When a player is bought out, the team still takes a cap hit for the player over a period of twice the remaining length of the contract. The amount of the cap hit (by year) is determined as follows:
Take the actual salary due for each remaining year Take the Averaged Player Salary (cap hit) for the current contract Calculate the buyout amount (as described above) Spread the buy-out amount evenly over twice the remaining years of the contract Take the number in No. 1 and subtract the number in No. 4. This is the “buyout savings.” Take the cap hit from No. 2 and subtract the buyout savings from No. 5.
This calculation is done for each year, meaning the buyout cap hit is not necessarily the same for all years. It can even be negative, meaning a team can receive a credit.