Twisted amnesty clause brings problems

The Bulls are among the future contenders who will have no use for the proposed amnesty clause. (AP)

I was aghast last Friday when ESPN.com reported that the amnesty clause in the next collective bargaining agreement might be available for the full life of the deal and applicable to contracts teams hadn’t even signed yet. The point of an amnesty clause, which allows teams to cut one player and have his salary vanish from their salary cap number, is to help teams adjust to a harsh new CBA for which they could not have prepared. This is why it is called an “amnesty” clause and not “you get a chance to cut this one guy for no reason” clause. With a shift from a soft luxury-tax system to a hard cap of $55 million, teams will need amnesty — forgiveness — in order to function immediately within that new system.

But as we approach the finishing line of the collective bargaining talks, it’s clear that the new system will not be so new, and that there will be a one-year grace period before all the changes take effect. The luxury tax will be more punitive, but it will probably land about where it was last season — in the $70 million range — and 80 percent of the league already approached the tax as if it were a hard cap. Only three or four teams blow past the cap by large margins every season; those are the teams that need “amnesty” in order to adjust to the new CBA reality, but even they could manage given a one-year phase-in period and the so-called “stretch exception,” which will make it easier to waive players.

In other words: There is not much need for “amnesty” in the traditional sense. And yet, the owners were pushing Friday for a broadened amnesty clause they could use to wriggle out of a theoretical deal signed years down the road. This is the total perversion of “amnesty,” a concept that even it its purest form presented fairness issues for teams who worked for years to clean their cap sheets.

So I was relieved over the weekend when I learned, via Howard Beck of The New York Times and SI.com’s Sam Amick, that the owners’ push for an amnesty clause applicable to future contracts had failed. The clause as proposed now would still be available for the length of the CBA, but teams would only be able to use it on guys under contract as of July 1, 2011. That still perverts the notion of amnesty, but it at least it would not save the owners from a future mistake — after a prolonged lockout in which the owners shut down the league in part to prevent themselves from even making such mistakes.

But then I started thinking about the Bulls and the Thunder, two championship contenders with no current use for amnesty. The Bulls, with about $64 million in salary on the books for 2011-12, will almost certainly be over the cap, and their payroll will go up once Derrick Rose’s max-level extension starts up next season; in 2013-14, they will have something like $57 million committed to just four players — Carlos Boozer, Joakim Noah, Luol Deng and Rose — meaning it will be hard for them to build a roster without going into the more punitive luxury tax. As I’ve reported before, paying that tax might also mean losing the mid-level exception — a key means through which capped-out teams filled out their rotation.

The Thunder will come in just below last season’s cap number if they bring back Daequan Cook at the level of his qualifying offer, and Russell Westbrook is a due a massive extension that will kick in for 2012-13. Extensions for Serge Ibaka and James Harden would begin the next season. Even making conservative assumptions, it is hard to imagine the Thunder ducking the (more punitive) luxury tax if they manage to keep all of those guys — a scenario that might not work, given the team’s market constraints.

In short, we might have two legit title contenders facing huge future tax bills and the possible forfeiting of the mid-level exception when those tax payments start. The Bulls are primed to upgrade on the wing this summer, and they’ll have to sign that player via the mid-level exception while they still can. The Thunder have a near-full roster for this season, but they will be an attractive destination for ring-chasing veterans in July 2012.

If the league pushed through an amnesty clause applicable to future contracts, each of these clubs could have beefed up by signing a veteran rotation cog and cut that player later via amnesty to avoid some major tax penalties. That would be an abuse of amnesty, you say. They can still cut such players and soften the cap/tax hit via the stretch exception, you say. And if you allow these lucky/smart clubs to use a future amnesty clause, you’ve got to allow it for the rest of the league — the potential abusers.

You’re right, of course. But I’m trying to think of a way these teams might benefit from the already-perverted amnesty deal, and I’m not finding anything. One idea floating around the league: What if teams could trade their amnesty rights for draft picks, players or cash? I get the feeling teams will not be allowed to manipulate amnesty in this way, but it’s an interesting idea for an imperfect situation.