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The Downbeat #1672: The Weird Lyles Contract Situation

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The reason behind the Trey Lyles contract dispute (rhymes with Lennis Mindsey).

Brian Spurlock-USA TODAY Sports

Trey Lyles Remains Unsigned. So Spencer Campbell touched on this in his downbeat on Saturday, but since the Utah Jazz summer league tips off tonight, with the Jazz taking on the Boston Celtics at 7 PM MST, the unsigned contract of Trey Lyles continues to be a hot button issue.  While it's true that Lyles could suit up and practice, and play games without his contract in hand, many agents would advise their clients not to do so considering the risk of injury and other factors.

Unless I've missed something, the situation remains where it was at the end of last week, when Dennis Lindsey addressed the matter with both the Deseret News and Salt Lake Tribune reporters.  The takeaway in those reports is that the Jazz are mostly saying they are delaying the signing to preserve about $373k in salary cap room.

Former SLCDunker Andy Larsen, added a little color to the situation in some 4th of July tweets:

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Mr. Larsen's tweets seem to suggest that the "trade flexibility" put to the forefront by the Jazz isn't completely sincere, but rather the intricacies of the contract for Lyles is really what is holding up everything here.

Let's Talk About Rookie Contracts. As has been explained elsewhere, including those DesNews and SLTrib articles linked above, Rookie Contracts are primarily form in nature. The Collective Bargaining Agreement ("CBA") has written into it the salary scale for each year of the CBA.  As Larry Coon notes in that link, "A player's actual salary in any year may be as little as 80% or as much as 120% of the scale amount." So the Jazz could pay Trey Lyles as little at 80% of $1.866MM or as much as 120% of that amount.  So there is some wiggle room.

Additionally, Exhibit A to the CBA contains a "Uniform Player Contract" which contains all of the standard provisions every NBA player contract includes, including items for per diem, conduct, tax withholdings, mainting physical condition, prohibited activities, promotional activities, etc, etc, etc.  The Uniform Player Contract will also contain an Exhibit 1, which may spell out "Incentive Compensation" and the metrics needed to earn such compensation.

Reading, Mr. Larsen's tweets in conjunction with the known information from Dennis Lindsey, it would seem that it is the latter that the team and Lyle's camp have not agreed on yet.

Is it Common For Players to not get Full 120%? NBA Salary cap guru, Mark Deeks, researched this very thing back when his favored Chicago Bulls were having a rookie contract squabble with their draftee Marquis Teague.  Specifically, in 2012, he found:

In practice, almost everybody gets the 120%, even when drafted late. The exceptions to this are very few and far between. But there have been some. In the doing I've been doing this, there's been all of seven. Sergio Rodriguez signed for only 100% in 2006, while the next year, Ian Mahinmi got only 80% in year one, rising to 100% in later years. Donte Greene got only 100% in 2008, whilst the man drafted two picks above him, George Hill, got 120% in his first two years then only 80% in the last two (an amount which was so small that it was actually smaller than the minimum salary, and thus had to be adjusted upwards to meet that). In 2010, James Anderson got a contract that paid up to of 120% of the scale in the first year upon meeting incentives, but only 115% in the second year, and would have only paid 117% in the third year had he gotten that far (yet that option year was never exercised). Yaroslav Korolev received 100% in his rookie year and 97% in his second (so designed so as to make the two years match each other), the Clippers managing to at least save some money on their wildly ambitious and eventually unsuccessful pick. And last year, MarShon Brooks signed for only 115% in the first year, then 120% thereafter, a move that saved his team $46,255. [NB: For more ardent followers, Cory Joseph met his incentives and got 120%.]

As Mr. Deeks notes, only 7 times have teams not paid the rookie the full 120% scale amount. Logically, the reasoning behind this is quite clear.  Rookie Scale contracts are so small by comparison that paying the full 120% amount is not a hinderance to the team or it's salary cap. The Marquis Teague situation was a bit different since the Bulls were in fact dealing with salary cap and luxury tax issues at the time.

Mr. Deeks also made an important finding:

It will be apparent that three of those six instances have been done by one team - the San Antonio Spurs. Anderson, Mahinmi and Hill was were all Spurs picks, and all exceptions to the 120% convention - the other common thread between them is that they were all drafted late in the first. Of those six, the highest selected was Anderson and #20; the other five was all the 25th pick or below. The Spurs have done it thrice. And they've done it bloody quietly.

Looking at the 3 players drafted, each of them was selected by the Spurs, you guessed it, while Dennis Lindsey was serving as the teams assistant general manager.  So essentially, Dennis Lindsey (or his mentor) have a modus operandi of doing this very same thing to 1st round draft picks within the Spurs organization.

Accordingly, it should not be surprising to us that Rich Paul and the rest of the Lyles camp knew the negotiations with the Jazz would be quite tricky with this contract.

The next question should of course be, why does Dennis Lindsey play hardball with rookie contracts when most teams do not?  Well, that's a bit tricky.  On the one hand, having easy to obtain contract incentives tied to a player's participation in team activities or off-season workouts seems like a decent trade-off for getting the extra 20%.  On the other hand, it does make the Jazz look heavy handed to players and NBA agents and might not be a good look for recruiting players going forward.

As Mr. Deeks pointed out in his article, a team drawing the line in the sand at these items is not wise, unless other teams are willing to do the same thing, which to date, they mostly have not.

What About the Salary Cap Excuse. All of the above said, the salary cap excuse proffered by Dennis Lindsey is a decent one, though in light of his history on these types of things, mostly just an excuse.

According to the informed Eric Pincus, the Jazz currently sit at $58MM in salary cap holds, all things considered with only $47MM in guaranteed money. Depending on where the salary cap ends up (projected between $67-$69MM), the Jazz could end up with between $20-22MM in salary cap room to facilitate a trade (ignoring minor cap holds for one moment).

Depending on what move the Jazz had in mind, they also may want to hold onto some of their non-guaranteed players, particularly Trevor Booker, Elijah Millsap and Joe Ingles.  Accordingly, it is possible that any trade the Jazz facilitiate will come down to a difference of less than $373k in cap space.  The odds of that happening however are extremely low, but since they are not zero it does make some sense for Dennis Lindsey to hang on to that cap room.

The real issue is whether it makes sense to hold on to that minuate chance of that $373k making a difference in light of the fact that Trey Lyles is potentially missing valuable practice/game time with Jazz staff this summer.  I tend to think Summer League play is overrated, but since I also believe that cap space won't come in to play, it would make the most sense to just sign Lyles and get him into camp and in front of Jazz fans at Energy Solutions Arena tonight..

Jeremy Evans. As you all have heard by now Evans is moving on to the Dallas Mavericks.  I am happy for him to get an opportunity to continue his NBA dream even if it is with a Western Conference rival.  Make sure you take the time to read Amar's in depth write up here.