Contracts

[Laimbeer40]

Contracts
Contracts are always listed in terms of flat salary and the last season of such contract.  For example, $10m (2020) is a contract the pays $10m each season through the 2020 season.

All contracts must be no longer than five years.  Also, for a given salary, all contacts have term limits (max years contract can be per the salary) as provided below.

Salary range, Maximum Years
$1m or less = 2 years
$1.1m - $4.9m = 3 years
$5.0m - $9.9mm = 4 years
$10m or higher = 5 years (max years is 5) 

Releasing Players Under Contract (New for 2022)
You may release a player at any time. However releasing a player under contract does come with a penalty as outlined below...

Player's yearly salary/Cap penalty
$1.0m or less = free drop!!
$1.1m - $2.0m = 50% penalty each season
$2.1m and higher = 75/50/25 penalty (1st season = 75% cap hit, 2nd season = 50% cap hit, All additional seasons = 25% cap hit)


Example - Jakeem Grant is making $12.0m for 4 years and the owner decides to release him.
Yr 1 = $9.0m cap hit
Yr 2 = $6.0m cap hit
Yr 3 = $3.0m cap hit
Yr 4 = $3.0m cap hit

-If a team releases a player, that team may not re-sign said player for 30 days.


Contract Buyout
For a contract buyout, a GM can accelerate any cap penalties to the current season.  This will allow a GM to not accrue any cap hits for any future years of a forfeited contract. No buyouts allowed once playoffs start. The buyout can only be done at the time of the initial release thus you can't decide to accelerate the penalties a month later.

Example: Using the Jakeem Grant example above. The total amount of cap penalties would be $21.0m. If the owner has enough cap space to afford to pay that $21.0m in the current season, then they could choose to buyout this contract.

If money has been paid on a player's salary via a cash exchange in a trade, then that salary adjustment would be included for each season. So if Jakeem had $10m paid on his 4th year by another team, then that amount could only cover the $3.0m cap hit for the 4th year. This would reduce the buyout from $21.0m to $18.0m.

Restructuring Contracts
Restructuring allows annual salary to be reduced if player's market value (extension price) is less than or equal to half that of what he is paid.  Total reduction in salary is converted into a guaranteed signing bonus during the current (or upcoming for off-season) year.  Annual salary after such restructuring must be over $4m.  Restructuring of contracts is not allowed during the period after the trade deadline and before the off-season.  Here is an example using hypothetical rankings and market values with a real contract.
Andre Johnson, $14.6m (2020)

Let's say his market value is $5.5m, and the team owning him at the time has plenty of cap space. The restructuring says that his new annual salary is $5.5m. However, the leftover money now front-loaded to him in the form of a bonus (100% guaranteed). The signing bonus is then a whopping $36.4m.

Now, let's say the team doesn't have that cap room, but they want to restructure the contract a little bit. Well, that example is the extreme... the team can play the middle ground and reduce the annual salary to $10.5m per say for a signing bonus of $15m.
Such restructuring of contracts is not allowed from August 1st to the end of the playoffs to prevent teams from abusing the restructuring to make it count for an additional season.

[Laimbeer40]

Looks like when I updated the rules I left out the minimum yearly salary. It is still $0.4m

[Laimbeer40]

Contracts
Contracts are always listed in terms of flat salary and the last season of such contract.��For example, $10m (2020) is a contract the pays $10m each season through the 2020 season.

All contracts must be no longer than five years.��Also, for a given salary, all contacts have term limits (max years contract can be per the salary) as provided below.

Salary range, Maximum Years
$1m or less = 2 years
$1.1m - $4.9m = 3 years
$5.0m - $9.9mm = 4 years
$10m or higher = 5 years (max years is 5)�

Releasing Players Under Contract (New for 2022)
You may release a player�at any time. However releasing a player under contract does come with a penalty as outlined below...

Player's yearly salary/Cap penalty
$1.0m or less = free drop!!
$1.1m - $2.0m = 50% penalty each season
$2.1m and higher = 75/50/25 penalty (1st season = 75% cap hit, 2nd season = 50% cap hit, All additional seasons = 25% cap hit)


Example - Jakeem Grant is making $12.0m for 4 years and the owner decides to release him.
Yr 1 = $9.0m cap hit
Yr 2 = $6.0m cap hit
Yr 3 = $3.0m cap hit
Yr 4 = $3.0m cap hit

-If a team releases a player, that team may not re-sign said player for 30 days.


Contract Buyout
For a contract buyout, a GM can accelerate any cap penalties to the�current season.��This will allow a GM to not accrue any cap hits for any future years of a forfeited contract.�No buyouts allowed once playoffs start. The buyout can only be done at the time of the initial release thus you can't decide to accelerate the penalties a month later.

Example: Using the Jakeem Grant example above. The total amount of cap penalties would be $21.0m. If the owner has enough cap space to afford to pay that $21.0m in the current season, then they could choose to buyout this contract.

If money has been paid on a player's salary via a cash exchange in a trade, then that salary adjustment would be included for each season. So if Jakeem had $10m paid on his 4th year by another team, then that amount could only cover the $3.0m cap hit for the 4th year. This would reduce the buyout from $21.0m to $18.0m.