Grizzlies Find a Way Around Minimum Salary Requirement
But there's also something called a minimum team salary, the level of player spending teams must exceed each year. The collective bargaining agreement signed in 2005 sets the minimum team salary at 75% of the salary cap level. For the upcoming 2009-10 season, that minimum salary would be $43.2 million.
Would you believe that the masters of the cheap, the Memphis Grizzlies, have found a way around the minimum salary? And would you believe it explains the Zach Randolph trade?
It should be no surprise. Heck, on Friday the Grizzlies agreed to take Steven Hunter off Denver's hands. Hunter, an oft-injured center, is owed $3.6 million next season. Conveniently, the Nuggets gave $3 million -- the maximum amount one team can give another -- to take over the deal. Again: this is no surprise, this is how Memphis operates. (In July, the team made a profit on the Shawn Marion deal by taking at least $3 million -- possibly $6 million -- to cover Jerry Stackhouse's $2 million buy-out, even though the team also lost Greg Buckner's $1 million guaranteed contract in the process. At the very least, the Marion deal, in which Memphis was a lubricant, covered the rest of Hunter's salary this season. At best, it covered for Hunter and, say, Rudy Gay.)
But the minimum team salary, that's sacred. How in the world does a team bargain around that? Two words: Zach Randolph ... OK, two more: deferred salary.
The contract Randolph signed with the Blazers in 2004 including an interesting twist: 30% of the salary was deferred until 2012. Salary deferrment isn't entirely unique, but the size of the portion of Z-Bo's contract delayed is important, and rare (if not altogether unheard-of in today's NBA).
For salary cap counting purposes, Randolph's contract is structured like any ol' six-year contract: the totality of his contract ($84 million) is covered within the six years it employs him. That includes a cap figure of $16 million this year and $17.3 million next season.
But in actuality, the Grizzlies need only pay Randolph $11.2 million this season. The rest of the money owed will be a part of $25 million Randolph will earn over six years beginning in 2012.
So what's the problem? Before Memphis traded for Z-Bo in July, it sat below the minimum salary level -- at roughly $36 million. On paper, the trade took the Memphis salary to $43.3 million -- conveniently above the minimum salary threshold. But really, because of Randolph's deferred salary, the Grizz were only on the hook for $38.5 million, or about $5 million less than the minimum amount the team is supposed to spend on talent.
The Hunter move, as well as eventual second-round pick signings, will push the salary cap level higher, though in a real-world sense the Grizzlies are paying very few players this season. This isn't meant to elucidate some loophole, or to tattle on the Grizzlies. But so long as local Memphis media continues to repurpose the company line which says, "No no no, we're doing GREAT!, never mind that we have more losses than any other team over the last three years and our gym is empty, we're still making money and that's all the matters!" ... so long as Michael Heisley's defense gets an uncritical parroting from certain parts of the news media in Tennessee, fans need to know just how much team management is angling to make a profit with no interest in fielding a competitive basketball team.
(By the way: yes, Memphis would be on the hook for Randolph's deferred payment schedule beginning in 2012 ... if the team doesn't trade him first. There's a substantial chance that by 2012 Heisley will have sold the team. That's roughly the year in which the team's relocation penalty becomes feasible to pay. If Heisley does sell before 2012, that means he has personally escaped minimum salary requirements for this season, providing the team doesn't go out and sign Allen Iverson or something.)