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The Business End of the Offseason

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Portland Timbers v Seattle Sounders Photo by Otto Greule Jr/Getty Images

It’s been quiet. Awfully quiet.

Have-little-but-DUIIs-and-a-lost-season-to-talk-about quiet.

Well, almost. There was the report of Darlington Nagbe visiting Celtic. And then there was the well-timed kit leak. Oh, and the preseason schedule came out.

But the bombshell of the offseason thus far has been last week’s revelation that Ben Polk — hitherto thought to be a Timber — has signed with Orlando City B.

Let’s look at that kit leak again, shall we?

Nice.

But it won’t be quiet much longer.

The business end of the offseason will begin en masse on Sunday morning, just hours after MLS Cup. Which, with any luck, means the morning of December 11 will bring to a close the days of the Timbers’ Twitter handle subsisting off of FIFA video-game highlights.

Sunday, December 11th will bring a three-hour trade window between 6:00 and 9:00 a.m. that promises to be chaotic as teams rearrange their rosters before submitting their expansion draft protected lists. In addition on Sunday we will likely — at long last — receive the Timbers’ list of personnel moves from the 2016 roster including options exercised, options declined, players re-signed, and players who are out of contract.

The next day the league will release each team’s protected list as Uniteds Minnesota and Atlanta prepare for the expansion draft at 11:00 a.m. on Tuesday the 13th. And by 2:00 on the 13th it will be open season on MLS free agents.

And at that point MLS’s parade of obscure offseason acquisition mechanisms will be in full swing.

Before any new arrivals for the Timbers, however, will come the departures. With Sunday on the horizon, therefore, it is worthwhile to take a stroll through the ways the Timbers may part ways with various players, and the consequences of using those various mechanisms.

It’s not going out on a limb to predict the Timbers won’t be bringing everybody from the 2016 team back for 2017. So before the Timbers can plan to add players, they’re going to have to find a way to separate from what will likely be at least a healthy handful of players while maximizing salary-cap room in 2017.

In many instances, this is easy. In light of how common club options are in MLS contracts, parting ways without any residual cap consequences is often straightforward. If a player is either out of contract or on a club option, the Timbers can simply walk away scot-free of any ongoing cap consequences.

But, especially after a disappointing season like the Timbers’ 2016, a team will often want to part ways with a player that it has under a guaranteed contract for the next season. This is where it gets a bit trickier and where general managers earn their paycheck. There are, of course, several ways of parting company with a player under contract for the following season: (1) transfer or loan outside of MLS, (2) intra-MLS trade, (3) mutual termination of the contract, and (4) a contractual buyout.

Each of these mechanisms differs in important respects. Obviously, any team’s first preference would be to trade, transfer, or — in many circumstances at least — loan a player because the club receives compensation in return.

If a trade, transfer, or loan isn’t possible, then the team has to try to part ways with the player while eliminating — or at least minimizing — the ongoing cap hit.

Mutual termination of the contract is, of course, an attractive option for a club as it eliminates any ongoing cap hit. The problem, of course, is that the player also has to be willing to walk away from his guaranteed money. This happens in some situations (e.g., where an international player wants to return to his domestic league and is willing to take a pay cut to do so), but when a player is unwilling to walk away from the guaranteed money a mutual termination isn’t an option.

Similarly, a team can buyout a guaranteed contract. A buyout can be either the full amount of the wages owed under the contract or a lesser amount negotiated by the player and the club. In general — with one major exception we’ll discuss in a moment — the amount of the buyout stays on the club’s salary cap. So if a player is owed $300,000 the following season and the club and player agree to a $100,000 buyout, that player will count as $100,000 against the team’s salary cap the following season.

The exception to this, however, is what has colloquially come to be known as the “amnesty clause” (so dubbed after a similar one-time provision in the NBA’s 2005 collective bargaining agreement) whereby once per offseason a team can buy out a player and not have the buyout amount count against the following season’s cap. Thus, with our example above, the team would still have to pay the $100,000 buyout amount, but it wouldn’t count against the cap.

How does all of this apply to the Timbers? Well, it’s hard to say with any precision because we know very, very little about most of the 2016 Timbers’ respective contracts.

We do know, however, that Lucas Melano is under a guaranteed contract for another two years, a contract that Gavin Wilkinson and company seem likely to want to be out from under.

Given Melano’s youth and talent, it seems very possible that the Timbers could trade, transfer, or loan Melano, even if the Timbers would likely take a substantial loss on the now-famous $5 million transfer fee that Portland paid for Melano in 2015 in doing so. Any of those options, as noted, would be better that buying out or reaching a termination agreement with Melano because the Timbers would get some sort of value in return.

Moreover, if the Timbers go the buyout route with Melano they would almost certainly have to use the amnesty clause to wipe out the residual cap hit. Transferring, loaning, or trading Melano, therefore, would keep the Timbers’ amnesty powder dry for another player who they may have the buy out (*cough* Steven Taylor *cough*), or they can find another creative use for the amnesty clause to further free cap space for potential additions.

It’s important, therefore, to pay attention to the details of how a player departs because the groundwork for the rest of the offseason is frequently laid in the minutiae of the initial partings of ways.

So say goodbye to the quiet of October and November. And welcome to the business end of the offseason.