Rules for an LMA contract extension

LMA signed his 5yr, 65M extension in October 2009. You can sign an extension 3 years after your original contract was signed. So technically, he's been able to sign an extension since basically Opening Night. However, before reading into that too much, any extension can only be for 4 years, including the years left on the deal, and even if you sign it on the last day of the season, that counts as one full year. So if LMA would've signed Opening Night (or even on the last game of the season), it only would've added 1 year to his existing deal. That changes July 10.

Coon CBA FAQ #58 and #59 deal with these rules.

There are a couple of options. First is the "normal" extension.

This is the boat we're in on July 10. LMA has 2 years left (2013-14 for 14,628,000 and 2014-15 for 15,756,000). So he can sign a "4 year extension" on July 10 that keeps his 2013 and 2014 salaries, adds a 7.5% raise (to a shade under 17M) for 2015-16 and another 7.5% (18.2M) for 2016-17. This is about what he could make as a free agent maximum in 2015, unless the salary cap is around 65M, because the maximum cap percentage is the same for a 7 year player as is it for a 9 year player.

Option Two is the "renegotiation" aspect. Since we have cap space, we can renegotiate his contract July 10--in effect tearing up his current deal and signing him to a 4 year max contract (which will probably start at about 17M for a player with 7 years in the league and therefore take about 2.4M from our cap space, leaving us at 6.5M).

Option Three is the "extend and trade". In this case, you're limited to a 3-year extension (where the two existing years count). So you're only extending him one extra year, but for a team that is scared of trading for him as a rental you can sign LMA (if he wants) to an extra year for them and then trade just as if it were a S&T of a free agent. All of the S&T rules still apply.

So IF LMA is serious about staying, he can on July 10 sign basically a brand-new, 4-year max deal with us and only reduce our cap space to 6.5M (not enough to absorb Asik or Gortat or Biedrins or Jordan unless someone else is going out). Or he can sign a negotiated 3yr max extend-and-trade, which should help get better/more return value for him if he doesn't want to stay in Portland. Or he can extend his contract, but not change the next two years--in effect getting a max deal in 2015-16 and 16-17, but his "normal" deal until then--which preserves our 8.9M in cap space.

 

bump b/c of the question in another thread.

At this point, the "renegotiate" aspect is off the table until at least the summer (if we have cap space then and choose to spend some on LMA). This summer, if we do have cap space, it de facto tears up his contract and signs him to a 4-year max deal, so that next year, instead of making his already-signed 16M for 2014-15, he'll make whatever the max is for a 9 year player (roughly 30% of the cap, or roughly 19M or so) and then the max for the next 3 years. (Disclaimer: it's not exactly 30% based on how the league calculates the cap and other salaries, but it's roughly 2-3M more than what he's contractually going to earn for 2014-15).

But if he wanted to, he could sign an extension so that when this contract is up (in July 2015), he gets 2 more years of a max contract (taking him through the 2016-17 season).

So today, he could sign an extension that gave him another 2 max years, but no change to his current contract.

If he/Olshey waited until this summer (and had enough cap room for the difference) he could sign an extension for 3 more years (to July 2018), but all four years of the deal could be at the max.
Signing this summer would've taken about 2M in cap space, but would've given him the max for this year and the next 3 (through July 2017)

Coon CBA FAQ #58 has more info, if you're interested.

 

A) Probably not, but it's not certain. Right now, we're on the hook for 64+M next year. If we don't bring back Barton's 915k non-guaranteed, and Mo opts out, we have about 61M in commitments and if the cap is at 63M, then we'll have enough space for LMA, but only the Room Exception instead of the "full" non-taxpayer MLE.

b) Yes, but it's technically called a "renegotiation" at that point. You don't need cap space to offer the extension, you need it to offer a renegotiation.

 

correct