Nikola Mirotic: Still dominating Euroleague, buyout details

Nikola Mirotic: Still dominating Euroleague, buyout details
Image by Midgejong/Wikimedia

Mirotic had another outstanding game for Real Madrid in this week's Euroleague contest, scoring 22 points on 5 shot attempts while grabbing six rebounds in 26 minutes.

Mirotic was 4/5 from the field, including 2/2 from 3-pt range, and 12/15 from the free throw line. Real Madrid is now 9-0 in Euroleague play, and Mirotic is still posting ridiculous numbers: 63.2% from the field, 64% on 3's, and 86.8% from the free throw line.

I mentioned in a past article how Mirotic is one of two players ever to have a 50/40/90 season (FG%/3pt%/FT%) in Euroleague play, he seems to be on his way to shattering that threshold if he hits a few more free throws.

It has long been assumed by most that Mirotic would come to the NBA next season, as his salary restrictions from the rookie scale will expire in late June. Basically, this means he can negotiate like a free agent, and he can hold out for as much money as the Bulls will pay.

His rookie scale contract would have paid him just under $5 million over the first four seasons, Mirotic is sure to command more than that in his first season in a Bulls uniform. Which is fine, as the Bulls will be able to offer him the Mid-Level Exception next summer, which will pay him $5.305 million his first season.

(Technically, the Bulls could get under the salary cap next summer and offer Mirotic a little more money, but it's not going to happen.)

The problem in this situation is Mirotic's buyout with Real Madrid, which is said to be 2.5 million Euros ($3.44 million by the current exchange rate). The Bulls are limited to paying $600,ooo of the buyout, which leaves $2.84 million that Mirotic will have to cover.

The Bulls can give Mirotic a signing bonus to cover the rest of the buyout, as was conveyed in a series of tweets by Mark Deeks:

Mark Deeks ‏@MarkDeeksNBA 1hTwo things to remember about the Mirotic situation: 1) Next summer he will no longer be bound by the rookie scale. The rookie scale only...

Mark Deeks ‏@MarkDeeksNBA 1h...applies if you sign within 3 years of being drafted. 2) Contrary to common myth, NBA teams can pay as much of a buyout as they like.

Mark Deeks ‏@MarkDeeksNBA 1hThere is however an amount - $600k in 14/15 - over which any amount spend on the it counts against the cap in the form of a signing bonus.

Mark Deeks ‏@MarkDeeksNBA 1hAmounts over that $600,000 come out of the salary, hence the need to have them in a signing bonus. The buyout can still exceed it, though.

This is all technically correct, but Deeks leaves out two details:

1- Teams can "pay" all of a buyout, but a signing bonus can only be 15% of the total value of the contract. Any money above that amount comes out of the first-year salary of the player, so really it's the player paying his own buyout.

2- When a player gets a signing bonus, the overall value of the contract goes down slightly (due to the way the bonus is calculated for salary cap purposes). It's not a huge decrease, and I'm sure financially it's a great trade-off for getting all that bonus money up front, but it does exist.

So while the team technically "pays" the buyout, the money comes from what they can pay the player, so really it's the player paying the buyout.

Mirotic is very well paid in Europe, maybe he doesn't want to come to the Bulls yet if it means giving up $2.84 million out of his first 3 years' salary? Maybe he waits until the summer of 2016, when his buyout is gone?

It's unlikely, as the sooner he gets to the NBA, the sooner the Bulls will have his Bird Rights (after 3 seasons) and they will be free to pay him any amount of money when his first contract expires.

The Bulls will, however, have to give Mirotic a 4-year contract if they want the signing bonus to cover the entire buyout. The maximum signing bonus on a 3-year full MLE contract is about $400,000 short of $2.84 million, but a 4-year contract (even if the 4th year is a player option) would put the bonus over $3 million.

All things considered, I still expect to see Mirotic in a Bulls uniform next season.

 

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