The word “amnesty” can mean a pardon granted by the Crown or Executive and effected by statute, or in the alternative, to overlook or forget. What in the world does the word amnesty have to do with an NBA Collective Bargaining Agreement?
Under the 2005 NBA Collective Bargaining Agreement (“CBA”) one player could be waived prior to the start of the 2005/2006 season. Players who were waived under the 2005 amnesty provision, still received their paychecks and still counted against the salary cap, but their teams did not have to pay luxury tax on the waived salaries. The 2005 amnesty provision was known as the “Allan Houston Rule,” named for the high priced but often injured New York Knicks guard who was thought to be one of the first players waived. The Knicks instead opted to retain Houston, gambling that his injuries would force a retirement and that they would recoup more money through an insurance settlement.[1] Ultimately the Knicks used the Allan Houston Rule on Jerome Williams.
The amnesty rules were substantially changed by the 2011 CBA which allows each team to waive a player without having his salary count toward the salary cap or luxury tax. Essentially the 2011 CBA provides the following amnesty provisions:
(1) Each of the 30 NBA team is permitted to waive one “amnesty” player prior to any one of the first five seasons of the CBA (only for contracts in place at the inception of the CBA) and have 100% of the player’s salary removed from the team salary for salary cap and luxury tax purposes. The one time provision is for use only one time total, not once per season.
(2) Alternatively, a team that previously waived a player prior to the inception of the CBA whose guaranteed salary continues to be included in the team’s payroll for future seasons is permitted to designate that player’s salary for removal from its team salary for salary cap and luxury tax purposes.
(3) Salary of amnestied players is included for purposes of calculating the players’ agreed-upon share of BRI.
(4) Any player who was signed before the 2011/2012 season and can be waived via the amnesty provision. Teams cannot designate any player traded after July 1, 2011, nor any player whose contract has been extended, renegotiated, or otherwise amended after July 1, 2011. Players who were waived before July 1, 2011 and are still receiving guaranteed salaries are also eligible.
(5) A player waived under the amnesty provision must go through the waiver process which lasts 48 hours. During that time the team can claim an amnesty player by making a full waiver claim and asserting the player’s full contract. If no full waiver claims are submitted, partial waiver claims allow teams that have room under the salary cap to bid on the player and acquire him at a reduced rate. The team with the highest bid is awarded the player. If multiple teams bid the same amount, the team with the worst record is awarded the player.
(6) The team that waived the player under the amnesty provision must continue to pay the player’s salary, unless a team assumed the full contract of the waived player. If another team is awarded the player via a partial waiver bid, the new team will pay that amount of the original contract while the waiving team pays the remainder.
(7) The waiving team is not permitted to resign or reacquire the waived player before the end of the term of the terminated player’s contract. [2]
The amnesty rules gives teams a ‘do-over’ and a ‘get-out-of-jail-free card’ under the terms of the 2011 CBA, even thought the player’s contract is still honored in the event another team claims his rights after a release.[3]
A player who is released under this CBA provision is said to be “amnestied.” Some well known NBA players that have been amnestied include: Orlando Magic’s Gilbert Arenas (2011-12), New York Knicks’ Chauncey Billups (2011-12), Cleveland Cavaliers’ Baron Davis (2011-12), Portland Trail Blazers’ Brandon Roy (2011-12), Philadelphia 76ers’ Elton Brand (2012-13) Minnesota Timberwolves Dark Milicic (2012-13), Houston Rockets’ Luis Scola (2012-13), Denver Nuggets’ Chris Andersen (2012-13), Los Angeles Lakers’ Metta World Peace (2013-14), and Miami Heat’s Mike Miller (2013-14).
Under the amnesty rules, the waiving team continues to pay the remainder of the player’s salary for any portion that is not paid by the team that claims the player. Waiver claims can be full or partial. The minimum bid for a partial waiver claim is whichever of the following is larger:
- The sum of the player’s minimum salary for all remaining “protected” years of his contract.
