- Sep 17, 2007
- 25,027
- 23,056
We're not talking about the actual AAV, i know that's static. We're talking about the AAV in a buyout scenario, the "dead cap space" if you will.
The AAV of each year of the buyout is dependent on the actual salary compared to the original cap hit. Simple example:
6 mil AAV
2 years left
6 mil salary in each year
Player is 26 or older
The player is owed 12 mil, 2/3rds of which is 8 mil. The cap hit would be 2 mil per year for 4 years. (8 mil / 4 years)
Example 2:
6 mil AAV
2 years left
4.5 mil salary in each year
Player is 26 or older
The player is owed 9 mil, 2/3rds of which is 6 mil. The cap hit would be the following:
Year 1: 3 mil
Year 2: 3 mil
Year 3: 1.5 mil
Year 4: 1.5 mil
The formula here is (2/3rds remaining salary / twice the remaining years) + Original cap hit - original salary
Year 1: (6 / 4) + (6 - 4.5) = 3
Year 2: (6 / 4) + (6 - 4.5) = 3
Year 3: (6 / 4) + (0 - 0) = 1.5
Year 4: (6 / 4) + (0 - 0) = 1.5
Example 3:
6 mil AAV
2 years left
9 mil salary in year 1, 6 mil salary in year 2
Player is 26 or older
Player is owed 15 mil, 2/3rds of which is 10 mil.
Year 1: (10 / 4) + (6 - 9) = -0.5
Year 2: (10 / 4) + (6 - 6) = 2.5
Year 3: (10 / 4) + (0 - 0) = 2.5
Year 4: (10 / 4) + (0 - 0) = 2.5
If the player is under 26, the payout is 1/3rd instead of 2/3rds.