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The NBA CBA, Amnesty Rule and the League’s Worst Contracts

The NBA’s latest CBA proposal reportedly includes an “amnesty clause” – a one-time opportunity for teams to remove their worst contracts from the books.

NBA teams have had this opportunity once before. In 2005, teams were given the chance to waive a single player contract. Teams were still bound to pay the players’ salary, and the salaries continued to count against the cap, but teams were freed from

any obligation to pay luxury tax on those salaries.

That rule came to be known as the “Allan Houston Rule” – based on the general assumption that New York would jump at the opportunity to waive their oft-injured, high-priced guard. (In an ironic twist, Houston was not waived under the rule that bears his name – the Knicks gambled that Houston’s injuries would prove to be career-ending, and that they’d get cap – and insurance – relief as a result. That turned out to be the team’s savviest personnel move of the decade.)

The provision in the owners’ CBA proposal may be similar, though it seems reasonable to assume that this amnesty clause would remove contracts from the salary cap number as well, especially if accompanied by a substantial reduction in the cap number or the elimination of cap “exceptions.”

That’s interesting for a couple of reasons. A big wave of amnesty-clause free agents would make the 2011 free-agent class a lot deeper — and if we assume that the waived players would still

collect money owed under their existing contracts, those new free agents might be willing to work for very little. It would also give teams that are struggling under the weight of some bad decisions to add some talent over the summer.

Which players would be impacted? A quick look at each team’s payroll offers quite a few clues. (All salary figures are from the invaluable team payroll listings at HoopsHype.com.

The NBA’s Worst Contracts: 2011-on

Atlanta:Joe Johnson’s mammoth contract (which will pay him nearly $25 million in 2015-16) is generally regarded as the league’s worst. But can the Hawks afford to part ways with their best player? Kirk Hinrich ($8 million in 2011-12) might be another candidate, given Jeff Teague’s emergence in the playoffs.

Boston: The Celtics still have Rasheed Wallace on the books for over $6.7 million in 2011-12. He’s the obvious choice.

Charlotte: Their draft-day trade with Milwaukee cleared Charlotte’s ugliest contract – Stephen Jackson’s – off the books. Corey Maggette is significantly overpaid, but at least his deal expires after the 2012-13 season.

Chicago: The Bulls are in excellent shape, payroll-wise; their core is locked up through 2012-13, and no player is making a really outrageous sum.

Cleveland: The Cavs would happily part ways with Antawn Jamison (owed over $15 million in 2011-12) or Baron Davis (owed nearly $29 million over the next two seasons).

Dallas: I suspect the Mavs would rather not have Brendan Haywood on the books for $42 million through the 2015-16 season, especially if it means losing their flexibility to re-sign Tyson Chandler and replace an aging Jason Kidd when the time comes.

Denver: The Nuggets only real contract extravagance is Al Harrington’s deal, which runs through the 2014-15 season at an average of over $7 million per year.

Detroit: Joe Dumars has been trying to part ways with Rip Hamilton for the better part of a year – this could be his chance.

Golden State: A lot depends on what sort of team the Warriors want to be. If they decide to get away from their offense-first philosophy, they could re-think their long-term commitment to David Lee. Andris Biedrins could lose playing time to 2010-11 rookie Ekpe Udoh, and ($9 million/year through 2013-14) would also make a lot of sense.

Houston: Unloading Brad Miller on draft night cleared the Rockets’ worst liability off the books. Hasheem Thabeet doesn’t give the team much, but he’s still on a rookie deal and could be gone after this season.

Indiana: Danny Granger is the only Pacer signed beyond next season (if you ignore a variety of player/team options). Indiana could clear a little space for 2011-12 by cutting ties with James Posey ($6.9 million) a year early.

LA Clippers: The Clippers are in excellent shape, cap-wise. But if they decide to go full-bore with their youth movement and hand starting jobs to Eric Bledsoe or DeAndre Jordan (a restricted free agent the team reportedly wants to re-sign), they could cut ties with Chris Kaman ($12.2 million) or Mo Williams ($8.5 million next season, a player option for the same number in 2012-13)

LA Lakers: If you’re

Laker GM Mitch Kupchak, do you cut Luke Walton – owed nearly $12 million over the next two season? Or do you cut Steve Blake – owned $12 million over the next three?

