Ever since Doc Rivers informed the media that Rasheed Wallace intends to retire following the crushing Game 7 loss in the NBA Finals, there has been much confusion as to what this means for the Celtics' salary cap situation. Is his salary wiped off the books completely? Do the Celtics get some sort of relief from the league? Can they immediately use that money to sign someone to replace Sheed? Do they need to negotiate a buyout with Sheed?
There is no better expert on the NBA's Collective Bargaining Agreement than the venerable Larry Coon. Today, he answered all of those questions with his latest post for Hoopsworld.com. Some of the higlights:
Rasheed Wallace says he's going to retire. What happens to the Celtics' cap? Does his salary come off?
When a player is under contract, he's expected to show up at the team's training camp and be available for the season. That's what the team is paying him for. If the player decides he's ready to hang 'em up before his contract is over – like Rasheed Wallace – he can file retirement papers with the league. But he doesn't get to walk away from the game and keep earning his salary. If he retires, then he forfeits any remaining salary, and the salary comes off the team's books.
One recent example of this came when Jason Williams signed with the LA Clippers in August 2008. Williams thought better of the decision a little over a month after signing, and filed retirement papers with the league. His salary came off the Clippers' books.
Should Wallace decide to file retirement papers with the league, $6,322,320 would come off the Celtics' books next season.
The team and player can reach an agreement whereby the team continues to pay the player in retirement, but this is rare. This happened when James Worthy retired from the Lakers in 1994. Any amount the team pays the player in retirement continues to count against the team's cap.
If the player doesn't show up and doesn't file for retirement, then he's technically under breach of contract. The team could either seek to void the contract, or suspend the player without pay. If the contract is voided then it comes off the team's books; but if the player is suspended without pay then the cap hit (and taxable salary) would remain.
You can read the entire post by clicking the HoopsWorld link above, or just click here. Good to see this issue finally explained. Because of cap holds, which were explained pretty well on Celtics Hub yesterday, this doesn't put the C's under the cap. But it does present a luxury tax savings, which makes taking on other players more palatable to ownership.
