The Memphis Grizzlies rescinded the qualifying offer on Hakim Warrick Friday. This has led to a lot of speculation on the motives of the team for this move.Chris Herrington wrote a particularly thought provoking blogabout this issue on Saturday.
Many people speculated that the Grizzlies did this to free up cap space to sign another player, namely one Allen Iverson. However the Grizzlies didn’t need to rescind the offer if they intended to sign Iverson to the one year contract that has been speculated about in the media.This rumor was squashed by Michael Heisley in the Commercial Appeal on Sunday.
So why did the Grizzlies make this move? Was it to free up cap space, make it easier for Warrick to sign with another team (as restricted free agents in this market are finding it difficult for teams to make offers) or something else financially motivated? To figure it out we need a slightly better understanding of the CBA rules on the qualifying offer and what it means when a qualifying offer is rescinded.
So I turned to Larry Coon. Coon writes a blog calledLarry Coon’s NBA Salary Cap FAQ. Mr. Coon’s blog is considered the single best place to go for answers on the Collective Bargaining Agreement. On Mr, Coon’s web site states that a player coming off the 4th year of his rookie contract and has a salary below the league average salary – as Hakim Warrick does – then in fact the cap hold is 300% of his previous salary. Unfortunately there isn’t actually an answer on the blog to explain the pros and cons of rescinding an offer sheet.
3 Shades of Blue asked Mr. Coon what the salary cap implications of renouncing Hakim Warrick would be. Here is his reply:
“A player’s cap hold is always the greater of his free agent amount, his qualifying offer amount and the first year salary in any offer sheet he signed. If his free agent amount is greater than his Q-offer then withdrawing his Q-Offer doesn’t affect their cap.
The reason to withdraw the Q-Offer is because you don’t want the player to accept it, and in turn you’re giving up the right to match the salary if he signs elsewhere. The reason to not renounce him completely is to preserve Bird rights, and therefore the rights to sign him later if you decide to, or include him in a sign and trade.
The central point is that the Q-Offer is in the player’s hands, while the Bird rights are in the team’s hands. If they needed the cap room they can renounce him at any time to regain it. If they leave the Q-Offer hanging out there the player has the discretion whether to accept it and take up a roster spot and cap room. So by renouncing one but not the other, they keep everything in their control.
So from what Mr. Coon is saying this is not a cap space changing move but rather a pure control issue. By renouncing the Q-offer but not renouncing the player the team has control over certain aspects of Warrick’s future. They can still do a sign and trade for instance in an attempt to improve the team. They can still renounce the player if the cap hold money is desired to sign another player. They can even resign Warrick if both sides agreed to such a contract. What Warrick can’t do is force the Grizzlies to pay him for another season if they don’t want him on the team. This move is as much about controlling what happens the rest of this summer as it about money and cap holds.