Memphis: The Grizzlies have an interesting dilemma on their hands – they gave Rudy Gay a massive contract, then reached the second round of the playoffs without him. It’d make far more sense to trade Gay – Philly’s Andre Iguodala is a rumored target – and no other Grizzly player is making enough money to represent a major cost savings.

Miami: The only Heat players signed long-term are LeBron, D-Wade, Chris Bosh, Mike Miller, Udonis Haslem and Joel Anthony. The emergence of James Jones could make Miller an unnecessary luxury.

Milwaukee: Drew Gooden’s contract – which pays over $6 million per season through 2014-15 – is a great argument against the mid-level exception. I suspect the Bucks would love to hit “undo” on that thing.

Minnesota: David Kahn might be the only person that thinks Darko Milicic is worth $15 million over the

next three seasons. Luke Ridnour’s $11 million over that same span could be expendable, especially now that T-Wolves have convinced Ricky Rubio to cross the Atlantic.

New Jersey: Take your pick of last summer’s awful free agent signings. Cut Travis Outlaw ($7 million/year through 2013-14)? Or Johan Petro ($3.2 million in 2011-12, $3.5 million in 2012-13)?

New Orleans: The Hornets’ biggest cost-savings opportunity would be to dump Emeka Okafor – set to make $14.5 million in 2013-14. They could also make taking on Okafor’s contract a requirement in any deal for Chris Paul, who may try to force his way out this season. The rest of the Hornets’ roster is on short-term deals.

New York: The only Knicks signed beyond next season are Carmelo Anthony, Amar’e Stoudemire and Renaldo Balkman… and Balkman makes just $1.6 million per year over the next two, so cutting him doesn’t help much.

Oklahoma City: Thunder GM Sam Presti has done an outstanding job of managing his payroll, he really doesn’t have any ugly contract commitments. He could opt to save some coin in the short term by cutting someone like Nate Robinson, who is in the final year of his deal and set to make $4.5 million.

Orlando: Gilbert Arenas, remarkably, still has $60 million remaining on his contract. Perhaps the easiest call of all.

Gilbert Arenas - Chris McGrath/Getty Images
Gilbert Arenas, remarkably, is still owed $60 million. 

Philadelphia: Elton Brand might have been a candidate before his comeback season. Him aside, the Sixers’ best move might be to cut ties with someone like Andres Nocioni ($6.65 million) a year before his deal expires.

Phoenix: Think the Suns would like a do-over on that Josh Childress contract? ($26 million through 2014-15)

Portland: The Blazers’ scariest long-term commitment is Brandon Roy, who is set to make near-max money through 2013-14 and whose knee problems are well-documented. Aside from Roy, the Blazers are committed long-term to LaMarcus Aldridge and Wes Matthews at very reasonable numbers, and have quite a few other deals set to expire next summer.

Sacramento: The Kings didn’t have any catastrophically-large deals on the books until draft day, when they moved down a couple of spots in the lottery for the privilege of taking on John Salmons and his hideous contract. Apparently they like the guy; do they like him enough to spend $24 million over the next three seasons?

San Antonio: I know Richard Jefferson re-signed at a lower number to save the Spurs some cap-space… but I still wouldn’t want to be on the hook to pay him $30 million over the next three seasons.

Toronto: Jose Calderon is injury-prone and set to make $19 million over the next two seasons. Jerryd Bayless might be a better option anyway, and he makes one-third as much.

Utah: The rebuilding Jazz don’t really have any long-term commitments, but might be eager to end the Raja Bell experiment and save about $6.5 million in cap space over the next two seasons.

Washington: Rashard Lewis certainly isn’t worth $45 million over the next two seasons. Getting him off the books could jump-start the Wizards’ rebuilding efforts.

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