Billups Buy-out
This is my understanding of Billups' contract terms. The Knicks have the right to buy him out of next year's $14.2M contract for $3.7M. If we buy him out, the $3.7M will count against our cap -- at least under the current CBA. I believe that we have to exercise our buy out rights within 5 days after the basketball season ends. This is a very short window.
if we do not buy him out, we will be about $3M over the current $58M CBA cap for next year. We will have zero room for any meaningful free agent. If we buy him out, we save about $10.5M which will put us around $7M under the cap.
Turiaf is an asset with a player option and contract for next year at $4.360M. Douglas is another asset with a team option at $1.145M. Fields is an asset at a bargain basement price. I expect we want to keep these assets, though perhaps Turiaf could be used as a chip in a trade. We have no other real assets. Presumably we want to sign Shawne Williams and that will put us further over cap.
If we keep Billups and a new CBA is little different from the current and there will have been no lock-out, then we are going to have essentially the same team we currently have plus a draft pick and perhaps a mid-level exception.
But I think there is a good chance of a lockout for perhaps an appreciable part of next year. When there is finally a new CBA worked out, there may well be forced extensions for players like Billups who will have lost significant amounts in their last contract year. Despite all his talents, I think we have to buy out Billups and then when the dust settles on a new CBA perhaps begin a new negotiation or otherwise use whatever cap sapce we might have. We just do not know what the new CBA will look like. I would prefer to go into a new CBA without a $14.2M fixed price for Billups.
As for the argument that if we keep him we will have a valuable expiring contract to deal before the 2012 trade deadline -- well, those things have not worked out so well for us in the past. Also, I believe it may be possible to trade Billups within that 5 day window after the season ends. His contract would be Dampier like. The team that takes him gets a $14M contract, perhaps by giving up a $14M or so contract, but then can exercise the buy-out and save $10M. Consider this, both Camby and Kaman have contracts expiring in 2012, one at $9.2M and the other at $12.2M. Of course, I might well be totally wrong on the viability of such a transaction.