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Question about cap space and contracts as a new fan (alien.top)

submitted 2 years ago by Little-Penalty-6296@alien.top to c/nba@nba.space

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I just started watching last play offs and don't know a lot especially about cap space and contracts.

I read an article today that said the reason Harden left was because he was promised a max contract after cutting his paycheck by 25 mil so the Sixers can build a decent team.

My question is how could it be possible for the Sixers to give Harden a max if they couldn't last year ? Like the reason he took a paycut was so the Sixers could add players to their depth , right?

So what changes the season after ? Like is there a rule that can help Sixers give Harden the max ? Or did Harden expect the Sixers to let go of many of their bench players so he could get a max?

It might be a dumb question and I'm not sure if I described it correctly , but if anyone could explain it would be appreciated.

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[–] bb1432@alien.top 1 points 2 years ago

They could have paid him more a couple summers ago.

Supposedly, he took a paycut with a wink-wink (read: illegal) agreement that he'd get it back on the back end.

Why do that? Two reasons:

Luxury tax limitation. If you're in a very high tax bracket, pushing a dollar today into tomorrow can have more than a dollar's worth of impact on your expenses.
Roster-building asset maximization. In this case, by taking a certain amount, they could use the non-taxpayer Mid Level Exception to sign a better player than they could sign with the Taxpayer MLE. Once you sign someone to the Nontax MLE, you are hard-capped for that league year. But the next year, you can blow right past that number while still retaining the guy you signed on the MLE the year before.