The RC approved 5-1 to enable GMs to restructure contracts for overpaid players. The rules are listed below with an example. Basically, all of the extra money over their market value can be rolled into a signing bonus (remember, this stays with your team). This restructuring is valid until the trade deadline. GMs, you now have another option to consider when dealing with dead weights.
Restructuring Contracts- Annual salary after such restructuring must be $4m+
- Restructuring allows annual salary to be reduced if player's market value (extension price) is less than or equal to half that of what he is paid.
- Total reduction in salary is converted into a guaranteed signing bonus during the current (or upcoming for off-season) year.
- Restructuring of contracts is not allowed during the period after the trade deadline and before the off-season.
Here is an example using hypothetical rankings and market values with a real contract.
Derek Lowe, $15.5m (2012)
Let's say his market value is $5.5m, and the team owning him at the time has plenty of cap space. The restructuring says that his new annual say is $5.5m. However, the leftover money now front-loaded to him in the form of a bonus (100% guaranteed). The signing bonus is then a whopping $30m.
Now, let's say the team doesn't have that cap room, but they want to restructure the contract a little bit. Well, that example is the extreme... the team can play the middle ground and reduce the annual salary to $10.5m per say for a signing bonus of $15m.
Such restructuring of contracts is not allowed from August 1st to the end of the playoffs to prevent teams from abusing the restructuring to make it count for an additional season.
