How buyouts affect the trade deadline and the postseason
Three L.A. Lakers players were profiled on this site in the build-up to the trade deadline as being possible candidates to be moved - Steve Blake, Jordan Hill and Chris Kaman.
Of the three, only Blake was moved, in a highly complicated deal with Golden State that saw the Lakers save on some luxury tax money and pick up some possibly projectable backup two-guards, for the cost only of this surplus-to-requirements veteran point guard and the approval of Kobe Bryant. Hill and Kaman remained with the Lakers, despite their expiring salaries, despite the redundancy of the Lakers' season, and in Kaman's case, despite being on the back side of his career.
It is perhaps most odd of all that Hill remained. The most palpable rumor for him, one which would have seen him traded to the Brooklyn Nets, seemingly broke down to Brooklyn's desire to be recompensed via a pick for taking on the $17 million cost that a three month rental of Hill would have demanded of them, despite it only saving the Lakers a fraction of that amount. Yet surely there could have been other deals made for Hill.
The Atlanta Hawks, for example, just waived little-used guard Jared Cunningham. They have a modicum of cap space remaining, and sorely need some big man help in light of Al Horford's injury. A Hill for Cunningham and a second-round pick trade would have given Atlanta an extra quality big for the most expendable of pieces, and given the Lakers at least one returning pick for a player they might lose. The rights to Mike Muscala may also have sufficed. Seemingly, though, the Lakers found no deal better than keeping the right to possibly re-sign Hill at the end of the year, not even those like the Brooklyn deal offering the Lakers significant luxury tax exoneration.
It is easier to see why Kaman stayed. There were talks, yet as good (and underrated) of a player as he is, Kaman nevertheless stayed with the team, as no one was willing to pay a price for his rental for the final 30 games of the regular season. At $3.183 million, and no longer able to play the big minutes he once did, no team was willing to meet Kaman's price.
Or at least, they were not willing to pay that price, knowing full well a lower one could soon become available. Not being traded makes Kaman a logical candidate for that other great vehicle of midseason roster turnover, the late February buyout market.`
When players are bought out, what they are actually doing is simultaneously renegotiating how much guaranteed salary they are owed, and being waived. In a buyout, a player and a team agree on an amount that the player will continue to be paid after clearing waivers - often times, especially in in-season buyouts, it is zero - and then terminate the contract, whereby they enter the waiver process.
The impact that player has on a team's payroll, cap number and luxury tax calculation all changes accordingly. The player is not eradicated from the cap - buyouts involve only outstanding salary, and the time they have served is charged to the cap. For example, if a player agrees to forgo the remainder of his current season salary on the 120th day of a 170 day season, 120/170ths of the player's salary is charged to the cap (and of course, it was already paid to him). Of the remainder, only the amount agreed to be paid after the buyout continues to be charged to the cap, spread proportionally amongst the guaranteed remaining seasons.
Buyouts more often than not take place in the final season of a player's contract, and when conducted during the season, often involve forgoing any remaining salary obligations. (It is very rare for a guaranteed salary to be bought out for $0 before the season begins. However, Derek Fisher's buyout with the Jazz was one such example.) It behooves the team to do so, as they are owed no future money to the player, and get to reduce the repercussions of that cap hit. And for this reason, it is often the players recently received in deadline trades, or who were unable to be dealt in them, that go through this process.
The candidates are mostly already known. Glen Davis - an anomaly in the sense that his contract was not expiring this summer - has already left Orlando and joined the L.A. Clippers. Danny Granger seems inevitable, and Ben Gordon will not be far behind him. The Knicks are said to be buying out unused veterans Metta World Peace and Beno Udrih after being unable to trade them, while Atlanta and Sacramento already waived their deadline day acquisitions, Antawn Jamison and Roger Mason Jr. Also waived, although not reported to have given up salary, include Houston's Ronnie Brewer and Philadelphia's Earl Clark. Detroit's Charlie Villanueva and Milwaukee's Caron Butler have been speculatively mentioned as possible, while logical candidates for buyouts include Boston's Kris Humphries and Utah's trio of Brandon Rush, Andris Biedrins and Richard Jefferson. There may be others.
This business will all be taken care of in the near future, due to another deadline. Any player on an NBA roster by the close of business on March 1st is only eligible to play in the playoffs for that team. Therefore, any buyouts of veterans that take place after the deadline almost always take place before that date, so that the players concerned are still eligible for postseason ball wherever they next end up. (This is often misinterpreted as a sign-by date, which it is not. There is no date by which they must be signed in order to be eligible, other than the final day of the regular season, April 16th.)
The post-deadline buyout vehicle is not a new phenomenon, but an increasingly prevalent one. And it can be tough to reconcile. Contending teams with open roster spots can sign players others have to trade for, purely by being competitive. It questions the very idea of parity the NBA seeks to promote.
It is, however, better than it was. The particularly unsavory circumstance by which a team could trade a player, have him waived by the recipient team and then immediately re-sign him, as infamously evidenced by the Cleveland Cavaliers and Zydrunas Ilgauskas , is no longer a threat - once a team trades away a player, they are not allowed to re-sign him as a free agent until either one year after the date of the trade, or until the contract they traded away has expired, whichever comes first. Indiana cannot re-sign Granger then, and nor can Orlando sign Glen Davis until the summer of 2015.
Nevertheless, the practice exists and can be invaluable. Veterans bought out and acquirable in this manner can often be anticipated, strategized for accordingly, and can affect the balance of a season just as a deadline day trade can.
In addition to this, the Chinese Basketball Association, where many NBA caliber players play, has its season end at this time of year. This is certainly no coincidence - the Chinese authorities are aware that their league can sign NBA caliber players, and that NBA caliber players have added incentive to sign there if they know they can also play in the NBA that season. This frees up NBA-caliber players for NBA teams right at a time when playoff pushes need to be made. Whichever team lands Ivan Johnson will demonstrate why this is important.
In the light of a supposedly underwhelming trade deadline, a lot of commentators are blaming the inhibitions of the new Collective Bargaining Agreement on the lack of significant movement that transpired. Perhaps, these other two factors play more of a role than is thought. When decent reinforcements are available on the free agent wire, why trade for a rental player?