Showing posts with label Expiring Contracts. Show all posts
Showing posts with label Expiring Contracts. Show all posts

Friday, August 13, 2010

Exploring the Worth of the Expiring Contract as an Asset


Yesterday I mentioned in my trade analysis that it is rare nowadays to see a trade be mostly about acquiring basketball talent and not trying to cut salary.

As such, the growing conception in the media is that expiring contracts, that is players with big contracts that expire that year, are very valuable assets for a team to have.  The idea is that teams with expiring contracts can use the contracts themselves to get something they want, like getting under the luxury tax for instance, or grabbing young players with smaller contracts and more potential.

This year's expiring contracts look to be especially attractive according to experts, because the Collective Bargaining Agreement is set to expire and it is widely assumed that more limitations will be placed on teams, and salary will be slashed across the board.

It seems to me though that a lot of these "valuable" contracts don't get traded at all though.  But since I like to be more analytical than "It seems to me", lets take a look at the actual expiring contracts over the last few years and see what's been done with them.  We will be ignoring rookie scale contracts as expiring since those players go on to become Restricted Free Agents, players with Player Options or Early Termination clauses, and also players with salaries less than $3 million as the value of their expiring contracts would not be considered significant enough to trade for (unless a team was really close to being under the tax).

I will warn you now, this is a long article.  If you see an egregious mistake, (there's bound to be at least one I didn't see) let me know and I'll fix it right away.