Salary Rules

[sapp2013]

Signing Bonus:
The signing bonus should be limited. The NBA has a 15% rule for signing bonus which means that the extra money that is being spent in year one cannot be greater than 15% of the whole contract, including the signing bonus. lets take Josh Garden's contract for example.

$23m + $5m + $5m = $33m || $23m - $5m = $18m || $18m / $33m = 54.5%

by this logic, Garden's contract would not work as his signing bonus is much too large. If he wanted to still receive the same amount over 3 years, it would need to be broken down differently.

15% of $33m = $4.95m || ($33m - $4.95m) / 3 = $9.35m || $14.3m + $9.35m + $9.35m = $33m

along with signing bonuses, In the NBA and NFL, even though they are paid out to the players right away, they still count against the salary cap broken down each year, so for Garden's contract, $11m would go against the salary cap each year, rather than the aforementioned payments.

---

along with this, In the NBA you are allowed to either backload or frontload your contract, but only to a certain degree. Frontloading is when you put most of the contract money in the first few years. that can only be adjusted by 5%. Backloading is putting most of the money at the later years of a contact and that can be done at 5% - 8% each year. no, these are not compounded. for a 3 year contract, it would look something like this:

Front Load(5%): $10m + $9.5m + $9m = $28.5m
Back load(5%): $10m + $10.5m + $11m = $31.5m
Back load(8%): $10m + $10.8m + $11.6m = $32.4m

The backload at 8% was for Bird rights only, but it does not look like we will get into that. obviously, percentages can change, but just something to look at. This could work with or without the signing bonus, but itll help to keep teams from overloading on 1 year and having so much cap the next year.

Minimum Salary Cap Used:

The NFL and NBA have rules on the minimum that teams can spend each year. Each team must reach 90% of their cap space each year to be in compliance. This is to make sure that players are getting paid as well as teams either trying to intentionally tank or loading up on cheap FA have to spend more than they initially thought. Many people see this as an irrelevant rule, but it could boost salaries since teams are not 100% guaranteed to land a certain Free Agent and may not meet the salary floor. I was just reading through the NBA CBA and thought this was interesting so I thought i would throw this in there.

---

Let me know what all of you think of these rules. Might have some more coming up that I will edit this.

[White Cornerback]

bump for discussion

[timeconsumer]

Meh

[kckolbe]

I guess I don't see it as a signing bonus, just aggressive structuring. The NFL has some very imbalanced contract structures, and to the best of my knowledge there is no rule against it.

[ADwyer87]