Preaching Patience With The Amnesty Question

Whenever anyone discusses the amnesty clause in the upcoming collective bargaining agreement, Gilbert Arenas‘ name is inevitably tied to it. Yes, Arenas is hardly worth the $19.3 million salary he will make if he continues to play at last year’s 8.6-PER performance in 49 games with Orlando. Arenas had orders to lose weight, get in shape and rehab his knee. It seems he has done those things, but nobody knows how that will translate to the court.

Gilbert Arenas is going to have to prove himself in training camp and whenever Magic brass get a chance to look at him to show that the team can stick with him. What is important to remember is that, unlike in 2005, Orlando does not have to make any quick decisions regarding the amnesty provision.

The memo circulated around with the bare details of the league’s tentative agreement explains the amnesty clause this way:

“Each team permitted to waive 1 player prior to any season of the CBA (only for contracts in place at the inception of the CBA) and have 100% of the player’s salary removed from team salary for Cap and Tax purposes.”

What this exactly means is still up for debate and needs to be ironed out. Some people believe it means you can only waive a player that is currently on your roster at the time of the lockout and receive this amnesty consideration. Others believe it means you can trade for a player and opt to waive him and receive amnesty consideration. There is an ambiguity that needs to be cleared up in the final negotiations.

Still one thing is certain… teams do not have to use the amnesty provision immediately. As long as the exception is used on a contract that existed at the time of the lockout some time before the CBA expires, it is available to each team once.

No doubt, Orlando is going to be weighing whether to use their exception on Arenas or not.

Believe it or not, this is not such a cut and dry decision.

Arenas, first off, is going to make $19.3 million this year (pro-rated to 66 games… so about $15.5 million, but that won’t matter when looking at total cap number). He is the highest paid player on the roster. It sure would be nice to just erase his salary from the salary cap roll. Doing that would leave the Magic with about $57 million in salary that counts against the cap. That would leave the Magic $1 million beneath the cap this year to spend on free agents. Likely, that means Orlando would still only have the mid-level exception, but they would get the full $5 million to use on that exception.

That could help fill some of the team’s immediate needs, but as Josh Robbins of the Orlando Sentinel points out, that means the magic either have to rely on Chris Duhon as the backup point guard or give sthem another need to fill.

So, it begs the question: why not see what Arenas can give you before sending him away. The team is going to pay his full salary regardless, you might as well see what he can give you on the floor. There is also the small matter of his early termination option for the end of the year, which everyone expects Arenas to decline so he can make more than $40 million in the final two years of his deal.

Again, why not see what Arenas can offer. If he can even be a shadow of his former self, he will not be worth his contract but could be worth keeping around. You never know when some fool-hardy general manager will believe in him enough to trade for him (so whichever team hires Otis Smith next… I kid, I think). It is possible — possible mind you — that Arenas can become that perimeter scoring option the Magic need so desperately. It does not seem likely it will happen.

There is no penalty for waiting a year. In fact, you might argue it is better to wait a year.

Consider this, if Howard exercises his early termination option (which he will) and Orlando amnesties Arenas, the team will have only $37.1 million committed in salary (assuming the team exercises its option on Daniel Orton and Jameer Nelson and Brandon Bass exercise their player options for the 2012-13 seasons). If the salary cap remains at $58 million — which may or may not be likely considering the league saw an increase in revenue last year and might see a modest increase even this year — Orlando would have nearly $20 million in cap room to spend without dipping into the luxury tax.

Stay with me here. That would leave the Magic with enough room to sign Dwight Howard or another player to a maximum deal while still remaining under the salary cap and well below the luxury tax line. Or the Magic could reload, spread out how they use that cap space and find the next big free agent class to prepare for. Jameer Nelson, Hedo Turkoglu and Brandon Bass all have expiring contracts for 2014.

Maybe letting Dwight Howard in on this part of the plan can convince him to stay, maybe it won’t. But the Magic seem to be pointing toward 2014 for their next move. With options taken, Orlando will have $20.7 million of salary committed in 2014 if the team amnesties Arenas. That could be when the Magic make their big reloading or rebuilding play.

What does this mean for Arenas? I think it means that he gets his chance to prove whether he is worth keeping around. This is a 66-game audition (maybe less) to prove Orlando should keep him around. It is clear that he is a drain if he keeps playing the way he played last year. He has to show that he can be worth keeping around. And really the only way to do that is to play well enough to convince Dwight to stay or for someone else to take him.

It is not looking good for Arenas. He is going to get cut and amnestied at some point it seems unless he becomes a superstar again. When is the question. Unless the mega-deal to save Orlando comes, it seems to make sense to wait and give Arenas an opportunity to convince someone else to take his contract or show he can be a star again. It may not seem likely, but if you are paying him anyway, you might as well see what he has got.