Signed with the full mid-level exception ($5.035 million), Spencer Hawes is the Clippers’ backup center for the next four years.
Compared to the rest of the free agency, Hawes’ contract is far below the market level. Kaman is getting paid $5 million. Jordan Hill re-signed with the Los Angeles Lakers on a deal worth $9 million per over the next two seasons (team option in year 2). Channing Frye signed for $32 million over the course of four seasons. Based on how well Hawes performed with both the Philadelphia 76ers and Cleveland Cavaliers last season, it’s safe to say the Clippers got themselves a steal.
Eric Pincus of the Los Angeles Times included this little tidbit on Hawes’ excellent deal.
Looks like Clippers gave Spencer Hawes a 15% trade kicker
— Eric Pincus (@EricPincus) July 11, 2014
What exactly is a trade kicker you may ask? Here is a definition via salary cap expert Larry Coon:
Teams are permitted to write a bonus called a “trade bonus” (sometimes referred to as a “trade kicker”) into contracts. This bonus is paid to the player when he is traded, but only upon his first trade and not upon any subsequent trades (in the case of a sign-and-trade, they don’t count the initial trade when the contract is signed). The trade bonus can be defined as a specific dollar amount, a specific percentage of the remaining value of the contract, or some combination (e.g., “$1 million or 10% of the remaining value of the contract, whichever is less”). In either case, the actual amount cannot exceed 15% of the remaining value of the contract.
Here is how Hawes’ salary would jump upon being traded (remember it only affects the season in which he’s traded in).
2017-18 (player option): $6,924,351
What does this mean for the Clippers?
In the grand scheme of things it may mean nothing as the salary cap is expected to make a healthy leap once the NBA restructures their television contracts–many expect the cap line to reach $80 million by the 2016 off-season. But if the Clippers enter the next few seasons attempting to skirt the luxury tax line, the jump in Hawes’ contract, if traded, could cause them to pass the tax threshold.
In the past this may have been a real issue as Donald Sterling did his best to avoid paying the luxury tax, hampering his team in the process. But after last season, a season in which the Clippers paid the luxury tax for the first time in franchise history, this may not be a problem. And once you factor in Steve Ballmer who has stated he’d do whatever it takes to win, the tax may not be an issue anymore for the Clippers.