Impact of the Steve Francis Buy-Out

The Blazers bought out Steve Francis, allegedly for around $30 million. Some Blazer fans are mad because (a) the Blazers didn't manage to talk Francis down very much, and (b) $30 million is a ton of money to pay somebody to play against the Blazers. I can't really refute either of these arguments, but it looks to me like the Blazers really didn't want Z-Bo or Steve Francis anywhere near the team next year.

Here is my calculation of how the Francis buy-out will affect the Blazers' salary cap:

Francis was owed $33.6 million over the next two years. I'll estimate the buy-out amount to be $30.5 million. The $30.5 million will hit our cap in the next two seasons in the same proportion Francis' salary would have been paid under his contract - around 48.8% this year and 51.2% next year. But we also get a set-off for his new contract. If Francis signs with the Clippers for $6 million for two years, the Blazers' cap liability will be reduced in each of the next two seasons by 50% of ($3 million minus the league minimum salary). This probably works out to about $1.1 million in cap reduction for each of the next two seasons. So Francis will hit Portland's cap for approximately $13.8 million in 2007-08 and $14.5 million in 2008-09.

The buy-out saves the Blazers at least $5 million over the next two years, and possibly as much as $10 million (because of luxury tax), depending on the Blazers' final cap figure. There is no chance that the Blazers will get under the cap before 2009, but Paul Allen saves a few bucks.

Jason Quick had a note in his blog that Portland has negotiated a 50% offset on Francis. I'm not sure what this means... but perhaps the Blazers are going to get a slightly larger offset than the one I calculated.