Hoops Rumors Glossary: Gilbert Arenas Provision
Gilbert Arenas hasn’t played in the NBA since 2012, but the Mavericks and especially the Lakers are liable to owe him a debt of gratitude this summer. Jordan Clarkson has been a revelation in the two seasons since the Lakers made him the 46th overall pick, and Dwight Powell, the player drafted immediately before him, has emerged as a promising part of the Dallas rotation this season, averaging 11.2 rebounds per 36 minutes. The problem for their respective teams is that they’re due for restricted free agency this summer and their teams only have Early Bird rights on them, meaning, unless they clear cap space, they’ll be unable to exceed the cap to re-sign them for more than the NBA’s average salary. The situation would ostensibly leave the Lakers and Mavs vulnerable to losing assets to another team, but that’s where Arenas comes in.
The NBA introduced the Gilbert Arenas provision in the 2005 collective bargaining agreement as a way to help teams to retain their young restricted free agents who aren’t coming off rookie scale contracts. The name of the rule stems from 2003, when the Warriors had only Early Bird rights on Arenas as he entered free agency and signed an offer sheet with the Wizards starting at about $8.5MM. Because Golden State could only offer Arenas a first-year salary of about $4.9MM using the Early Bird exception, the Warriors were unable to match the offer sheet and lost Arenas to Washington.
The Arenas provision limits the first-year salary that teams can offer restricted free agents who have only been in the league for one or two years. The starting salary for an offer sheet can’t exceed the amount of the non-taxpayer’s mid-level exception, which allows the player’s original team to use either the mid-level or Early Bird rights to match it. Otherwise, a team without the necessary cap space would be powerless to keep its player, like the Warriors were with Arenas.
An offer sheet from another team can still have an average annual salary that exceeds the non-taxpayer’s mid-level, however. The annual raises are limited to 4.5% between years one and two, and 4.1% between years three and four, but a significant raise can be included between the second and third years of the offer. A team’s cap space and leaguewide maximum-salary limits dictate the average annual salary for the entire contract, since the average salary still has to fit under the cap and a player can’t make more than the max. Let’s use Clarkson as an example to see how the Arenas provision functions.
Clarkson under normal circumstances would be eligible for a maximum-salary deal that starts at a projected $20.4MM next season. Offer sheets in such a circumstance could cover four years with 4.5% raises, so the total value of the contract would be $87.108MM, based on that $20.4MM projection. However, the Arenas provision reduces the total value an offer sheet could cover to $56,893,260, again based on that $20.4MM max projection. Clarkson couldn’t make more than the mid-level in the first season and a 4.5% raise on the mid-level in the second season, and he’d be limited in year three — the year that the Arenas provision allows a massive raise — to no more than he could make in year three on a standard offer sheet. Here’s how the maximum Arenas provision offer sheet to Clarkson would break down:
- Year 1 — $5,628,000
- Year 2 — $5,881,260
- Year 3 — $22,236,000
- Year 4 — $23,148,000
- Total — $56,893,260
A few additional restrictions apply on such offers, since teams have to promise the full value of the mid-level and a 4.5% raise for year two in order to give the massive jump in salary between years two and three. Such an offer has to be fully guaranteed, and no bonuses are allowed.
The Lakers, with Clarkson’s Early Bird rights, are limited to offering him a contract with a starting salary of no more than 4.5% greater than this season’s average salary. That means it would start at roughly $6MM. The raises couldn’t exceed 7.5%, and it could run only four seasons.
- Year 1 — $6,000,000
- Year 2 — $6,450,000
- Year 3 — $6,900,000
- Year 4 — $7,350,000
- Total — $26,700,000
However, if the Lakers clear cap space, as they’ll likely be capable of doing this summer, they would be allowed to offer Clarkson a full maximum-salary deal that’s not subject to the Arenas provision rules. As with standard free agents, the incumbent team can offer an extra year and 7.5% raises. So, the Lakers could give Clarkson an offer like this, based on the $20.4MM max projection:
- Year 1 — $20,400,000
- Year 2 — $21,930,000
- Year 3 — $23,460,000
- Year 4 — $24,990,000
- Year 5 — $26,520,000
- Total — $117,300,000
Clarkson shouldn’t wait around for that sort of offer, since the Lakers have no incentive to give him a contract more than twice the value of what any other team could. It would behoove them to either offer him a deal in line with what another team could give or, as Eric Pincus of the Los Angeles Times argues, simply wait for him to sign an offer sheet with another team and match it. If the Lakers gave Clarkson a deal worth $56,893,260, the salaries — and the associated cap hits — would be spread out conventionally, with raises of no more than 7.5% from season to season. If the Lakers matched an offer sheet from another team, Clarkson’s salaries and cap hits would be back-loaded as in the first example above. That would perhaps be burdensome in years three or four, but having Clarkson at between $5MM and $6MM the next two seasons would represent a bargain that would give the Lakers added cap flexibility.
