David Lough OF KC

[joeshmoe]

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.

Not trying to beat a dead horse here but one final point to show Colby intended to use the 90/60/30 clause for "non-inherited liablities" (i.e. original contracts) is here; where he makes a specific distinction to not use the 90/60/30 clause because this is specifically an "inherited liability" (original contract).

[Paul S.]

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?

You are not taking on additional salary and are getting salary relief either way.  With the buyout you have a $2.5m cap hit each year but the $3m salary goes away for a net salary relief of $0.5m each year.  With the release you have a $2.5m cap hit for 2013 and $2m for 2014 without the $3m salary for a net salary relief of $0.5m in 2013 and $1m in 2014.  You have $0.5m more in salary relief in 2014 with the release than you would get with the contract buyout.  A release made after the trade deadline would result in an additional $0.5m in salary relief for 2014.  The purpose of the contract buyout is not to  reduce salary but to use surplus cash now in order to reduce future payments.

[joeshmoe]

You are not taking on additional salary and are getting salary relief either way.  With the buyout you have a $2.5m cap hit each year but the $3m salary goes away for a net salary relief of $0.5m each year.  With the release you have a $2.5m cap hit for 2013 and $2m for 2014 without the $3m salary for a net salary relief of $0.5m in 2013 and $1m in 2014.  You have $0.5m more in salary relief in 2014 with the release than you would get with the contract buyout.  A release made after the trade deadline would result in an additional $0.5m in salary relief for 2014.  The purpose of the contract buyout is not to  reduce salary but to use surplus cash now in order to reduce future payments.

I thought a flat out release is consolidated into one single payment of 4.5m.

In order to spread the payments over the period of the payments dont you have to use a buyout to finance?

[shooter47]

I thought a flat out release is consolidated into one single payment of 4.5m.

In order to spread the payments over the period of the payments dont you have to use a buyout to finance?

a release would give you cap hits in 2013 and 2014. The buyout is used to consolidate future cap hits to one lump sum that would be paid this year. To do this you have to pay a premium (10% buyout fee) to consolidate the cap to the present year and relieve yourself of future cap hits. In your example instead of taking the 2.5M 2013 and 2.0M 2014 cap hits you could use the buyout (and 10% fee) and pay 5.0M this year to free yourself off the 2.0M 2014 cap hit.

2.5M 2013 and 2.0M 2014 cap hits

or

5.0M 2013 cap hit

[joeshmoe]

a release would give you cap hits in 2013 and 2014. The buyout is used to consolidate future cap hits to one lump sum that would be paid this year. To do this you have to pay a premium (10% buyout fee) to consolidate the cap to the present year and relieve yourself of future cap hits. In your example instead of taking the 2.5M 2013 and 2.0M 2014 cap hits you could use the buyout (and 10% fee) and pay 5.0M this year to free yourself off the 2.0M 2014 cap hit.

2.5M 2013 and 2.0M 2014 cap hits

or

5.0M 2013 cap hit

Okay well I will flat out release him for a hit of 2.5 this year and 2.0m next season.

[BHows]

Fantraxed 7/9/13

[joeshmoe]