With teams making some final tweaks to their rosters heading into the final weeks of the season, let’s take a look at one of the most interesting wrinkles in the NBA salary cap. The cap hold exists primarily to close a loophole. Without cap holds, a team could structure a bunch of its contracts to end simultaneously, giving them cap room to pursue other teams’ free agents while still possessing Bird rights on its own free agents. Almost every team in the NBA has a cap hold on someone. There are free agent cap holds and draft pick cap holds, but the largest ones fall into the free agent category. Whenever a player’s contract with a team ends, it creates a cap hold (see Larry Coon’s CBA FAQ for how the amount of the cap hold is determined).
So even though a player is no longer getting paid, he can still be on the books for a large number. The cap hold doesn’t go away unless the team waives the player or renounces its rights to him, or until the player signs with another team or formally files retirement papers with the league. Players are often slow to file that paperwork, as there’s no real impetus to do so until they’re eligible for a pension. Teams often won’t renounce the rights to retired players so they can throw them into trades, as with the Keith Van Horn deal a few years ago, and because there’s little reason to do so if the team is over the cap anyway, since cap holds don’t count for luxury tax purposes.
Andrei Kirilenko, Jazz: $18,091,250
Wally Szczerbiak, Cavs: $18,091,250
Jeff Green, Celtics: $11,139,970
Marcus Banks, Hornets: $9,210,413
Darius Songaila, 76ers: $9,154,200
Richard Hamilton, Pistons: $8,430,293
Nenad Krstic, Celtics: $8,314,674
Pat Garrity, Magic: $7,342,075
Julian Wright, Raptors: $7,145,143
Steven Hunter, Grizzlies: $7,022,400
Robert Horry, Spurs $6,897,000
Greg Ostertag, Jazz: $6,305,000
Aaron Brooks, Suns: $5,041,730