Because the first-year salary of the offer sheet doesn’t exceed the non-taxpayer mid-level exception, the Lakers could stay over the cap and use their mid-level exception to match it, even though that large a third-year raise wouldn’t typically be permitted when using the mid-level. If the Lakers chose not to match, the cap hits for Clarkson’s new team would be spread out in equal fourths of $56,893,260, even though he’d receive paychecks based on the back-loaded scale.
Of course, just because a club is given the opportunity to use the Arenas provision to keep its restricted free agent doesn’t mean it will necessarily have the means. Here are a few situations in which the Arenas provision wouldn’t help a team keep its restricted free agent:
- If the team only had the taxpayer mid-level exception or room exception available, it would be unable to match an offer sheet for a Non-Bird free agent if the starting salary exceeded the taxpayer mid-level or room exception amount.
- If the team used its mid-level exception on another player, it would be unable to match an offer sheet for a Non-Bird free agent. A team could use Early Bird rights to match if they have them, however.
- If the player has three years of NBA experience, the Arenas provision would not apply — only players with one or two years in the league are eligible.
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. An earlier version of this post appeared on May 9th, 2012, written by Luke Adams.
And-Ones: Warriors, Dawson, D-Will, Bulls
Luke Walton has helped the Warriors get off to 26-1 start in Steve Kerr’s absence, but as Ric Bucher of Bleacher Report suggests, it’s been a more difficult task than it might appear on the surface. “When an assistant becomes a head coach, players hate it,” said Andre Iguodala, who went on to praise the job Walton has done at finding a balance between acting as head and assistant coach. As we wait to see if the Warriors can extend their historic start against the Cavs tomorrow, let’s have a look at a few items from around the NBA.
- The Clippers have recalled Branden Dawson from the D-League, the team announced on its website. Dawson averaged 4.9 points across seven contests while on assignment with the Grand Rapids Drive.
- Tim Bontemps of the Washington Post summarizes Deron Williams’ disappointing tenure in Brooklyn. Williams was supposed to be the face of the franchise, but he had a difficult time staying healthy and his performance on the court suffered as a result. “I felt like I didn’t know if I was ever going to be healthy again,” Williams said to Bontemps. The Mavericks signed Williams to a two-year, $11MM deal this summer.
- Jimmy Butler’s comments directed toward Fred Hoiberg have some fans wondering if one of the two will be ousted from Chicago, but Sam Smith of Bulls.com writes in a mailbag column that he’s confident both members of the pair will still be with the Bulls next season.
Mavs Notes: Nowitzki, Carlisle, Williams, Famous
Dirk Nowitzki left the door open last month to playing beyond his existing contract, which runs through next season, and he more recently told Tim MacMahon of ESPNDallas.com that he values the idea of playing a 20th season with the Mavs, which would entail re-signing in 2017. Nowitzki has a player option worth about $8.692MM for next season and told USA Today’s Sam Amick in November that, “I’m going to definitely ride this contract out.”
“Yeah, I think 20 years is special, especially with one franchise,” Nowitzki said to MacMahon. “So that would mean I at least have to play one more [season after this contract expires], but I think that’s something I worry about later. I don’t want to look too far ahead because the end is near. I don’t want to look too far ahead.”
Nowitzki passed Shaquille O’Neal on Wednesday for sixth place on the NBA’s list of all-time scoring leaders. See more from Dallas:
- Mavs coach Rick Carlisle backed off Wednesday from comments he made Tuesday that suggested he’d push for roster changes if the team didn’t improve its effort, expressing his affection for the players and quipping, “I fly off half-cocked about every other day,” MacMahon observes in a separate piece. Owner Mark Cuban likes the roster and said to MacMahon that he doesn’t see a need for significant change, though he admitted inconsistent effort and energy have been problems. “Oh, it’s 100% about pressing buttons,” Cuban said about Carlisle’s Tuesday remarks. “The one thing you know about us, if we’re actually going to make a trade, nobody knows about it. And they were buttons that needed to be pressed, so I agree wholeheartedly with him.”
- Deron Williams wound up with the better end of the buyout that halted his Nets tenure, posits Andy Vasquez of The Record, who points to Brooklyn’s significant decline in offensive efficiency without the point guard and Williams’ contentment in Dallas. “I feel a lot better,” said Williams, who has a player option worth about $5.621MM for next season. “My mindset’s a lot better. I’m happy in Dallas, happy where I am right now, and enjoy playing with this team.”
