Phoenix Suns: Circumventing the ‘reacquisition rule’
By Luke Swiatek
Why exploit it at all?
In the Ilgauskas situation, the benefit for the Cavaliers was essentially getting Antawn Jamison for just a low first round pick. Typically, salary cap issues are the driving force behind a circumvention of this variety.
Imagine a situation where a team wants to acquire a player without losing anyone else on its roster, but is close enough to the cap that salary issues becomes a hindrance in the deal. The Phoenix Suns are a prime example of a team right around the cap.
If they wanted to acquire a player such as Nikola Vucevic from the Orlando Magic for a first round pick, they would be unable to. His $12.8 million salary couldn’t just be absorbed by the Suns, because the Suns don’t have that much cap space.
However, the Suns could make the trade include Tyson Chandler‘s $13.6 million contract, have the Magic waive Chandler (and pay his salary), and then the Suns could sign Chandler to a minimum contract once he cleared waivers. Or at least, they could do that if the CBA didn’t obviously prevent them from doing it now with the one-year waiting period.
More from Hoops Habit
- 7 Players the Miami Heat might replace Herro with by the trade deadline
- Meet Cooper Flagg: The best American prospect since LeBron James
- Are the Miami Heat laying the groundwork for their next super team?
- Sophomore Jump: 5 second-year NBA players bound to breakout
- NBA Trades: The Lakers bolster their frontcourt in this deal with the Pacers
Another reason a team could want to circumvent these rules is to save salary cap/luxury tax money. The Carmelo Anthony – Oklahoma City Thunder saga is particularly illustrative of this point.
Deep into the luxury tax, OKC had no intentions of paying Carmelo Anthony $27.9 million; even waiving him and stretching his contract over three years would save the franchise around $100 million. However, if the Thunder still wanted him on the team, they could have searched for a way to bring him back while altering his cap figure.
Before the loophole was closed, they could’ve done the same basic thing the Cavaliers did: traded him along with draft compensation, waited for him to clear waivers, then signed him again on a minimum contract.
They could’ve saved even more than a $100 million by slashing his salary down to the minimum of $2.4 million (instead of stretching him, which would’ve required they pay him $9.3 million over three years). This, of course, would’ve saved them significantly more money in taxes as well.
For Melo, there’s no reason not to agree to the deal. He gets an extra $2.4 million this year (or a bit less, if he agrees to a buyout like he actually did with the Hawks) and essentially stays on the same team.
The Atlanta Hawks pay extra money and get draft compensation for it; it’s a classic salary dump. Why would they care who Melo signs with after they waive him? Paying for first round draft picks directly might be illegal, but a salary dump has been a common way to get around that rule for years.
It all seems perfect… if only there was a way to accomplish it now that the 30-day waiting period was changed to a year-long one.