Luxury Tax and Draft Right Salaries Question

I have 2 separate questions. 1. Does a draft rights cap hold count towards the luxury tax calculation? Seeing as how the cap hold disappears during the regular season, I'm assuming no. 2. In a scenario, say with Victor Claver, where he completely blows up and becomes a super megastar in Europe and says the rookie scale salary is not enough to bring him over. Can the Blazers renounce his draft rights, then have a wink, wink, handshake deal to sign him as a free agent to a bigger contract to bring him over? Is this a viable way of circumventing the rookie pay scale at the risk of him signing with another team? Purely hypothetical.

4 months ago blzrfan 3 comments 0 recs |

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1) No. Luxury tax is (essentially) calculated by a team’s total salary on the last day of the regular season. No cap holds for draft picks playing for other teams count on that day, so they aren’t included in luxury tax calculations. That was easy.

2) Tougher question. Fortunately, there was a discussion of this very issue on the RealGM board for CBA/Business issues.

http://www.realgm.com/boards/viewtopic.php?f=4&t=899932

The answer is that once 3 seasons have passed since the player was drafted, a team can use cap room, the MLE or a disabled player exception to sign the draft pick to a larger contract than his rookie scale amount. As the thread at RealGM mentions, many believe that the Spurs will use this to sign Splitter next summer.

by Storyteller on Jun 26, 2009 4:19 PM PDT reply actions 0 recs