Arguing about buyout percentages

A series of post in this thread on LakersGround.net on 8/29/07.

I started the discussion by saying:

I don't understand why Denver didn't buy out Martin's contract this off-season.

Aeneas Hunter replied:

This is speculation, but what the heck. KMart has about $59M to go on his contract. He must know that his future prospects are not very good. If I'm KMart, I'm not agreeing to a large discount on my contract. It might be the last sizable contract I ever get.

I replied:

But if he accepts a buyout for 60% of the contract ($35.4M), he gets all $35.4M now instead the $59M spread over 4 years. He can then move on to another team and draw a second salary or start on his life away from basketball. 50-60% of contract value has been the range I have seen for contract buy outs.

activeverb jumped it with:

Many of reported contract buyouts I've seen have been higher, more on the 70-80% range.

To make up a 40% paycut, Martin would probably have to find a full MLE deal, which may not happen -- or may not come from a team he wants to play for. There really isn't a reason for him to risk the money unless he really wants to leave Denver. NBA players don't like to give back money.

I did some research and then posted:

You appear to have the better memory. Recent buyouts:
Foyle 65%
Hudson 80%
Francis 88% <- That's nuts

golakersgo121 tried whacking me with:

He does have a better memory as you did not mention C-Webb's buyout (close to 100%); also 80% of Hudson's Full Value contract can be looked at differently if you consider "guaranteed value" of his contract only...

Then 88% of Fransis's contract does not look as nuts as before, does it?

I replied:

At least I have a better memory than you. Webber's buyout occurred in the middle of the season, so I left it out. The Webber buy out numbers per ESPN.com:

The exact numbers on Webber's buyout from the 76ers, as obtained by ESPN.com, show Webber surrendering nearly $6.5 million for the right to become a free agent and sign with Detroit.

Webber's salary this season and next season have thus been adjusted for leaguewide bookkeeping purposes to $17.6 million and $19 million, down from $20.7 million and $22.3 million.

That's an 85% buyout with half of one of the bought out seasons already gone by. So the 88% number still looks nuts.

I did some more research and posted:

Just to be complete, here are some other buyouts I found:
Eddie Jones - mid-season buyout for his full salary less the pro-rated vet min
Jalen Rose - last cut in training camp, got full salary
Eddie Griffin - mid-season buyout for full salary
Vin Baker - got a deep discount, but there was breach of contract issues

The trend seems to be that if a player is cut in training camp or mid-season, he gets his full salary or his full salary less pro-rated vet min. If the buyout occurs in the summer, the buyout can be from 40-80% (assuming that Francis is an outlier), with recent buyouts going towards the high end of that range.