- The sum of all non-guaranteed salary in protected years.”[4]
For example, the Knicks amnestied Chauncey Billups in 2011 with one year remaining on his contract for $14.2 million. The Los Angeles Clippers (“Clippers”) submitted the only bid, for $2,000,032. The Clippers paid Billups the amount of their bid, with the Knicks responsible for the remaining $12,199,968. This system (plus the rules for minimum bids, as described below) helps ensure that the waiving team doesn’t have to pay the player more than they would have paid had they waived their player without amnesty.[5]
The Los Angeles Lakers (“Lakers”) acquired Carlos Boozer (“Boozer”) on amnesty waivers when the Chicago Bulls (“Bulls”) elected to amnesty Boozer, 32 years old, a two time NBA All-Star power forward. Nine teams with cap space were able to make a blind bid to pick up the remaining portion of Boozer’s $16.8 million deal with the Bulls. The Lakers were the winning bidder with a bid of $3.25 million. The Bulls must pay Boozer the remaining $13.6 million that he is owed in 2014/2015 on the final year of his current contract. Releasing Boozer by using the amnesty provision removes his $13.6 million deal from the Bull’s books for salary-cap and luxury-tax purposes.[6]
Teams normally use the amnesty rule to free up salary cap space. If a team uses the rule, “one team’s garbage might become another team’s treasure.” Well, at least an amnestied player “might become another team’s affordable and serviceable player.” “The flip side of the amnesty clause is that other teams can make out like bandits. That’s because unlike a normal waiver claim, a team can pick up an amnestied player for less than the value of his full contract.”[7]
Our own Milwaukee Bucks have also used the amnesty provision when they waived veteran forward Drew Gooden. “Selected fourth overall by Memphis in 2002, Gooden has played with nine teams in his career, averaging 11.8 points and 7.6 rebounds.” He “played in 107 games over three seasons with the Bucks” and averaged 3.3 points and 1.9 rebounds his last season. “Gooden, 31, had two years and $13.36 million left on a five-year, $32 million contract he signed with the Bucks in 2010 He will get paid despite being waived, but Milwaukee won’t have the money count against the salary cap.”[8]
On February 26, 2014, Gooden signed a 10 day contract with the Washington Wizards.[9] On March 8, 2014, he signed a second 10 day contract with the Wizards.[10] On March 18, 2014, he signed with the Wizards for the rest of the season.[11] On July 18, 2014, Gooden was re-signed by the Wizards.[12]
Thank you to Brycen Breazeale for his assistance in researching this article.
[1] Zegers, Charlie, NBA Expert, About.com, http://basketball.about.com/od/nba-cba-glossary/g/amnesty-clause.htm
[2] Paragraphs (1) through (7) disseminated from http://m.newsok.com/breaking-down-the-nbas-amnesty-provision/article/3826854/?page=1 and http://www.cbafaq.com/salarycap.htm#Q69
[3] Beck, Howard, “Poof! Goes a Bad Contract, if Any NBA Team Wishes,” New York Times, November 27, 2011, http://www.nytimes.com/2011/11/28/sports/basketball/each-nba-team-can-waive-one-bad-contract.html
[4] Larry Coon’s NBA Salary Cap FAQ, 2011 Collective Bargaining Agreement, http://www.cbafaq.com/salarycap.htm#Q69
[5] Larry Coon’s NBA Salary Cap FAQ, 2011 Collective Bargaining Agreement, http://www.cbafaq.com/salarycap.htm#Q69
[6] Windhorst, Brian, “Source: L.A.’s Boozer bid $3.25M,” Espn.com, July 18, 2014, http://espn.go.com/los-angeles/nba/story/_/id/11229606/carlos-boozer-join-los-angeles-lakers
[7] Scaletta, Kelly, “r NBA Teams Hoping Chicago Bulls Amnesty Carlos Boozer,” April 26, 2014, http://bleacherreport.com/articles/2042772-5-nba-teams-hoping-chicago-bulls-amnesty-carlos-boozer
[8] Espn.com News Services, “Bucks Waive Drew Gooden,” July 16, 2013, http://espn.go.com/nba/story/_/id/9483836/drew-gooden-waived-milwaukee-bucks-amnesty-provision
[9] NBA, “Wizards Sign Drew Gooden to 10-day Contract,” February 26, 2014, http://www.nba.com/wizards/wizards-sign-drew-gooden-10-day-contract
[10] Borges, Nick, “Another 10 days for Drew Gordon, March 7, 2014, http://insider.espn.go.com/blog/nba/rumors/post?id=23411&ex_cid=espnapi_public
[11] NBA, “Wizards Sign Gooden for Remainder of Season,” March 18, 2014, http://www.nba.com/wizards/wizards-sign-gooden-remainder-season
[12] NBA, “Wizards Re-Sign Drew Gooden,” July 18, 2014, http://www.nba.com/wizards/wizards-re-sign-drew-gooden