Several NBA players waived as teams gain one-time amnesty from luxury tax
NEW YORK -- The so-called "Allan Houston Rule" failed to claim its namesake Monday.
Houston avoided being cut by the New York Knicks on the final day for NBA teams to take advantage of a one-time chance to escape luxury tax obligations for any contract on their books.
Rather than saving almost $40 million, New York opted instead to release forward Jerome Williams to avoid $21.3 million in luxury taxes that would have been due over the next three seasons.
Dallas was working into the night trying to find a trade for Michael Finley, who is owed $51.8 million over the next three seasons. If a taker couldn't be found, the Mavericks were expected to release the 10-year veteran.
In all, teams saved $154.5 million in future tax payments by waiving 16 players. Among those let go yesterday were Fred Hoiberg of Minnesota, Ron Mercer of New Jersey, Calvin Booth of Milwaukee and Troy Bell of Memphis.
Several teams made moves to clear tax obligations for players who left their rosters long ago. They included Alonzo Mourning (Toronto), Vin Baker (Boston), Derrick Coleman (Detroit), Wesley Person (Miami), Eddie Robinson (Chicago) and Howard Eisley (Phoenix).
Players previously released under the amnesty program included Doug Christie (Orlando), Aaron McKie (Philadelphia), Brian Grant (Los Angeles Lakers) and Derek Anderson (Portland).
Teams whose payrolls exceed $61.7 million for the upcoming season will have to pay a dollar-for-dollar tax on the overage. Among them are the Indiana Pacers, who waived retired guard Reggie Miller to save $6 million in luxury tax costs.
"In my conversations with Reggie, it is clear he will not play next year, and therefore to take advantage of the amnesty rule, we designated Reggie as our amnesty player," Pacers president Donnie Walsh said. "I've spoken with Reggie, and he is fine with it. This will go down as his final assist."
The Knicks had been expected to waive Houston, who played only 20 games last season due to chronic knee soreness. But Houston's close ties with Knicks owner James Dolan of Cablevision, along with incoming coach Larry Brown's history of coaching Houston with the 2000 U.S. Olympic team, helped factor into the decision for him to remain on the roster.
Also, the Knicks could get luxury tax and salary cap relief while also having Houston's salary paid by insurance if his knee injury prevents him from returning.
"I was prepared for (being waived)," Houston said. "You have to be. The team has made changes already in preparation for me not being there, and I understand that. But I still believe I can play."
The one-time amnesty option was part of the six-year collective bargaining agreement agreed to earlier this summer by the league and the players' union. Under terms of the rule, players who were waived will still be paid by their former teams and cannot re-sign with them until their current contracts have expired.
Grant, for example, will receive $14.3 million from the Lakers in 2005-06 and $15.4 million in 2006-07 in addition to the money he receives from the Phoenix Suns, who were planning to sign him today.
Under the "tax certainty" provisions of the new labor deal, the luxury tax will be assessed each season against teams that exceed a certain payroll threshold. Under the old rules, teams did not know until a season had ended whether a luxury tax would be applied for the previous season.
The teams reaping the most savings under the amnesty rule include the Lakers ($29.7 million), Knicks ($23.1 million), 76ers ($19.5 million), Trail Blazers ($18.8 million) and Bucks ($13.2 million). The team with the smallest savings will be the Memphis Grizzlies, who relieved themselves of tax obligations for Bell's 2005-06 salary of $1.5 million.