Cap questions

["Jeremy Warren" <jeremy.warren@alphatech.com>]

                      Cap questions                                9/9/97

You can waive (cut) players that are under contract for years to come (Dee,
Dana, etc...) but their contracts are guaranteed and must be paid out.  The
money paid out still counts against the salary cap.  Thus cutting them
accomplishes nothing.  The only way to cut them and get cap relief is to hope
that someone actually claims them off of waivers.  But this is extremely
unlikely because the team that claims them must have room under the cap to
accomodate the remainder of the player's contract.  If we cut Dee or Dana,
they would most likely clear waivers and sign for the league minimum somewhere
else.  We would get $270K in cap room this year only and would have to pay out
all of the contract minus $270K.  The waived player has no financial incentive
to ask for more than the leauge minimum because when it's all done he'll still
get a total that adds up to his old contract.

What some teams (like the knicks) have done is to trade a player away who has
several years left for a player with only one year left under contract and
also give the other team the money to pay out the rest of the contract.  This
would be like us trading Dana Barros and $14M for Stanley Roberts who has one
year left.  We would get about $3.5M in cap relief next year.   The problem is
that every team in the league is looking to clear up cap space for next year's
free agent bonanza.

Lastly, Vin Baker does have an out clause in his contract but it's not until
the summer of '99.  If we could find a way to clear up about $10M we would
have a chance to get him (because of the 20% raise every year), but we would
have to sign him before resigning Antoine.

Jeremy