Editor's Note: I felt this was worth putting on the front page as somewhat of a Public Service Announcement. Thanks to Rook6980 for putting this together. -Truth
Why don't they just drop XXXXX player?
You've heard it before.... Posters asking why the problem with the "Salary Cap" -
Why don't they drop Pecherov and free up Cap Space? Why don't they just drop McGuire?. Why not just drop Songaila?. Why not just drop (insert player name here)?
The Wizards WON'T just drop Pecherov (or McGuire, or Young, or any other Wizards player under contract) because almost ALL Standard NBA contracts are guaranteed. (The Wizards have 13 players under contract for the 2008-2009 season, and all of them are guaranteed contracts)
In other words, they would still have to pay him, AND his salary would still count against the Salary Cap AND, more importantly, against the Luxury Tax.
So, if they just dropped a player under contract - they would be paying a salary, eating up Cap and Tax space, and getting nothing in return.
Since Arenas is injured, why can't the Wizards just sign another player until he returns?
Again, insert any player name, but the question remains the same. During the regular season, NBA teams must maintain a minimum roster size of 13 players and a maximum roster size of 15 players. Injured players count against the roster size. If the Wizards are at 15, they do not have any roster room to sign another player.
The other consideration is the Luxury Tax. For the 2008-2009 season, the Wizards are extremely close to the Luxury Tax ceiling of $71.15 million - so signing another player, even at a minimum salary might put them over the Tax ceiling.
Last year, when the Wizards were struggling because of so many injuries, many people asked "Why not just go over the Tax ceiling" to sign another player ?
For every dollar that a Team exceeds the Luxury Tax threshold, they must pay a dollar-for-dollar tax. At the end of the year, that money is pooled together and paid to the teams that stayed under the threshold. I believe the 2008 payment was about $3 Million.
So, let's say you're the Wizards GM, and you're right up against the Luxury Tax threshold; but you need to sign another player. You need a PG, because Arenas is injured and Daniels has a bad wrist. You find a D-League rookie that can be a band-aid solution, and sign him to a 1-year deal at the Rookie Minimum of $442,114. But then you have to pay $442,114 into the Luxury Tax pool... At the end of the year, you miss out on the $3 Million payment; So that D-League rookie actually cost your team almost $3.9 Million .
You can see why teams want to avoid the Luxury Tax.