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The NBA CBA, Amnesty Rule and the League's Worst Contracts

Proposed new labor deal may allow teams to cut their worst contracts


Gilbert Arenas

Gilbert Arenas, remarkably, is still owed $60 million.

Chris McGrath/Getty Images
Updated August 02, 2011
The NBA's latest CBA proposal reportedly includes an "amnesty clause" - a one-time opportunity for teams to remove their worst contracts from the books.

NBA teams have had this opportunity once before. In 2005, teams were given the chance to waive a single player contract. Teams were still bound to pay the players' salary, and the salaries continued to count against the cap, but teams were freed from any obligation to pay luxury tax on those salaries.

That rule came to be known as the "Allan Houston Rule" - based on the general assumption that New York would jump at the opportunity to waive their oft-injured, high-priced guard. (In an ironic twist, Houston was not waived under the rule that bears his name - the Knicks gambled that Houston's injuries would prove to be career-ending, and that they'd get cap - and insurance - relief as a result. That turned out to be the team's savviest personnel move of the decade.)

The provision in the owners' CBA proposal may be similar, though it seems reasonable to assume that this amnesty clause would remove contracts from the salary cap number as well, especially if accompanied by a substantial reduction in the cap number or the elimination of cap "exceptions."

That's interesting for a couple of reasons. A big wave of amnesty-clause free agents would make the 2011 free-agent class a lot deeper -- and if we assume that the waived players would still collect money owed under their existing contracts, those new free agents might be willing to work for very little. It would also give teams that are struggling under the weight of some bad decisions to add some talent over the summer.

Which players would be impacted? A quick look at each team's payroll offers quite a few clues. (All salary figures are from the invaluable team payroll listings at HoopsHype.com.

The NBA's Worst Contracts: 2011-on

Atlanta: Joe Johnson's mammoth contract (which will pay him nearly $25 million in 2015-16) is generally regarded as the league's worst. But can the Hawks afford to part ways with their best player? Kirk Hinrich ($8 million in 2011-12) might be another candidate, given Jeff Teague's emergence in the playoffs.

Boston: The Celtics still have Rasheed Wallace on the books for over $6.7 million in 2011-12. He's the obvious choice.

Charlotte: Their draft-day trade with Milwaukee cleared Charlotte's ugliest contract - Stephen Jackson's - off the books. Corey Maggette is significantly overpaid, but at least his deal expires after the 2012-13 season.

Chicago: The Bulls are in excellent shape, payroll-wise; their core is locked up through 2012-13, and no player is making a really outrageous sum.

Cleveland: The Cavs would happily part ways with Antawn Jamison (owed over $15 million in 2011-12) or Baron Davis (owed nearly $29 million over the next two seasons).

Dallas: I suspect the Mavs would rather not have Brendan Haywood on the books for $42 million through the 2015-16 season, especially if it means losing their flexibility to re-sign Tyson Chandler and replace an aging Jason Kidd when the time comes.

Denver: The Nuggets only real contract extravagance is Al Harrington's deal, which runs through the 2014-15 season at an average of over $7 million per year.

Detroit: Joe Dumars has been trying to part ways with Rip Hamilton for the better part of a year - this could be his chance.

Golden State: A lot depends on what sort of team the Warriors want to be. If they decide to get away from their offense-first philosophy, they could re-think their long-term commitment to David Lee. Andris Biedrins could lose playing time to 2010-11 rookie Ekpe Udoh, and ($9 million/year through 2013-14) would also make a lot of sense.

Houston: Unloading Brad Miller on draft night cleared the Rockets' worst liability off the books. Hasheem Thabeet doesn't give the team much, but he's still on a rookie deal and could be gone after this season.

Indiana: Danny Granger is the only Pacer signed beyond next season (if you ignore a variety of player/team options). Indiana could clear a little space for 2011-12 by cutting ties with James Posey ($6.9 million) a year early.

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