A few people have asked me about the loophole in the minimum salary calculation that I described the other day. The main point of contention has been an article from Mark Deeks of ShamSports where he states that team payroll, not team salary, is used when determining whether a team has reached the salary floor.
“when calculating a team’s proximity to the minimum salary threshold, it is payroll that is used, not team salary. “
I want to get this out of the way: I think Mark Deeks is a tremendous writer, and I have a ton of respect for him. In terms of authorities (who comment publicly) on the salary cap, he is right up there with Larry Coon in terms of go-to resources.
That being said, I think that he is wrong in this instance.
First, I will refer to Larry Coon’s FAQ, which is just a treasure trove of information for us lay-people, as he does a great (and thorough) job of translating the legalize in the Collective Bargaining Agreement to human-consumable terminology.
In question #15 of his FAQ, Coon describes the condition for when a team is penalized for not reaching the salary cap floor as:
“Teams with a team salary below the minimum are surcharged for their shortfall, with the money distributed among the players on that team.”
Team salary there is the key word, as that is a term that has a strict definition.
Moving back to question #14 in his FAQ, which goes into what is included in team salary, we have:
“The full season salary of any players the team acquires in midseason trades.”
So, that seems pretty cut and dry: the league uses team salary when determining whether a team has reached the salary cap floor, and a players full season salary is included in that calculation, not how much a team actually pays that player.
Still, to be safe I like to go back and take a look at the actual Collective Bargaining Agreement when I can. The NBA and NBPA do a great job of making the CBA publicly available, if you have the time and patience to wade through the nearly-400 page document.
In the CBA (Article I), the minimum salary is defined as:
(jj)
“Minimum Team Salary” means the minimum Team Salary a Team must have for a Salary Cap Year as determined in accordance with Article VII, Section 2(b)
The fact that Team Salary is a proper noun in this instance is important, as it generally indicates that there is a relatively strict definition in place.
As such, the CBA also defines Team Salary in Article I:
(nnn)
“Team Salary” means, with respect to a Salary Cap Year, the sum of all Salaries attributable to a Team’s active and former players plus other amounts as computed in accordance with Article VII, less applicable credit amounts as computed in accordance with Article VII.
This more or less solves the debate, as it establishes that Team Salary, not payroll, is used in the determination of a teams position with regards to the Minimum Team Salary. Still, let’s take a look at what the CBA says with regards to acquired players (Article VII Section 2):
“(c)
Assigned Contracts.
For purposes of calculating Team Salary, with respect to any Player Contract that is assigned, the assignee Team shall, upon assignment, have included in its Team Salary the entire Salary for the then-current Salary Cap Year and for all future Salary Cap Years”
(The CBA refers to players who have been traded as having been “assigned to another team”).
It is the above information that I used to arrive at the conclusion that Team Salary is used when determining whether or not a team has reached the minimum salary, and that a players full season salary is used when calculating Team Salary.
Resources:
Update – November 13th, 2014
The rule was changed during the latest iteration of the Collective Bargaining Agreement, which came out in late 2011. Before that, team payroll was used. After that, total team salary was used. That explains the discrepancy, as Deeks likely simply forgot that the rule was changed.
Pingback: How the Sixers did — and didn’t — turn a profit last year - nba.DerekBodner.com