Zach Randolph may or may not be about to get a pay rise
July 19th, 2012

In April 2011, Zach Randolph received a four year, $66 million extension that will pay him through the 2015 season. Notwithstanding the very valid arguments that a man who doesn’t have any athleticism in the first place is going to decline slower than most, and that Memphis have to pay particularly big dollars in order to retain quality their quality players, it is unmistakably a big contract.

The contract called for a $15.2 million salary in 2011/12, a $16.5 million salary in 2012/13, a $17.8 million salary in 2013/14, and a $16.5 million salary in 2014/15, which is also a player option year. The vast majority of contracts around the league increase in their every year, yet, aside from a couple of particular instances (contracts signed with either rookie scale exception or the minimum salary exception), this doesn’t have to be the case. Contracts can go up, down, stay flat, or some combination thereof, as freely as the signing parties so choose and if done in accordance with the acceptable parameters. (The maximum increase percentages are the same as the maximum decrease percentages.)

Zach’s contract structure makes sense. The Grizzlies, clearly, are trying to reconcile their hefty salary bill in the coming few seasons with the fact that Zach’s play will decline towards the back end of the deal, facts that the staggered contract structure seeks to partially alleviate. However, in doing so, they seem to have accidentally violated a CBA rule.

It is important to express at this point that Randolph’s 2014/15 contract is officially listed as a player option year, and not an early termination option. It is often expressed that the two are by and large the same – including repeatedly by this website – and they are. They are both seasons within a contract that only come into force if the player decides that they want them to. There are, however, differences in the minutia. And one of those differences is the issue here.

In an unnecessarily long run-on sentence, Article XII Section 2 of the 2011 Collective Bargaining Agreement states that player option seasons cannot contain a level of guaranteed salary smaller than that of the preceding season. [Section 1 says the same about team options whilst exempting rookie scale contracts.] The problem is that this is exactly what Randolph’s contract calls for. Were Randolph to have an Early Termination Option, however, this would be allowed; the salary can go down in the season immediately following a declined ETO. But it isn’t a season immediately following an ETO – it is a player option year. This differentiation, rarely important, is here vital.

Randolph’s final year, then. should not be valid in its current form. However, it has been deemed to be so, signed by all parties and long since ratified by the league office. The question now is what can be done about it.

As I understand it – based solely upon a combination of supposition and analogous precedent – there exist two options. Firstly, the league can perhaps modify the contract in order to make it accord with its own rules – that is to say, adjusting the level of guaranteed compensation within the option year to equal that of the season before it. This solution, were it to happen (or to be even be possible) would mean $1.3 million more going to Zach, and $1.3 million less in future salary wiggle room for Memphis. A previous case somewhat analogous to this may be the case of George Hill, who, upon signing his rookie scale contract, got stuck in a conflicting overlap between two CBA rules. Hill’s contract paid only 80% of the rookie scale in his third season, which, as he was drafted so low, was due to pay him less than the minimum salary for third year players that season; he was to get $771,440 when the minimum was $854,389. When the time came that that season became current, the conflict was resolved by the season’s salary was bumped up to that of the minimum. The league therefore modified a ratified contract to adhere to its own rules, a situation akin if far from identical to this one.

Alternatively, perhaps nothing will happen. While the Grizzlies may have made a mistake in drafting the contract, it is not that big of a faux pas. It is not as embarrassing as it may seem. Put simply, errors happen all the time. Just because a team knows all the rules, it doesn’t mean they consistently remember them all when it comes to applying them. The human element exists. Whilst usually addressed in the formative stages, mistakes do happen – see also, Matt Barnes to Toronto – and it is the prerogative and jurisdiction of the league office to catch them. In this instance, they did not, and so while the Grizzlies accidentally flouted the rule, teams unintentionally do that often. It is still the job of the league office to approve them. By doing so on a contract that does not adhere to the rules, the league may have denied itself any remedy.

This brings us, then, to an incredibly inconclusive conclusion. The contract has been created, and ratified, in such a way that it shouldn’t have been. From this, we can unhelpfully conclude that the contract will either be modified, or it will not. I suspect that it will not. If it is, it’s a tough break on Memphis.

Either way, Zach Randolph’s agent should start petitioning.

[Edit: multiple people have queried whether the fact that the contract was signed under the old CBA makes any difference here. It does not. The relevant passages are the same in both the 2005 and 2011 CBA’s.]

Posted by at 2:07 AM

1 Comment about Zach Randolph may or may not be about to get a pay rise

  1. graham20 July, 2012, 2:59 pm

    That's pretty interesting, Sham. Do you have any idea why the CBA distinguishes ETOs and player options on this? Or, could this have been an oversight in the drafting of the CBA itself?