In that scenario, his deferred compensation gradually stops being considered deferred, and his cap hits are adjusted accordingly over the course of his contract.
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If the Over-38 rule doesn’t already sound complicated enough, there’s an additional aspect of the rule that affects what happens when a veteran on an Over-38 contract plays out most or all of his deal.
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Extend contacts in nba 2k19 mobile full#
In other words, if Nene had full Bird rights last summer, his four-year deal wouldn’t have been subject to the Over-38 rule. If that player signs a five-year contract, only the fifth season would be considered a zero year. If a player who is 35 or 36 years old signs a four-year contract with his previous team using Bird rights, the Over-38 rule wouldn’t apply. Players who re-sign with their previous teams prior to October 1 using full Bird rights get some extra leeway.The first “zero year” is either the fourth season of the contract or the first season after the player’s 38th birthday, whichever comes later.The Over-38 rule only applies to four- or five-year contracts, or extensions that keep a player under contract for a total of four or five years.Determining what seasons are considered “zero years” is tricky, since a variety of factors relating to the length of the contract, the player’s age, and the player’s Bird rights are taken into account. In Nene’s case, that fourth year was referred to as a “zero year,” reflecting the adjusted cap charge. So while Nene technically could have signed a contract that extended beyond his 38th birthday, the Over-38 rule significantly limited the Rockets’ ability to complete such a deal. Tucker, leaving the Non-Bird exception as the team’s only viable means of bringing back Nene. But Houston had earmarked its MLE for P.J. If the team had wanted to use part of its mid-level exception, it could have given him that same contract the two sides originally negotiated. It’s important to note that the Over-38 rule didn’t prevent the Rockets from signing Nene to a four-year, $15MM deal.
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As such, the Rockets couldn’t complete the four-year contract using those Non-Bird rights. It would have looked like this: Yearĭue to the increased cap hits on the new-look deal, the contract would have violated the rules of the Non-Bird exception, which limited Nene’s first-year salary to 120% of his previous salary ($2,898,000). But because a four-year deal for him had to be considered an Over-38 contract, the fourth-year salary needed to be viewed as deferred compensation, which would be spread out in a prorated fashion over the first three years of the deal. The start of a season is considered to be October 1 for Over-38 purposes, so if Nene’s birthday was on October 13 rather than September 13, he would have been okay. Unfortunately for Nene and the Rockets, the final year of this deal would have violated the Over-38 rule because the veteran center will turn 38 on September 13, 2020, prior to the start of the fourth season of his contract. The contract would’ve looked like this: Year In the summer of 2017, the Rockets and Nene fell victim to the Over-38 rule when they tried to complete a four-year deal using Nene’s Non-Bird rights. The Over-38 rule is a little complicated, so let’s use a real-life example to illustrate it. In most cases, this prevents the team from completing the contract using the necessary cap room or exception. In these cases, the salary in the year(s) after the player turns 38 is considered deferred compensation, and is applied to the years earlier in the contract, when that salary is actually being earned.
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The Over-38 rule generally takes effect when a free agent signs a long-term contract that extends beyond his 38th birthday. For instance, if a team wanted to offer a 37-year-old free agent a two-year contract worth $35MM but only had the mid-level exception available, the team could have made it a four-year offer in order to fit the average annual salary within the MLE, knowing that the player could collect his third- and fourth-year salaries after retiring. The original purpose of the Over-38 rule was to block teams from circumventing the salary cap by offering a contract that extends beyond when the club expects a player to end his career.
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It also limits the ability of players in their mid- to late-30s to sign long-term contracts. The Over-38 rule, formerly known as the Over-36 rule under the NBA’s previous Collective Bargaining Agreement, closes a loophole in the CBA, preventing teams from paying older free agents more than their cap room or cap exceptions allow.