Salary Central

Salaries & Sources

Salary information is rarely, if ever, “officially” published, but there are several sites that provide very reliable information. Shamsports.com is the most reliable, but Hoopshype, DraftExpress, and the ESPN Trade Machine also provide reasonable information.

Here is a summary of the Pacers’ Payroll over the next few years.  You should head over to Sham’s Pacers page to see Indy’s current detailed payroll by player.

Updated 1/16/2012

Contract Notes

Jeff Foster
Re-signed a one-year contract in December 2011.

Because Foster signed a one-year contract and will have Bird rights at the end of it, he has the right to veto any trade he is in. This is true even though he was renounced before he re-signed.

Danny Granger
Signed a five-year, $60 million extension in October 2008. Contract contains performance bonuses (of about $4 million) currently listed as unlikely.

Tyler Hansbrough
Drafted 13th overall in 2009. Signed to rookie salary scale contract for that year, although it has an unusual stipulation in it. The rookie scale allows for players to sign for as much as 120% of their slotted amounts or for as little at 80%. With all but the rarest exceptions, players sign for the full 120%. Hansbrough is no exception, as he has signed for the maximum. In each of the four seasons of his contract, however, only 80% is guaranteed.

Dahntay Jones
Signed a four-year, $10.6 million contract in July 2009.

George Hill
Drafted 26th overall in 2008. Signed to rookie salary scale contract for that year. Signed 120% of the rookie scale in first two years, then 80% in year three.

Since this 80% figure ($771,400) was less than the minimum salary amount that year ($854,389), the league took the decision to use the minimum salary amount instead, and thus the fourth year and qualifying offer amounts are calculated as a percentage of that, rather than the $771,440.

Lance Stephenson
Signed a four-year, $3,360,000 contract in July, 2010.

Third year is fully unguaranteed, becoming fully guaranteed if not waived on or before July 15, 2012. Final year is full unguaranteed, becoming fully guaranteed if not waived on or before July, 15, 2013.

Contract contains $75,000 in annual performance incentives currently listed as unlikely.

(Source:  Shamsports.com)

Exceptions Available for the Pacers

Because the Pacers are under the Salary Cap, they must use their available cap space to sign any players. However, the new CBA does allow for one exception if they use up all their current space.

MLE for Room Teams ($2.5 million)
A new Exception is now available for teams that use Cap room (and therefore forfeit their Non-Taxpayer Mid-Level, Taxpayer Mid-Level, and Bi-Annual Exceptions). The exception allows a team using Cap room to sign one or more free agents to a contract with a total first year salary up to $2.5 million for 2011-12 (the exception amount grows 3% annually thereafter) and up to 2 years in length.

MPE

A team can sign a player to a Minimum Player’s contract at any time, even if they are over the cap. The amount of the MPE is dependent on the player’s years of experience. In order to prevent older players from being shut out due to higher minimums, the NBA reimburses the difference between minimum contracts for more experienced players and that of a player with two years of NBA experience. The Pacers have not used any of these this season, but have used them in the past for players such as Luther Head, Kareem Rush, Andre Owens and Stephen Graham.

CBA Basics

Salary Cap & Luxury Tax
The NBA operates under a “soft” salary cap system. This puts a nominal limit on how much money teams can spend for their players, but provides for “exceptions” that allow teams to exceed the salary cap. The 2005 Collective Bargaining Agreement (CBA) added a second threshold, called the “Luxury Tax Threshold.”

The 2011 CBA kept both of these, but adjusted their levels. The salary cap will be established each year at 44.74% of projected Basketball Related Income (BRI), less projected benefits, divided by 30. However, the salary cap for 2011-12 and 2012-13 are guaranteed to not go below $58.044 million. In the Pacer summary above, I have projected future caps based on the 2012-13 season being 4.5% above the 2010-11 actual (of $3.817 Billion), then growing at 4.5% after that.

The Tax level will be established each year at 53.51% of BRI, less projected benefits, divided by 30. Like the salary cap, it is guaranteed not to drop below the 2010-11 Tax Threshold of $70.307 million in the years 2011-12 and 2012-13.

The new CBA also changed the tax structure to an escalating scale as follows:

•  First $5 million – $1.50 for $1
• $5 million to $10 million – $1.75 for $1
• $10 million to $15 million – $2.50 for $1
• $15 million to $20 million – $3.25 for $1
• Rates continue to increase above that at $0.50 for every incremental $5 million.

Additionally, there is a “repeater” tax structure. Tax rates for teams that are taxpayers in at least four out of any five years (starting in 2011-12) increase by $1.00 at each increment (for example, a repeater team salary $5M-$10M above the Tax level would pay $2.75 for $1 instead of $1.75 for $1).

In the 2005 CBA, teams under the tax would receive 1/3oth of the taxes collected. However, the new CBA only allows up to 50% of the tax payments to be distributed exclusively to non-taxpayers. This season, 100% of tax payments will be used as a funding source for the league’s new revenue sharing plan – of which I have no details. Starting in 2012-13, 50% of the tax payments will be used to fund the new revenue sharing plan, and the remaining 50% will be distributed in equal shares to non-taxpayers.

Most teams operate above the salary cap, and many operated above the luxury tax. The Pacers, for all intents and purposes, will treat the luxury tax threshold as a “hard” cap, meaning they will do virtually everything in their power to avoid going over it.

Detailed CBA Questions

We will do our best to outline and explain specific issues as they arise, and we will gladly field any questions you have to the best of our ability. Send emails to 8pts9secs@gmail.com

In the meantime, Larry Coon’s CBA FAQ is the best, most exhaustive resource out there.