than the caphit. I think you are confusing Caphit and salary here. For salary cap purposes, he would have a second year value of $11.88 million however whichever team he plays on only pays him his base salary (scroll up to my earlier post to see how much that is, I don't have it handy right now). So there is not some sort of a loophole where a player gets traded and then gets more money than the value of his contract.