Once the player is waived from a team's roster, any other team in the NBA under the salary cap can make a blind bid for the services of that player (ie, a bid where you don't know how much other teams are bidding). The team with the highest bid will get that player and pay them how much they bid, with the player's old team (ie, the team that cut him) paying the remainder of the contract. If a player is not claimed via the bidding process he will become a free agent and the team that waived him will have to pay for the entirety of what's left on the contract.
In short, the amnesty clause:
- allows teams to get rid of one big bad contract clogging up their cap space;
- allows teams under the cap (usually small market teams or financially responsible teams) to bid for a player (who was at least once worth a lot) for a fraction of what he was being paid; and
- entitles the waived player to the salary they were originally contracted to.
Now we've gotten that out of the way, the Indiana Pacers will use their amnesty on forward James Posey. The hard-nosed, once brilliant, two-time NBA Champion, not-yet-35-years-old veteran who has turned into little more than a catch and pop three-point shooter (who isn't all that accurate) and charge-taker.
By all accounts, Posey is a leader and a good presence in the locker room, but on the floor he is so single-faceted that he often becomes a liability for the Pacers. In any case, he did not play at all after new coach Frank Vogel took over the reigns and was asked not to join training camp. It was clear Posey's time in Indiana was up, and shredding his $7.6 million salary from the cap will open up more opportunities for the Pacers in the market, especially with guys like OJ Mayo, Carl Landry and Andrei Kirilenko still potentially up for grabs.
Some might say using the amnesty on Posey is a waste. After all, he was only on contract for one more year, $7.6 million is not all that much, so why not let him continue to be a 'good influence' on the end of the bench? On the other hand, given that the Pacers don't actually have any bad contracts to shed (if you discount Dahntay Jones and Brandon Rush, who don't cost as much as Posey combined), they are being aggressive this offseason pursuing good players and that Posey has almost zero trade value, getting rid of him via the anmesty provision is actually doing Posey a huge favor. Now, instead of doing nothing on the Pacers bench, he can either get claimed by a team that actually wants him and will use him, or he can go to a contender as a free agent -- without losing out on his salary.
All the best to Posey. It didn't work out in Indiana but hopefully he can find a place where he can either be utilized or have a chance to win another title.