What Is a Contract Buyout?

I feel that the player has high salary and low energy, or that the level of this player is not proportional to the salary he receives, and at the same time, other teams cannot accept the contract (that is, the player cannot trade it). Players cannot continue to play because of long-term injuries, such as the Alan Houston incident in the New York Knicks. This situation allows the team to have more salary space to sign with other players, and players retire early.

Buyout contract

"Buyout contract" means that the player and the team have signed a contract for several years. When the contract does not expire, the team or player unilaterally breaks the contract. The action of "buyout contract" is simply to pay

In the summer of 2005,

Now when players sign a contract, they add a clause to the contract: the player has the right to buy out his contract for the last year or years, so as to advance

The buyout amount reached after the two parties negotiated will be included in the team's total salary, instead of the original salary on the contract. If the player's remaining contract is longer than one season, the amount of the buyout contract will be distributed to each season according to the proportion of the salary of each season in the original contract. For example, there is a player with 3 years of contract left, and the annual salary is 10 million, 11 million and 12 million dollars. The player reached an agreement with the team to buy out the contract for $ 15 million. That $ 15 million will be added to the team's total salary over the next three years. In the original contract, the total salary was 33 million, so the first year's salary of 10 million only accounted for 30.3%. In this way, the total buyout of 30.3%, that is, $ 4.545 million will be counted into the ball The team's salary cap for the next season. In the same way, 33.33% of the total buyouts, 5 million US dollars are included in the total salary of the team in the next 2 seasons; 36.36% of the total buyouts, 5.545 million US dollars are included in the total salary of the team in the next 3 years. It should be noted that even if the team pays the player's buyout contract once, the calculation of the salary cap is in accordance with the above method. As for whether the team will pay the buyout contract in one installment, it depends on both the team and the player to negotiate.

Exception: Each NBA team can buy out a player's contract during the offseason, and the buyout amount is not included in the team's salary cap.