Cap Holds

Cap Holds, and how they apply to youA cap hold are “placeholders” for players the team is expected to sign in the future, or for contracts of players who have been waived, but whose contract extends into the current year or beyond. It is there so teams cannot abuse Bird Rights or exceptions to ‘double-dip’ in free agency. There are many different kinds of cap holds.

How Do Cap Holds Impact my spending money?: 
Your money available without exceptions to sign free agents is equal to the amount of money you have under the salary cap. The salary cap is separate from the Hard-Cap, and the Luxury Tax Line. In order to find out how much money you have below the cap, you add up the active salary (players actually under contract), then you add in your active cap holds. Some cap holds are able to be renounced (more on that below), some aren’t.

1st round pick hold: Since first round draft picks have a predetermined guaranteed salary, the team who holds the rights to that pick are assessed a hold. This also applies to players who were picked in the first round of previous drafts whose rights are held by DKC teams. Some examples: Nikola Mirotic, Lucas Nogueira, both playing overseas. These cap holds that apply to players who will not be signed during the current off-season or season (like a player being stashed in Europe) will only apply during the off-season.

Players who have Bird Rights, Early Bird Rights, etc: Some players, because of the duration of their previous service, are afforded a special status that allows teams to resign them to contracts that put them over the salary cap. Example: Kirk Hinrich, expiring summer 2014, will have a cap hold of $5,276.700, due to the Early-Bird rights afforded by his previous 2-yr contract.

Restricted Free Agents (RFA’s): RFA’s will have a cap hold of either 200% or 250% of their previous salary. This will change once bidding starts on the RFA, and after that his cap hold will be the highest single season salary amount bid, or 250% of his previous salary, whichever is greater. 

Players Who Were Waived, But Who Continue To Count Against Cap: If a player was waived in the previous season, but had guaranteed money extending beyond that, depending on how he was waived, some or all of that will count against your team’s cap number in the form of a cap hold. This cannot be renounced, amnestied, or traded away. You’re stuck with it, dummy!

Players ‘Won’ But Not Signed: Once a destination is assigned in free agency and a team ‘wins’ a player, a cap hold in the amount the team agreed to offer the player is immediately applied to that teams’ payroll.

How Cap Hold Amounts Are Determined: Cap hold amounts will be predetermined for you before the season. They will be assembled using (in order of priority):

1) The data provided from ShamSports.com

-This would be the only source if we could have our way, but unfortunately for any contract that occurred only in the DKC timeline, this is useless. We can only use it for players whose contracts in the DKC mirror those in real life.

2) The parameters set forth by cbafaq.com (http://www.cbafaq.com/salarycap.htm#Q38)

-There are some streamlining addendums made. They will be noted as made.

Getting rid of Cap Holds: For players whose contracts have expired, but have cap holds because of earned Bird, Early-Bird, or Non-Bird rights, if a team is not going to use these rights to resign the player they can renounce him. This means the team forfeits all rights they had to the player,and while they cannot resign him using any Bird, Early-Bird, or Non-Bird rights, they can sign him as they would any other FA from any other team.

Sign And Trades And Renounced FA’s: A team MAY ship OUT a player via sign and trade after renouncing his rights.

Timing Of Renouncing Players, And How It Affects Free Agency: Sometimes, a team needs to get rid of a cap hold to sign a free agent they want. As you know, to get rid of a cap hold, a team renounces a player, along with any rights they had to him. In the NBA, the actual team would renounce the player they need to for the guy they’re making room for once the guy and the team reach a verbal agreement. Everything before that is deemed ‘negotiations’, and has no cap ramifications.

To address this, in the DKC, if you’re making a bid on a free agent, and in order to make the bid legal, you must renounce a player, you may wait to renounce the player until you actually win the bid. You MUST however state which player you will renounce when you make the bid, and if you win the bid, even if you do not end up signing the player you won, the player you stated will be renounced is renounced.

Example: 

The Syracuse Nationals have 7 players under contract for 2014-2015, totaling $25 million dollars in salary for the coming season. They have 2  2014 1st round picks, a cap hold totaling $4.2 million dollars. They had 5 players expire the previous season. They’ll be called players A thru E, and they have a total cap hold of $35 million combined.Player A has a cap hold of $800k

Player B has a cap hold of $6.75 million

Player C had a cap hold of $12 million

Player D has a cap hold of 5.45 million

Player E has a cap hold of $10 million

So the Nationals, between those 5 players, along with the 7 players under contract mentioned above, along with the draft picks for 2014, come to a total cap figure of $64.2 million, which would be roughly $6 million over the salary cap.

But let’s say the Nationals value a unrestricted free agent, call him ‘Player Z’, that summer. They want to attempt to sign him. They know they can sign him if they renounce some free agents.

However they don’t want to renounce all their free agents if they don’t win the right to sign Player Z.

So what they do is figure out how much money they’re willing to offer Player Z, and they construct a bid.

Let’s say the Nationals are willing to pay Player Z a 4 year, 36 million dollar contract at $8 million dollars flat each year. So they need to construct a bid they will put them $8 million under the salary cap.

They decide that they’ll renounce Player B and Player E (holds combined for $16.75 million) if they win their bid on Player Z. Renouncing B and E puts the Nationals with a cap figure of around $47.45 million, which easily clears the space to offer Player Z a contract.

So this can go one of two ways for the Nationals and Players B and E. IF they win the right to offer Player Z a contract, Players B and E are immediately renounced, and a cap hold of $8 million is applied to the National’s payroll. IF they do not win the right to offer Player Z a contract, players B and E go on as before, as cap holds, and the Nationals retain their rights.