NBA Rumors: 3 Reasons Why Wizards Shouldn't Use Amnesty Clause on Rashard Lewis
News broke today that the Wizards were not going to use the Amnesty Clause on Rashard Lewis, according to his agent Tony Dutt who talked with Yahoo! Sports’ Marc Spears and a press conference held by Ernie Grunfeld.
Rashard has been considered the poster boy of the lockout by several prominent sports sources throughout, with the second highest salary in the league next season, behind only Kobe Bryant.
With many new details of the upcoming CBA agreement coming to light, it is not surprising that the Wizards would be willing to stand pat with the players on their roster. It is becoming clear that they will wait until the season is underway to evaluate the chemistry on the team before making any decisions about using the Amnesty Clause.
Most people think that the Amnesty Clause is the perfect way to get rid of Rashard Lewis’ albatross contract and move on with the rebuild.
Unfortunately, after reading through all the research about the clause and how it works, this would not be the case for the Wizards. In this slideshow I will fully layout the details of the Amnesty Clause, showing why being haste and using it now would be extremely costly to the team.
Truth About the Amnesty Clause
In order to debate the positives and negatives of using the Amnesty Clause, it is important to know exactly how the clause is used and what financial effects it would have on the Wizards if they were to use it.
Essentially there are two scenarios that can happen if the team decided to amnesty Rashard.
No. 1: A player is released (via amnesty clause), and there is a waiver period. During this time teams can bid on that player’s services (Auction style). The highest bidding team pays the salary that they bid, while the Wizards would be required to cover the difference in the salary over the next two years.
No. 2: If a player is released and makes it through the waiver period without any bids, he becomes an Unrestricted Free Agent. The Wizards would be forced to pay his entire salary and even if Rashard were to sign with another team, the Wizards would still continue to pay the entire amount.
Coming off a knee injury at 31 years old, it would be very likely that the Mid-Level Exception would be the highest salary Rashard could hope to get in the open market.
Looking at scenario one, if a team bid on him at the Mid-Level Exception value (about $5 million a year) then the Wizards would still be responsible for about $15-$17 million each year for the next two years, totaling over $30 million.
Looking at scenario two, the Wizards would be stuck paying off the $40-plus million left on Rashard’s contract over the next two years, which would be an incredible burden considering the state of the economy.
With Rashard’s declining value as a player and Top Three salary in the league, the Wizards would end up losing more money by dumping him then holding onto him, and either getting value back in a trade or using the Amnesty Clause next year.
New Salary Cap Floor
Another drastic change to the CBA agreement that would affect using the Amnesty Clause on Rashard Lewis is the new minimum team salary. In the old agreement, teams were required to spend at least 75 percent of the salary cap to meet the requirement of the salary cap floor.
However, in the new agreement, teams must spend at least 85 percent of the salary cap for the next two seasons, rising to 90 percent for the subsequent years covered in the deal.
While there is no set agreement in place, the salary cap looks to be about $58 million for the 2011-2012 season.
The Wizards WITH Rashard’s $22,152,000 salary still only have $40,682,282 total tied to players on the roster so far. If the team were to cut Rashard, they would be forced to spend about $45 million in contracts just to get back to the floor.
This would mean that if the team were to amnesty Rashard's contract they might have to spend upwards of $80 million this season alone just to pay off his salary, as well as get the free agents required to meet the minimum salary requirement.
In a press conference today, Ernie Grunfeld came out and essentially said that the team was going to save the Amnesty Clause because of the relatively weak free agent mark (via SB Nation). It is a logical decision, as the team does not want to put all its eggs in this year's basket when the Wizards could open up enough space to become major players in the loaded free agent market next year.
Value as Expiring Contract/Conclusion
This final thing that people seem to be forgetting about with all the talk about the Amnesty Clause is that there is always going to be value with expiring contracts. In the case of Rashard’s contract, after this year, he will become a $23 million dollar trading chip. Most teams that need to shed salary to get under the cap would kill to be able to shed that much money after one season of work.
Do not forget, the Amnesty Clause can be saved and used at any point in the future on any player currently on the roster before the CBA agreement is signed. There is no point in dumping Rashard now, who just came back from knee surgery and would end up costing the Wizards the majority of his salary if they were to amnesty him.
The best option is to let this short season play out and hope that he can provide nice veteran leadership to the team and show that he would at least be a useful piece on a contender next season looking for a large expiring contract where the Wizards could bring back some value in a trade while shedding the remainder of his salary.
If for some reason he is never able to shake the injury, the team can always amnesty him next year and have the cap space ready for the offseason. The Wizards will have the space to become one of the big players in the free agent market looking to bolster their rebuild.
The Wizards are in a great place salary cap-wise even with Rashard's contract. They will have about $18 million left to sign the rookies, offer Nick Young a reasonable contract, and still have room to go after another veteran or two to fill out the roster.
With this shortened season coming up, I believe patience and belief in the rebuilding efforts that Ted Leonsis has already begun, will be the key to having a team that will be able to compete in the next few years.
At this point, it is just nice to have basketball back after the long wait.