David Lough OF KC

[Paul S.]

$1m - $0.5m (2014)

[joeshmoe]

$1m - $0.5m (2014)

2m

[BHows]

Fantrax won't allow to add to your roster. You are at your 60 man limit and need to drop a player. Let me know who and we'll get it processed.

[joeshmoe]

Fantrax won't allow to add to your roster. You are at your 60 man limit and need to drop a player. Let me know who and we'll get it processed.

Okay I have no clue about drops anymore.  I would like to release Dallas Braden, 3m, 2015.  Please help with the transaction.

[joeshmoe]

Okay I have no clue about drops anymore.  I would like to release Dallas Braden, 3m, 2015.  Please help with the transaction.

I believe it is this (note correction to Braden's contract - 2014):

SP Braden, Dallas, $3m (2014), signed 2/4/12

2013 = 3.0m x .9 = 2.7m
2014 = 3.0m x .6 = 1.8m

Total owed = 2.7m + 1.8m = 4.5m

Now I want to use a finance clause so I must multiply 4.5m x 1.1  which gives me 4,950,000.  That is then rounded to the nearest 250,000 and becomes 5m.  The buyout then is 5m divided by two years = 2.5m per.

Correct?

[joeshmoe]

And then I need .5m more, so cut Stephen Parker, P-n/a.

Then Sign lough to a two year deal.

[BHows]

You can either release:
2013 cap hit of $2.5m ($3m @ 90% = $2.7m rounded to $2.5m)
2014 cap hit of $2m ($3m @ 60% = $1.8m rounded to $2m)
Total- $4.5M

OR

Buyout
 $3m x 2 years = $6m x 1.1 =$6.6m rounded up to $7m

[Paul S.]

Sorry about giving you the wrong information Rick.  After reviewing it the example on Carlos Silva would apply here with a total of $4.5m for the buyout.  The question is why would he do a contract buyout of $2.5m for each year when a normal release would be $2.5m in 2013 and only $2m in 2014?

I believe it is this (note correction to Braden's contract - 2014):

SP Braden, Dallas, $3m (2014), signed 2/4/12

2013 = 3.0m x .9 = 2.7m  rounded to $2.5m
2014 = 3.0m x .6 = 1.8m  rounded to $2m

Total owed = 2.7m + 1.8m = 4.5m  $2.5m + $2m - $4.5m

Now I want to use a finance clause so I must multiply 4.5m x 1.1  which gives me 4,950,000.  That is then rounded to the nearest 250,000 and becomes 5m.  The buyout then is 5m divided by two years = 2.5m per.

Correct?

Contract Buyout
Money owed to a player released under contract may be financed through a contract buyout.  This can be done by adding up the total remaining contract amount, multiplying it by 1.1 rounded up to the nearest $500k.  This amount may be divided up any way you choose as long as the number of years is not more than what it was before AND that no salary owed in any year is more than an amount in a prior year.  I will use some current examples to highlight the effects of the buyout and its 10% tax.

Quote

    Jones, Andruw, Released Under Contract ($5m in 2009, $3m from 2010 to 2014)
    Jones' salary hit doesn't fall under the 90/60/30 cap hit rules because these liabilities were inherited. The lump sum as of 2009 is $20m.  Applying the buyout tax of 10% ($2m), and the cap hit can be consolidated into $22m for 2009.

    Now, the Dodgers don't have the room to take on such a hit, so what if they wanted to arrange something for 2010 instead of 2009?  I would vouch for an additional rule to say that when a cap hit is consolidated, it must start in the current year and not increase in any future years.  Also, the number of years of the buyout must be less than or equal to the number of years in the current cap hit.  Say the Dodgers only have $4.5m in cap room, but they wish to max that out for Jones' contract buyout.  Now, note that Jones already has a $5m cap hit in 2009, so that needs to be taken out of the equation.  They really have $9.5m in cap room without Jones' liability.

    They may now divide the $22m liability in a myriad of different ways as long as it does not go beyond 2014 and is never increasing from one year to the next...

        $9.5m, $9.5m, $3m
        $9.5m, $8m, $4m
        $8m, $7m, $7m
        $7m, $6m, $5m, $4m
        $6m, $5m, $4m, $4m, $3m


    The point of consolidating the cap hit is to relieve your team from liabilities in future years, so I imagine the first option would be taken.  Let's do another example with Carlos Silva, formerly of the Seattle Mariners.

    Silva, Carlos, Released under contract (2012 option not exercised), $7m in 2010, $3.5m in 2011, $11m in 2009
    The lump sum is $21.5m (10% is $2.15m, rounded up to $2.5m), so the buyout lump sum is a whopping $24m.  With no room under the cap, a buyout isn't possible for 2009.  The team will have to wait until the offseason, so they can arrange a 2010 buyout.  Assume the Mariners have tons of cap room in the 2009-2010 offseason, so they arrange this buyout as one of the top priorities.  The lump sum is now $10.5m (10% is $1.05m, rounded up to $1.5m), so the buyout lump sum is $12m.  They may decide to take it all in 2010, or split it between 2010 and 2011 where the 2010 cap hit is not less than the 2011 cap hit.

    Another example with a mid-market team that has some room under the cap for 2009...

    Riske, David, Released Under Contract, $2.5m in 2010, $4m in 2009
    The Brew Crew is $5.5m under the cap, but without Riske in the situation, they are $8m under the cap.  The lump sum for Riske's contract is $6.5m (10% is $650k, rounded up to $1m), so the buyout lump sum is $7.5m.  They may opt to consolidate the cap hit into 2009.

[joeshmoe]

So the only way to release Dallas is for the Padres to take on more salary commitment one way or another?  There is no salary cap relief at all?  I am really confused as to this all. 

Either one way you take the total sum and you add on top of it.  Or the other way you take the fractions but it all has to be paid this year?

Here is where my understanding is rooted:

Releasing Players

    Any player dropped before the trade deadline still has part of his contract count against the cap in the following manner:  Current year: 90%, Next year: 60%, All future years after: 30%.
    If the player is dropped after the trade deadline, then the hit to the cap changes to 75%, 50%, 25%, respectively.
    The hit against the cap is rounded to the nearest $500,000.  Therefore, if it ends up being less than $250,000, the hit to the cap will be zero for that year.
    You may not bid on a player that you have released for a period of 30 days.  If you resign a player, their original contract is restored.
    Any player released under a prospect contract will not cause a hit to the cap.


Contract Buyout
Money owed to a player released under contract may be financed through a contract buyout.  This can be done by adding up the total remaining contract amount, multiplying it by 1.1 rounded up to the nearest $500k.  This amount may be divided up any way you choose as long as the number of years is not more than what it was before AND that no salary owed in any year is more than an amount in a prior year.  I will use some current examples to highlight the effects of the buyout and its 10% tax.

It appears to me as if all players go through a release and once the release is calculated you may finance the release with a buyout but you have to pay for it with a 10 tax. 

Lastly the line in bold and italics shows that the released under contract clause is used for all players in all situations.  And then, one may be subject to the buyout after the releasing is completed.

[joeshmoe]

Sorry about giving you the wrong information Rick.  After reviewing it the example on Carlos Silva would apply here with a total of $4.5m for the buyout.  The question is why would he do a contract buyout of $2.5m for each year when a normal release would be $2.5m in 2013 and only $2m in 2014?

Because that's not how a a normal release would work, it would be 4.5m in 2013; as you can't split it into multiple years.