Salary Cap - the cap is a soft cap which means you can overspend it. If you do, you have to pay a luxury tax that is going to increase in the next two seasons. Right now, for every dollar you go over the cap, you have to pay $1.50 on the dollar to the league and that money is distributed equally to the other teams. So if you're 15,000,000 over the cap, you have to pay your payroll and then on top of that pay 22,500,000 to the rest of the league.jim wrote:I don't understand the NBA rules at all. Can someone explain how the salary cap works, what is a sign and trade, restricted FA, etc.. I can't even follow the off season because I don't even speak the language.
Sign & trade - In the NBA, to get a trade approved, the total value of the contracts traded have to be a certain percentage away from each other to be approved. You couldn't just trade Dwight Howard's contract for someone making $2,000,000. It has to be close to equal. So what a sign and trade does is allows teams to sign a player to a certain contract amount so it can be traded for another player's contract that wouldn't have been close enough in value before the signing. Also, teams who have a player's rights can sign their player to a larger contract than another team if they are unrestricted free agents. That's called the Bird Rule. It's designed to give players incentives to stay with their original team. A sign and trade in that scenario would allow the player to make the most money they can and move to a different team.
Restricted FA - Restricted free agents are at the end of their contract, but no matter how much another team offers them, their original team has the right to match. So Eric Gordon got offered a huge contract by the Suns, but since he's restricted, the Hornets matched and he had to stay. It's designed to prevent young stars from being able to leave their crappy market for more desirable teams. As in the Jeremy Lin situation, teams can choose not to match, allowing the player to take the bigger contract offer.
