The Butterfly Effects, Pt. III: No Rush

Posted by Rob Mahoney on November 30, 2011 under Commentary | Read the First Comment

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With the unofficial, metaphorical ink on the tentative CBA structure beginning to dry, we’ll take to look at how the new agreement impacts the Dallas Mavericks teams of today and tomorrow.

The new collective bargaining agreement is like catnip to NBA fans, who appreciate the return of the league as a general rule, and also have an unquenchable thirst for rumored roster moves. Few things generate excitement on par with a prominent player switching teams, and the amnesty clause included in the new agreement theoretically allows for all kinds of movement involving all kinds of interesting players.

At this point, the clause itself likely needs no introduction. But for those unfamiliar, here is the provision in question, written out in this detailed memo (via in plain English:

Each team [is] permitted to waive 1 player prior to any season of the CBA (only for contracts in place at the inception of the CBA) and have 100% of the player’s salary removed from team salary for Cap and Tax purposes.

The rumors that dance through all of our heads are two-fold: not only are there intriguing decisions regarding whether teams should cut players using the amnesty clause at all, but also the possibilities governing which released players end up signing with which teams. Dallas is not a likely landing spot for any of the top amnestied players, for the sole reason that the team lacks the cap space to participate in one of the quirkier elements of the amnesty rule itself:

A modified waiver process will be utilized for players waived pursuant to the Amnesty rule, under which teams with Room under the Cap can submit competing offers to assume some but not all of the player’s remaining contract. If a player’s contract is claimed in this manner, the remaining portion of the player’s salary will continue to be paid by the team that waived him.

Yet the amnesty decision itself still remains in Dallas’ back pocket, just as it does for every team in the league. NBA owners and general managers have been given an incredible gift out of collective bargaining; the power to functionally undo the cap implications of any one contract is considerable indeed, and could reshape the futures of several teams.

Dallas, for a variety of reasons, is not one of those teams. The Mavericks don’t have any one crippling contract that currently derails them in their efforts to improve or maintain, effectively squelching any sense of urgency to cut a player loose. The only two sensible candidates would be Brendan Haywood and Shawn Marion, but both are currently too essential to release, and neither move would do much aside from shed salary. If the re-signing Tyson Chandler is certain, then there is some logic in a move to release Haywood in order to ease the luxury tax burden on Mark Cuban. However, with the two-year buffer before the more problematic luxury tax penalties take effect, Dallas has been gifted the ability to wait and see.

The changes to the luxury tax rules are of great immediate significance to the Mavs, as Cuban and Donnie Nelson will have to change the way the team’s roster and payroll are managed. Gone are the days when Cuban could spend his way out of the team’s mistakes; beginning with the 2013-2014 season, taxpaying teams will face a far more substantial penalty than in years past, and Cuban will make considerable efforts to minimize the financial hit he takes as a result.

In the interim, however, the NBA will have the same dollar-for-dollar luxury tax penalty that it saw under the last collective bargaining agreement. That makes the prospect of re-signing Chandler a bit easier to swallow, as Dallas’ short-term financial bottom line would look very similar to what its been over the last few seasons. The Mavericks would still be taxpayers, but the punishment for crossing that threshold wouldn’t be quite so severe. As a result, cutting Haywood before Christmas would be inconsistent with what we know of Cuban and the way the Mavericks operate. So long as the rules remain the same, Cuban should theoretically be willing to pay (more or less) the same rate for the same core that brought his franchise a championship.

That said, there is a real possibility that it will make far more sense to release Haywood two years down the line, just before the new tax penalties take effect. The Mavs could be a very different team by then, and it’s possible that retaining Haywood as a back-up center won’t be worth the considerable tax penalties Cuban would need to absorb as a trade-off. Jason Kidd may be retired. Jason Terry may no longer be in Dallas. Dirk Nowitzki will be in the final year of his contract, and may not be able to maintain the elite production necessary to anchor a team. Dallas could then wipe away the three years and over $29 million (Note: the final year of Haywood’s contract, which is included in this value, is unguaranteed) remaining on Haywood’s deal in order to duck tax payments or clear cap space, and save Mark Cuban a sizable chunk of change in the process.

For customarily high-spending teams like Dallas, the wait-and-see amnesty approach appears to be the most sensible; Cuban and Nelson will make concerted efforts to curb payroll over the next two years, and if that method comes up short, they’ll still have the ability to discard one substantial contract. That gives Dallas the roster stability necessary to return its championship core without derailing the team’s long-term financial goals — an effective marriage of the franchise’s two biggest goals.

Other topics of interest for the Mavericks in the new collective bargaining agreement: the luxury tax, and salary cap exceptions.

  • Dr. Clarkus

    Great series Rob.  Who do you think the Mavs end up with this offseason?  Think they can bring back TC, JJ, and Caron?