- Jarrid Famous, who was with the Mavericks for the preseason, has signed with Yulon Luxgen in Taiwan, according to Sportando’s Orazio Cauchi. He had been playing with Fujian of China since shortly after Dallas waived his partially guaranteed contract prior to opening night.
Mavs Notes: Carlisle, Williams, Powell
Rick Carlisle was disheartened with the effort the Mavericks gave in Tuesday’s loss to the Raptors, and he threatened in the locker room and again in a postgame press conference to push for roster moves, as Tim MacMahon of ESPNDallas.com details. The Mavs, at 15-13, have for the most part played surprisingly well this season, but Carlisle’s message comes with the authority of a contract that runs through 2021/22 in the wake of the five-year, $35MM extension he signed last month.
“Look, if it’s going to be like that, these guys aren’t going to be Mavericks very long,” Carlisle said in his press conference. “I can promise you that.”
Several Mavs appeared surprised that Carlisle would take the sentiment public, MacMahon notes. It’s unclear whether Carlisle was suggesting that he’d try to talk the front office into midseason personnel changes or a roster shuffling in the summer, with only five Mavs in possession of guaranteed contracts for next season, as MacMahon points out. See more on Carlisle’s remarks amid the latest from Dallas:
- Carlisle praised a group of end-of-the-bench players who were on the floor late in the game, as Eddie Sefko of the Dallas Morning News relays, so it doesn’t appear that part of the roster is the object of the coach’s ire. In any case, the rant signals that the Mavericks believe they’re better than their already impressive record shows, Sefko contends.
- Deron Williams felt a pop when he strained his left hamstring Tuesday, so he’s unlikely to play tonight in what would otherwise be his return to Brooklyn, MacMahon writes in a separate piece. Williams said to MacMahon this weekend that he was sure Nets fans would boo him, but he praised the Nets organization and GM Billy King. Williams spoke earlier about the repercussions of having struggled while playing on the max contract he signed in 2012, but he told MacMahon that the lucrative pact wasn’t a major factor in his troubles, since he’d previously signed a max extension with the Jazz.
- The Raptors probably erred when they didn’t draft Dwight Powell last year, Sportsnet’s Michael Grange opines. Toronto took Bruno Caboclo and DeAndre Daniels ahead of Powell, an Ontario native who’s blossomed this season with the Mavericks.
And-Ones: Silver, Howard, Bradley
The controversial rules regarding intentional fouls will not be changed this season, NBA commissioner Adam Silver told Tim Bontemps of the Washington Post via email. Silver said he wouldn’t take action in midseason to prevent teams from employing “Hack-A” strategies, in which poor free throw shooters are fouled before the two-minute mark of a quarter. But the issue will be revisited when the competition committee meets in July, Silver added to Bontemps, who also conducted a phone interview with the commissioner and touched on a variety of topics.
In other news around the league:
- The Mavericks shouldn’t even consider a trade for Dwight Howard, Eddie Sefko of the Dallas Morning News opines. Howard’s drama queen act and reputation as a coach killer isn’t worth the risk of bringing him aboard, Sefko continues. The Rockets center is also getting more brittle by the season, so the Mavs should not waste their cap space and trade assets on him, Sefko concludes.
- Celtics shooting guard Avery Bradley is currently 20th in steals at 1.6 per game but Pistons coach Stan Van Gundy says that doesn’t measure Bradley’s true impact as a defender. The Celtics force a league-best 17.9 turnovers per game and Van Gundy credits Bradley for making that happen. “It’s a very, very aggressive defensive team,” Van Gundy said. “Bradley and [Jae] Crowder in particular are really aggressive defenders and when they have [Marcus] Smart, that gives them another guy that can really get after you on the defensive end of the floor. Bradley is one of the best pressure defenders in the league and sort of spearheads the whole thing.”
- Bulls shooting guard Jimmy Butler does not regret the critical comments he made about first-year coach Fred Hoiberg, John Jackson of the Associated Press reports. Butler ripped Hoiberg for being too soft on his players over the weekend, then met with his coach to discuss his concerns. Butler believes he needs to be more of a team leader, Jackson adds. “[I was] a little frustrated after a loss, yeah, but then again, I put a lot of it on myself now because I have to lead better,” he said. Center Pau Gasol said he doesn’t mind Butler’s comments, K.C. Johnson of the Chicago Tribune tweets. “I think it’s good that certain guys want to take ownership and say, ‘Hey, let’s go,’” he told Johnson.
