Long-term pacts dodge salary cap

October 31, 1994|By Jon Morgan | Jon Morgan,Sun Staff Writer

Chris Webber's rookie contract with the Golden State Warriors would seem to have had everything a player could want: $74.4 million in guaranteed annual payments stretching over 15 years, whether or not he played.

But after a year, Webber tore it up.

Is he crazy?

Probably not. When the Rookie of the Year exercised an option to cancel his contract, he was carrying out a predictable strategy born of pro basketball's convoluted economic structure.

"In some instances, these contracts are one-way streets running back to the player. But a lot of these players are franchise players," said Martin Greenberg, director of the National Sports Law Institute at Marquette University.

High-powered rookies such as Webber routinely are garnering long-term, high-paying contracts. But the deals have to meet the rules of the NBA's salary cap, which limits total team payrolls and restricts annual raises to 30 percent of the first year's pay.

To work around these obstacles, teams and players have developed complicated schemes. Giving a contract a long term, perhaps longer than the player is likely to be in the sport, allows a team to stay under the cap with low first-year pay, stick with the 30 percent rule, and still attract top talent with $75 million.

"There are a lot of nuances and subtleties to this," said Bill Sweek, an agent with ProServ.

Webber's deal, for example, started at $1.6 million and would have crept up. However, the "op out," or escape clause, which Webber triggered in June, allowed him to declare himself a restricted free agent.

Under the NBA collective bargaining agreement, a team re-signing a free agent does not have to count his pay against the salary cap.

So Webber can try to negotiate the same or more money over a shorter period. He can accept offers from other teams, but the Warriors have the right to match it and keep him.

The NBA's cap presents other oddities. For example, if a player ** has a season-ending injury, his team gets credit under the cap for half of that year's pay to the injured player. So if a $1 million player goes down, the team gets $500,000 more under the cap to hire a replacement.

However, there are rules against bundling that money with, say, money saved from a retiring or traded player to pay a single athlete. The $500,000 then turns into a "slot" that agents seek to exploit for their clients.

"It's tough sometimes with the cap to, A, find the right numbers and, B, find the slot," said Tony Dutt, a senior vice president of ProServ.

This is all an oddity of the NBA.

Although baseball owners are seeking a salary cap, the rules currently provide for free agency after six seasons and no cap, giving veteran superstars the leverage to get more money up front.

The Orioles' Cal Ripken, for example, received a five-year deal worth $32.5 million, including a job after his playing days. The average of a little more than $6 million a year is more than Webber's annual average of $4.9 million, but the total value of the young basketball player's pact is more than twice that of the baseball superstar.

The NFL's contract provides for a "hard cap," which basketball owners also are seeking in talks under way with the NBA Players Association (they also are seeking a rookie cap to end the spiral of rookie pay). Under a hard cap, teams cannot exempt players, such as Webber, even if they are re-signing them.

NFL free agency kicks in after five years, at which time players' contracts tend to balloon.

The NHL does not have a cap, but owners are seeking one in talks that have delayed the start of the season.

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