The circumstances surrounding Lamar Odom's trade to the Mavericks… (Larry W. Smith / EPA )
It's Christmastime in the NBA. What did the amnesty clause bring your team?
The Clippers got Chauncey Billups, adding a former All-Star guard to their improving-by-the-minute roster for the bargain-bin price of about $2 million. Gilbert Arenas and Baron Davis are other waived players who could be had for little more than a cup of eggnog, at least by NBA salary standards.
The NBA's new collective bargaining agreement has produced other peculiar-sounding gifts that could keep on giving into 2012.
The Lakers have at their disposal something called a traded-player exception, worth $8.9 million, that they received for trading Lamar Odom to the Dallas Mavericks. This exception is basically a credit by which teams over the salary cap can acquire additional salary-cap space to complete a future deal within one year.
Meanwhile, Miami used its so-called mini mid-level exception to sign veteran forward Shane Battier, whom the Heat will unveil in its Christmas opener against defending champion Dallas.
Amnesty clauses, trade exceptions and mini mid-level exceptions might seem as perplexing as a David Lynch movie to those not schooled in the minutiae of NBA labor rules, but they have been the driving forces behind much of the player movement since the lockout ended.
The amnesty clause allows teams to erase the contract of one player on the roster for salary-cap and luxury-tax purposes. The team still must pay that player's salary, but it no longer counts toward the team's luxury-tax and salary-cap bills. The New York Knicks used this provision to waive Billups so that they could free up salary space to sign free-agent center Tyson Chandler.
Players released under the amnesty clause are available at first only to teams under the salary cap in a secret bidding process; this prevents heavy spenders such as the Lakers from filling their rosters with underpriced veterans. The Clippers won Billups' services because their offer of slightly more than $2 million was the highest bid; the Knicks will pay the balance of his $14.2-million contract for this season.
However, if no team under the salary cap bids for an amnesty player, he then becomes a free agent.
"The whole reason they put in the secondary waiver process [the amnesty provision] was to keep every player from packing his bags to Miami," said Larry Coon, an independent NBA salary cap expert who works as an IT director at UC Irvine. "This gives the teams under the cap a shot and that's how the Clippers got Chauncey."
Other teams dumped players via the amnesty provision merely to rid themselves of cumbersome contracts. The Orlando Magic waived Arenas because he was owed $62 million over the next three years. However, no team bid on Arenas, who's been slowed by knee surgeries, so he is a free agent.
The Lakers did not utilize the amnesty clause this year, but they can do so once before any season during the current labor agreement. They are believed to be considering using the provision to waive Metta World Peace before more prohibitive luxury taxes kick in during the 2013-14 season.
One creation of the new collective bargaining agreement did help shape the Lakers' roster: the mini mid-level exception. The Lakers used this tool to sign forward Josh McRoberts to a two-year, $6.2-million deal, bolstering their frontcourt in the wake of Odom's departure.
In years past, the Lakers might have been able to attract a higher-end player through the traditional mid-level exception, and offer a five-year, $32-million contract, but that was taken away from teams over the salary cap in the new labor deal.
"This is one of those playing field-leveling mechanisms," Coon said. "It gives a better opportunity to the smaller-market teams."
The Lakers have until Dec. 10, 2012, to use the exception they gained through the Odom trade that is worth his $8.9 million salary for the 2011-12 season. This exception can also help the Lakers match up salaries to complete a deal.
For instance, if the Lakers want to acquire players whose combined salaries significantly exceeded Odom's salary, the trade exception could bridge the gap, provided the difference did not surpass $8.9 million.
Exceptions can go unused. The Lakers allowed to expire a trade exception of about $5 million that they gained as part of last season's Sasha Vujacic trade.
Trade exceptions aren't new, but they have taken on added significance with the stiffer luxury-tax penalties looming.
If the Lakers' $87-million payroll remains intact, they will pay $17 million in luxury taxes this season as part of the league's dollar-for-dollar penalty for being that far over the tax threshold; the same payroll would cost them more than twice as much in taxes two seasons from now.
Lakers General Manager Mitch Kupchak said this week that financial considerations are increasingly influencing the way teams construct their rosters. While Kupchak said Odom was traded solely because he demanded to leave after being packaged in the Lakers' trade for Chris Paul that was vetoed by the NBA, Kupchak acknowledged there was a financial upside to the deal.
"There was an opportunity for us to create some flexibility to hopefully add players going forward around those primo players," Kupchak said, referring to Kobe Bryant, Pau Gasol and Andrew Bynum.
With their roster depleted by the departures of Odom and Shannon Brown, the Lakers would consider any meaningful additions another kind of exception during what has been a gloomy holiday season: a welcome one.