Every so often, I uncover an intricate salary cap situation that I find interesting enough to write about, even though it does not involve the Miami Heat. Last year, I wrote about the Chicago Bulls – and how they maneuvered, at times I feel incorrectly, around luxury tax issues. This year, the most fascinating story could revolve around the Los Angeles Clippers – and how they maneuver around a hard cap. This post is quite involved and technical, so my apologies for that in advance.
The concept behind the NBA’s salary cap is actually quite simple: It’s a soft cap. Teams can spend freely within the confines of it. But, in order to exceed the cap, teams must utilize exceptions.
The rules that underlie this basic concept, however, can be quite complex – so complex, in fact, that when the league adds new rules in any new CBA, they sometimes conflict with other rules and, as a result, create unintended consequences that need to be subsequently rectified.
The latest CBA contains one such new rule: the implementation of an “apron” that is slotted $4 million above the tax line, which for the upcoming season is set at $76.829 million. That puts the “apron” at $80.829 million. Teams are banned from exceeding the apron, even by a single penny, if they engage in certain transactions after July 1. On that list: using the full midlevel exception, using the bi-annual exception, and accepting another team’s free agent by means of a sign-and-trade.
If a team engages in such activity, the apron becomes a hammer – a hard cap which cannot be exceeded under any circumstance. Merely approach it, and it becomes increasingly difficult to make trades that bring in more salary than they send out, or even sign minimum-salary players when injuries strike. It is a constant menace floating in the distance.
The Los Angeles Clippers are well aware of the restrictions imposed by the apron. They became hard-capped at the apron after using the full mid-level exception on Spencer Hawes and the bi-annual exception on Jordan Farmar, each on July 10 of this year. As a result, they need to operate within the confines of the apron for the rest of the 2014-15 NBA season. Read more…