The Amnesty Auction

It's been assumed for quite some time that the new post-lockout collective bargaining agreement would include some sort of amnesty clause. Used once before in 2005, the amnesty clause allows a team to waive one player under contract and to realize certain financial benefits in so doing.

You can understand why the owners want such a thing - it's a do-over on a bad contract, a chance to undo at least part of a bad mistake. Still, I can't help thinking about the moral hazard involved. In the wake of a one-sided "negotiation" in which many if not most of the concessions the owners extracted from the players were of the "save us from ourselves" variety, it would seem to me that the league might be better off in the long term if the owners were required to actually learn from their mistakes rather than being allowed to use amnesty white-out on them. 

There's another huge problem with amnesty. In a league that is currently tilting at the windmill of competitive balance, amnesty tends to help the rich get richer. One of the logical flaws in the league's approach to competitive balance is the assumption that players will consistently choose to play for the less competitive team with more money to spend. In fact, many times the opposite is true - players, veterans in particular, tend to choose the more competitive team with less money to spend. These guys like money, but they like winning even more. Amnesty amplifies this trend. The wildly overpaid veteran suddenly becomes the affordable role player on a contender after a trip to the amnesty list. 

The most significant resignings from the 2005 round of amnesties - Michael Finley, Doug Christie, Aaron McKie - all ended up on mega-teams in the West, the Spurs, Mavericks and Lakers respectively. To make matters worse from a competition standpoint, both the Mavericks and the Lakers took advantage of both ends of amnesty - Dallas waived Finley and signed Christie, the Lakers waived Brian Grant and signed McKie. Neither Christie nor McKie played significant roles for their new teams, but that's beside the point - two luxury tax teams got a shot at some inexpensive veterans and saved money in the process, because of the amnesty clause. As for Finley, he actually was a significant contributor to a San Antonio title in 2007.

Cognizant of the anti-competitive potential this time around, the NBA has tweaked the rules of amnesty quite a bit. On the front end, they've made the amnesty clause more attractive for more teams. In 2005, amnesty provided only luxury tax relief - waiving a player using the amnesty clause had no impact on the salary cap,. This time around teams can also recoup salary cap space, a major benefit (in either case, the player has to be paid). Teams also have more flexibility as to when to use the amnesty clause. In 2005 it had to be used by August 15 2005 - this time, it is available at any time during the duration of the CBA, but only for use on a player that was signed before the new CBA. 

But the most significant changes are on the back end. In an attempt to mitigate the "rich-get-richer" problem, the NBA is instituting a phased waiver system for the amnestied players of 2011. Teams under the salary cap will be given first crack at any amnestied players - they can submit a 'bid' in the form of a contract offer, and the player must sign with the highest bidder. If and only if the amnestied players clear waivers without an offer from a team under the cap will they become unrestricted free agents, available to sign with any team including those over the cap.

[It should be noted that this in and of itself is a major departure from anything that veteran players have had to deal with in the NBA. Beyond the draft, players almost always have at least some say in determining the teams for whom they will play (standard waiver claims would be another example, but players are almost never claimed off the waiver wire, instead becoming full free agents when they clear waivers). In this case, if Gilbert Arenas is waived and Sacramento submits the high bid (not that they would), Arenas' only choice would be to play for the Kings or to hold out.]

As one of the teams under the cap, the Clippers could actually benefit greatly from this system, assuming that one or more players of interest to them ends up on the amnesty list. Not only are the Clippers one of a limited number of teams under the cap, they're also one of the few that is close enough to being competitive that they might be interested in the talented but damaged goods likely to be available. Teams like Sacramento, Arenas example notwithstanding, will have little interest in signing amnesty players given that they're still several years away from the playoffs.

This creates some interesting scenarios for the Clippers. If a reasonable stop gap solution at the small forward ends up being amnestied by his current team, suddenly the odds of that player winding up on the Clippers just got a lot better. It's no longer a question of that player choosing the Clippers over chasing a ring with a contender - if the Clippers decide to bid. they can have the player before he has a chance to sign with the Lakers or the Heat or the Celtics. Unfortunately, there may not be any great choices at small forward. Will Atlanta amnesty Marvin Williams? That could be interesting. Richard Jefferson of the Spurs is an obvious candidate, but may not be an upgrade over other available threes. Rashard Lewis is likely to be on the list, and he would certainly have value, but he's not really a three. Same goes for Brandon Roy.

This is probably also the first place where the law of unintended consequences will be felt. It's entirely possible that a team under the cap will see a player that they think is undervalued and make an offer simply to stockpile the asset. They'll then turn around and trade that player to the highest bidder from the list of contenders that actually wants the player - creating the latest NBA craze, the claim-and-trade. Rules governing trades of claimed players are unclear at this point - the NBA will likely institute some waiting period before a claimed player is eligible to be traded.

And then I had this crazy idea. What if the Clippers made a waiver offer to an amnestied Baron Davis? It's no secret that I think he's a better fit for the team than Mo Williams. If he's waived by Cleveland, would the Clippers be interested in forcing him into a reunion? Given that the trade itself smacked of desperation, to the point where it seems that Baron was persona non grata to someone in Clipperland (possibly Sterling), I'm fairly certain that this would never happen. But from a purely basketball standpoint, it could be a solid move.

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