The exact amount of Marbury's extension

[hcsilla]

There are two possible scenarios with Marbury's extension.

The maximum a player can receive as a free agent is the defined maximum salary (Scenario A ) or 105% of his previous salary (see Scenario B ), whichever is greater.


Scenario A

When the extension takes effect, and the maximum salary for that season is known, the extension is amended if necessary.
So Marbury as a +7-year veteran could get the 30% of the actual cap in 2005.
The cap should be at 45 mil. in 2005.
The raises in each year of the extension are limited to 12.5% of the salary in the last year of the existing contract, or 1.828 mil.

The 1st year's salary of Marbury' extended contract in 2005/2006 is:

45 mil. x 0.3 = 13.5 mil.

2006/2007: 13.5 + 1.828 mil.= 15.328 mil.
2007/2008: 17.156 mil.
2008/2009: 18.98 mil.

That is a 65 mil./4 year extension IF the cap will be about 45 mil. in 2005.


Scenario B

Marbury's starting salary in 2005/2006 =

14.625 mil. (last year's salary of his existing contract) x 1.05 =

15.36 mil.

2006/2007= 17.18 mil.
2007/2008= 19 mil.
2008/2009= 20. 83 mil.

That is a 72 mil./4 year extension IF the Suns choosed this scenario.


Since the sources are reporting about 80 mil./4 year (which one is obviously wrong) or BETWEEN 76 mil. and 80 mil. I think that Suns choosed Scenario A and gave the "normal" max. for Marbury which is still higher (because of the higher raises) than other team could give in 2005 for him.

If Suns choosed Scenario B AND the cap will be not higher than 45 mil. in 2005 then I agree with elindholm that Suns made a small mistake (2 mil. less cap flexibility) with Marbury's generous extension which will probably cost (as the Outlaw-trade proved) some talent for them since they are trying to stay under the luxury tax.

 

[F-Dog]

From hoopshype:

2005: $16,453,125
2006: $18,281,250
2007: $20,109,375
2008: $21,937,500

According to them, Marbury is making about $3m/year over 'Scenario A'.

http://www.hoopshype.com/salaries/phoenix.htm

 

[hcsilla]

Originally posted by F-Dog

According to them, Marbury is making about $3m/year over 'Scenario A'.

Yes, I just don't know what do they base this on.

 

[F-Dog]

I don't know, either.

Marbury's deal seems to be identical to Iverson's deal, which has been around longer...maybe if you get to the bottom of the Iverson deal, you'll also know the truth of Marbury's contract extension.

 

[hcsilla]

Originally posted by F-Dog
...maybe if you get to the bottom of the Iverson deal, you'll also know the truth of Marbury's contract extension.

Iverson's situation is technically the same as Marbury's so I did not understand the numbers either which have circulated around AI's extension.

 

[elindholm]

The maximum a player can receive as a free agent is the defined maximum salary (Scenario A ) or 105% of his previous salary (see Scenario B ), whichever is greater.

The raises in each year of the extension are limited to 12.5% of the salary in the last year of the existing contract, or 1.828 mil.

Maybe if you're extending someone who isn't a free agent, you can just start with another 12.5% raise? That would be compensated for by the fact that the extension can't be as long as a full FA contract.

Hoopshype gives $14,625,000 as Marbury's salary in the final year of his pre-extension deal. 12.5% more than that is $16,453,125. It seems very likely that this is where HoopsHype got the number; the only question is whether it is correct.

 

[hcsilla]

Originally posted by elindholm


Maybe if you're extending someone who isn't a free agent, you can just start with another 12.5% raise? That would be compensated for by the fact that the extension can't be as long as a full FA contract.

No, that's probably not the case.

I think that I have found where hoopshype got their numbers (incorrectly) from.

This is from Larry Coon's FAQ:

"The salary in the first year of the extension is limited to 112.5% of the salary in the last year of the existing contract. "

But hoopshype probably didn't read the next two sentences from Larry Coon:

"However, it also can't exceed the maximum salary the player can receive if he were to sign a new contract that year as a free agent. The maximum a player can receive as a free agent is the defined maximum salary (see question number 9 ) or 105% of his previous salary (see question number 10 ), whichever is greater."

 

[elindholm]

Hcsilla, I hope you're right. Four years for $65 million or so sounds a heck of a lot better to me than four years for $80 million. That's $4 million per year difference that can be spent on more talent. If the deal really is a "Scenario A" max extension, that's not too bad.