View Full Version : Why Michael Finley will probably sign a one year contract this Summer

03-12-2001, 06:04 PM
The following is an excerpt from a RealGM analysis of the contract situations of the major free agents of this Summer. I thought y'all might find it interesting:

...Michael Finley

Finley has the most interesting situation. That's because he is finishing his sixth season in the league this year and has a two-year option on the contract he signed under the old CBA. Players who have completed six seasons in the NBA are eligible to start a new contract at a maximum of 25% of the team's salary cap, while players who have played seven seasons can start at 30% of the cap value. Here are Finley's choices if he stays in Dallas:

1. If he stays with his current contract, he gets $9.6M next season and $10.8M in 2002/03. Then in 2003/04 he would re-sign at the maximum for a player who has played at least seven seasons, which (assuming an 8% annual increase in league revenues) would be about $14.94M. Subsequently he would get an annual increase of 12.5% ($1.87M).
2. He can opt out of his contract, and re-sign as a free agent for the maximum seven seasons. By re-signing for the maximum for a player who has played six seasons he would start at $10.68M next season and get his annual increase of 12.5% ($1.33M).
3. He can re-sign as a free agent for one season, and then sign again as a free agent prior to 2002/03. The reason for this approach is that he signs for 25% of the team's cap ($10.68M) in 2001/02, then signs a new contract at 30% of the team's salary cap (around $13.83M) prior to the 2002/03 season. Subsequently, he gets the annual increase of 12.5% ($1.73M).
Here's the total he would get for each of the above three options. All options are for the seven seasons starting in 2001/02:

Option 1 = $113.78M
Option 2 = $102.75M
Option 3 = $119.59M

Now, he could sign with another team as a free agent instead of signing with Dallas. If he does, the annual increases for each of these options is 10% of the base salary rather than 12.5% of base salary.

If I'm his agent, it's pretty obvious that Option 3 is the best bet. Maybe an insurance policy against serious injury with Lloyd's of London would be a good idea as well.

How far does a player want to push this issue of getting to the next step up for the starting year of a contract? For example, after three seasons in the league

Tim Duncan signed his free agent contract last summer for three years plus an option year. This positions him to have the opportunity to wait the extra season and sign for 30% of the team salary cap in 2004.

On the other hand, Grant Hill had completed six seasons but chose to sign a seven-year contract, including an early termination option after five seasons. This means in 2005 - at the end of his 11th season - he can opt out and re-sign at 35% of a team's salary cap. He's currently scheduled to receive $15.7 million in 2005/06, but if league revenues increase by at least eight percent each of the next five seasons he is eligible for $19.86M that year.