Atlantic Notes: Williams, Silver, Lopez, Caboclo
Deron Williams thought about quitting the game during his struggles with the Nets, as he tells Michael Lee of Yahoo Sports. The 31-year-old isn’t concerned about the idea that he couldn’t hack it in New York and wishes his time with the team had gone better so that people didn’t feel as though he was “just stealing money,” as Lee details, with Williams once again saying that he’s pleased to be with the Mavericks now.
“It took a lot out of me, man, those three years [after re-signing with the Nets for the max in 2012]. Some of the hardest in my life,” Williams said. “Made me question if I even wanted to play basketball when I was done with that contract.”
See more from the Atlantic Division:
- Commissioner Adam Silver admits that he’s not a fan of the Sixers‘ rebuilding strategy of the past two and a half seasons but said that it doesn’t mean it’s not acceptable under league rules, and he once more denied that Philly’s hiring of Jerry Colangelo happened because of pressure from owners of other teams. Silver made his comments on FiveThirtyEight’s “Hot Takedown” podcast.
- The Knicks are thinking about removing Robin Lopez, who signed a four-year deal worth more than $54MM in the offseason, from the starting lineup in favor of Lance Thomas, who inked for less than $1.637MM on a one-year deal, according to Marc Berman of the New York Post. Thomas has a reputation as coach Derek Fisher‘s “favorite Knick,” Berman writes, and he showed up this season with an improved outside shot and 15 added pounds of muscle, as the Post scribe details, suggesting it’ll play to his benefit when he hits free agency again this summer.
- The Raptors have assigned Bruno Caboclo and Norman Powell to the D-League, the team announced. Caboclo has seen extensive D-League action this season, while Powell is making his second trip to Raptors 905, just two days after his first. Toronto recalled Powell, Caboclo and Anthony Bennett from the D-League on Sunday afternoon (Twitter link).
And-Ones: Millsap, Lin, D-League
The Magic offered Paul Millsap a max contract on July 1st and the power forward told Josh Robbins of the Orlando Sentinel that Orlando’s pitch was impressive before he ultimately decided to re-sign with the Hawks.
“I was their first priority, and everything about their team was looking good at the time,” Millsap told Robbins. “It intrigued me. The presentation was great.”
Millsap, per Robbins, chose to stay in Atlanta, however, because he grew a fondness for the area and he got used to calling it home. Millsap added that his teammates and the Hawks’ coaching staff had a lot to do with his decision to re-sign because he believes Atlanta has “built something special thus far.”
Here’s more from around the basketball world:
- The non-guaranteed minimum salary of recent Wizards signee Ryan Hollins becomes fully guaranteed if the team doesn’t waive him by the end of December 27th, reports Eric Pincus of Basketball Insiders in a roundup of guarantee dates. Pincus also reveals that Bryce Cotton, who signed with the Suns last month, is on a non-guaranteed contract for the minimum salary that covers just this season and wouldn’t become guaranteed until next month’s leaguewide guarantee date.
- Hawks big man Mike Muscala, previously thought to have a $473,638 partial guarantee on his $947,276 minimum salary, has no guarantee at all, Pincus shows in the same post and on Twitter.
- Jeremy Lin, who signed a two-year, $4.4MM contract with the Hornets in July, said his new team is a very good fit for his style and strengths, Jonathan Feigen of the Houston Chronicle relays.
- The Mavs recalled Justin Anderson, Jeremy Evans and Salah Mejri from their D-League affiliate, the team announced in an emailed press release. Evans has appeared in 19 games with the Mavs while Anderson has played in 17 and Mejri has seen action in five.
- The Thunder assigned Josh Huestis to the D-League, the team announced. Huestis has appeared in nine games this season for the Oklahoma City Blue, the Thunder’s D-League affiliate.
- The Celtics recalled Terry Rozier and Jordan Mickey from their D-League affiliate, the team announced in an emailed press release.
Western Notes: Kings, Morris, Knight
Coach George Karl believes the Kings’ lack of professionalism and effort are major reasons why the team isn’t winning this season, Jason Jones of The Sacramento Bee writes. “If we get a more serious, play-hard mentality, a more serious defensive mentality, I’ll take all the blame in the world,” Karl said. “You can blame me all night long. But when I’m managing attitude, when I’m managing approach, when I’m managing professionalism then yeah, my X’s and O’s aren’t good, either.”
The Kings attempted to add professionalism during the offseason, Jones adds, when they brought in 10 new players, many of whom are veterans who have been part of winning situations. Yet, changing habits takes time and the team understands that.
