Amnesty Provision

May 15 2012 at 2:02pm CDT By Luke Adams

The amnesty provision provides a team an opportunity to clear a bad contract from its books for salary cap and luxury tax purposes. Although a team still has to pay the remainder of the amnestied player's salary, as it would for any released player, the player's salary no longer counts against the team's cap (except for minimum payroll purposes) when the amnesty clause is used.

The amnesty provision can be used on any player, as long as the following rules are observed:

  • A team can only amnesty one player — not one player per season. For instance, since the Knicks used their amnesty clause on Chauncey Billups last December, they can't use it on Amare Stoudemire or any other player going forward.
  • The amnesty provision can only be used on a player who signed his contract prior to July 1st, 2011. If a contract was signed, extended, or renegotiated after that date, the player cannot be amnestied. For instance, the Nuggets couldn't amnesty Arron Afflalo, Wilson Chandler, or Danilo Gallinari at any point, since all three players signed new contracts this season.
  • A team can only use its amnesty provision on a player who was on the roster on July 1st, 2011. If a player was traded after that date, he cannot be amnestied. For instance, the Spurs can't amnesty Stephen Jackson, since they acquired him in March from the Warriors.
  • The amnesty clause can only be used during the seven days following the July moratorium. If a team doesn't amnesty a player during that week, it won't get another chance to do so until the following July.
  • A team that has yet to use its amnesty clause can do so in any of the next four years. The 2015/16 season is the last year that a player can be amnestied, under the current CBA.

Amnestied players are placed on waivers, but the waiver rules are slightly different than usual. A team can still place a full waiver claim on an amnestied player, if it doesn't mind being on the hook for the rest of the player's contract. However, a team also has the option to submit a partial waiver claim, in what essentially amounts to an auction for the player's services. If no team places a full claim, the team with the highest partial claim is awarded the player. If two teams bid the same amount, the club with the worse record wins out.

When a team lands a player with a partial claim, it must pay the player the amount of the bid, spread out evenly among the remaining years on the contract, along with 100% of any non-guaranteed salary in the contract. For instance, when Travis Outlaw was amnestied by the Nets with four years and $28MM remaining on his contract, the Kings submitted a $12MM bid. Sacramento will now pay Outlaw $3MM ($12MM spread over four years) for each of the next four seasons, while the Nets pay the remaining annual $4MM, which doesn't count against their cap.

The minimum amount a team can submit for a partial waiver claim is whichever of the following amounts is greater:

  • The sum of the player's minimum salary for all remaining years of his contract, except for non-guaranteed years.
  • The sum of the player's non-guaranteed salary in partially guaranteed years.

In the case of Outlaw, because he had no partially guaranteed years on his deal, the minimum bid for him would have been about $5.3MM — the sum of his minimum salary for the next four years. Any team submitting a partial claim for an amnestied player must have the necessary cap space to fit the annual amount of its bid. For example, the Kings needed $3MM in cap space when they made their $12MM claim for Outlaw.

If an amnestied player is not claimed on waivers, he becomes a free agent, able to sign with any team except the one that released him. A club is ineligible to re-sign or re-acquire its amnestied player for the remainder of his contract (including ETO years, but not team- or player-option years).

In 2011, seven teams (the Cavaliers, Knicks, Magic, Nets, Pacers, Trail Blazers, and Warriors) used their amnesty provisions. You can find more information on the players those clubs amnestied here.

Note: This is a Hoops Rumors Glossary entry. Our glossary posts will explain specific rules relating to trades, free agency, or other aspects of the NBA's Collective Bargaining Agreement. Larry Coon's Salary Cap FAQ was used in the creation of this post.

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