“That’s part of the process of trying to change the culture with winning ways, winning habits, and we’ve got some guys who can help do that,” Rajon Rondo said. “Marco [Belinelli] is a winner; [Caron Butler] is one. We’ve got enough strong personalities to help change the culture. It’s just a matter of time if the team stays consistent with it.”
- Eric Saar of Basketball Insiders looks at potential Markieff Morris trades, and he believes a swap with the Pelicans for Ryan Anderson is the best-case scenario for the Suns. Anderson will be a free agent at the end of the season and Saar speculates that he will command near-maximum salary on the open market, which is something the Pelicans may not be inclined to give him.
- Paul Coro of the Arizona Republic examines Brandon Knight‘s play since he signed his five year, $70MM contract during the offseason. The Suns were 4-7 last year with Knight in the lineup and they are 10-18 to start this season.
- The Mavericks assigned Jeremy Evans to their D-League affiliate, the Texas Legends, according to a team press release. Evans is averaging only 1.9 points and 1.7 rebounds in 7.8 minutes per game for Dallas this season.
Southwest Notes: Howard, Leonard, McGee
Though he acknowledges that center Dwight Howard is unhappy with the current state of the Rockets, interim coach J.B. Bickerstaff refutes any notion that Howard is a disruptive influence in the locker room, Sam Amick of USA Today writes. “Since I’ve taken over [for fired coach Kevin McHale], I’ve tried to spend a lot of time with Dwight,” Bickerstaff told Amick. “And Dwight’s mind, his heart, are in the right place. He’s about the right things. Dwight wants to win. He wants to play the right way. He wants to contribute to winning, obviously at a high level. So for me, that’s all I can go on. I trust Dwight. He hasn’t misled me at any point since I’ve known him, since I’ve been working with him. So I can’t hang any value to what other people are saying.”
“I know he’s frustrated, I’m sure,” Bickerstaff continued. “[But] I don’t see him as a guy who’s looking to take the easy way out. … He has been there to perform through all of it. He’s been hurt. He’s been battling the knees, the back, all those things, and never once has he let on that he didn’t want to be a part of it or he was going to take the easy way out. I think he needs to have a bigger role, but I think it’s a combination of how we get him to that point. I’ve got to do a better job of getting him the ball in positions where he can score.”
Here’s more from the Southwest Division:
- Spurs small forward Kawhi Leonard isn’t surprised by his ascent to NBA stardom, because he knows just how hard he worked to get his game to its current level, Michael C. Wright of ESPN.com writes. “I worked hard,” Leonard said. “It’s my fifth year. It’s not just about what I did this summer, it’s about the experience I had under my belt for the past four years. It just comes with a mindset. There are a lot of guys that stay in the gym and don’t get any better. It’s about being smart, figuring out your weaknesses and not being scared to do it in the games.“
- Despite not seeing much action for the Mavericks as he makes his return from injury, center JaVale McGee remains an important piece for the team given its lack of rim protecting big men, Eddie Sefko of The Dallas Morning News writes. “He’s not 100% of the player he was before the injury just because he hasn’t had a training camp and he hasn’t had a significant amount of time since being cleared,” coach Rick Carlisle said. “Matchups are part of it with everybody playing smaller. It’s just a little trickier getting him minutes.“
And-Ones: Holmes, D-League, Butler
Kings coach George Karl says that he had spoken with small forward Caron Butler weeks ago about his decreased playing time, and he cited the solid play of Omri Casspi as the primary reason for the change, Jason Jones of the Sacramento Bee relays in a series of tweets. The coach thinks of Butler as insurance at small forward, and he is aware that the veteran has spoken to team executive Vlade Divac about the situation, Jones notes. Jones also relays that all indications still point to the team trading Butler, as was reported by Marc Stein of ESPN.com earlier this week.
Here’s more from around the league:
- Lakers camp cut Jonathan Holmes underwent surgery today to repair a torn labrum and he is expected to require approximately five months of recovery time, Eric Pincus of Basketball Insiders relays in a series of tweets. Holmes had suffered a dislocated right shoulder during the preseason and as a result Los Angeles will be on the hook for his entire salary of $525,093 for the 2015/16 campaign, not just his partial guarantee of $100K, Pincus notes. The combo forward is expected to be ready for action in time for summer league play, the Basketball Insiders scribe adds.
- Front office officials have been unusually reluctant to talk trades recently because so many teams are so close together in the standings, giving rise to playoff hopes around the league, an NBA GM said to Marc J. Spears of Yahoo Sports (Twitter link).
- The Mavericks have reassigned center Salah Mejri and swingman Justin Anderson to the Texas Legends, their D-League affiliate, Earl K. Sneed of Mavs.com relays (on Twitter). This will be the fourth jaunt to the D-League on the season for both players.