Portland's salary situation going into the free agent period

OK, there's been some talk about this topic in various posts so I thought I'd try to consolidate all the bits of information.  The new salary cap year starts on Thursday, July 1st.  Understanding where the Blazers are at salary-wise will, I hope, keep the discussion about possible moves at the highest possible level of excellence.  I want to paint this picture in two ways, utilizing the two major issues having to do with cap-onomics.  Here we go:


Issue #1 - Will the team be above or below the salary cap?

Assuming that Joel Przybilla does not utilize his Early Termination Option, Portland will have 11 guaranteed contracts on the books once the new salary year begins on Thursday:  Brandon Roy, LaMarcus Aldridge, Marcus Camby, Joel Przybilla, Andre Miller, Greg Oden, Jerryd Bayless, Rudy Fernandez, Nicolas Batum, Dante Cunningham and Jeff Pendergraph.  These 11 represent approximately $62.25 million in salary (I say approximately as the precise amount of Roy's salary won't be known until July 7th when the league releases the new figures for the year - until then, I think this is a pretty good guess).

Ryan Gomes was waived by the team, although his contract was partially guaranteed for $1 million in 2010-11, so that amount counts against the cap.

Additionally, there will be several cap holds for various players who are not currently under contract.  These cap holds only count from July 1st until the start of the regular season, but they do count, so we have to take them into consideration.

To start with, Portland has two unrestricted free agents (Juwan Howard and Travis Diener) that will each count against the cap in the amount of $854,389 until they are re-signed by the team, renounced by the team, or signed by another team.  If they are re-signed by the Blazers, their new salary amount is the amount that counts against the cap.  If they are either renounced or signed by another team, their hit against the Blazers' cap becomes zero.

Portland also has one restricted free agent in Patty Mills, whose cap hit will be the amount of his $937,195 qualifying offer.  He, too, will count as this amount until he is either re-signed by the team, renounced by the team or signed by another team.

The Blazers also hold the draft rights to five unsigned first round draft picks.  The hit against the cap for each of these players is 100% of their rookie scale amount, which is based off of their draft position.  So

  • Luke Babbitt will count as $1,371,200 against the cap
  • Elliott Williams will count at $1,045,600 against the cap
  • Victor Claver will count as $1,045,600 against the cap
  • Petteri Koponen will count as $850,800 against the cap
  • Joel Freeland will count as $850,800 against the cap

The grand total of all of these salaries and cap holds is approximately $71.06 million.  As I said earlier, the exact details of Roy's contract might shift that number slightly.

Back in April, Commissioner Stern made an announcement that the league anticipated a salary cap figure of $56.1 million, so the Blazers look to be well over the salary cap once the July Moratorium is lifted on July 8th.  So, in terms of trying to sign free agents, the Blazers will initially be limited to using exceptions to sign players - the Mid-Level Exception (which will probably be an amount slightly less than this year's $5.854 million), the Bi-Annual Exception (set at $2.08 million) and the Minimum Player Exception which allows teams to sign players for the minimum amount allowable by the Collective Bargaining Agreement for that player (it differs from player to player, depending on how many years of NBA service they have)


Issue #2 - Will the team be above or below the luxury tax threshold?

Another important issue, as the team was below the threshold this year (2009-10) and avoided having to pay any tax.  I think it goes without saying that although Paul Allen might be willing to pay tax next year, he'd prefer not to.  So let's just see where the team stands.

The aforementioned 11 guaranteed contracts for $62.25 million will go into the calculation of whether or not the team is above or below the tax threshold, as will the $1 million figure for Ryan Gomes, bringing the running total to $63.25 million.

No other players are guaranteed to count towards the determination of being above/below the threshold line, which is anticipated to be about $68 million.  The cap holds listed above only count against the cap during the summer months and drop off when the regular season starts if the players are not actually signed to contracts.  So, right now, the team looks to be under the tax threshold and is not in danger of having to pay luxury tax next year.  But the team does need to sign at least two more players to reach the league minimum roster size of 13 (Gomes does not count as a roster player since he was waived). 

So if the team wants to stay below the tax threshold, it needs to have less than $4.75 million in summer signings.

Two signings seem nearly certain - Luke Babbitt and Elliott Williams.  As 1st round draft picks, they each look to sign for a 'standard' 120% of their rookie scale amount.  This translates to contract amounts of $1.65 million for Babbitt and $1.25 million for Williams.  If they are both signed, that would bring the total salary figure to $66.15 million for the team, or approximately $1.85 million below the tax threshold.

That would also bring the roster size to the league minimum of 13.  The team would have the option of signing up to 2 more players, but could only spend $1.85 million in doing so if it wants to avoid the luxury tax.

Which raises certain questions:

  • Will the Blazers re-sign Patty Mills?  For how much?
  • Will the Blazers sign their 2nd round pick, Armon Johnson?  For how much?
  • Will the Blazers look to re-sign either Travis Diener or Juwan Howard?  For how much?
  • Will the Blazers choose to use their MLE or BAE with the knowledge that doing so could cause them to go over the luxury tax threshold?
  • Will the Blazers try to make a trade that puts them further under the tax threshold?  Or willing to make a trade that puts them over the tax threshold?

And other questions that, I am sure, will be raised in discussion here on Blazersedge over the next few weeks and months....

Please let me know if I've forgotten something, if I haven't explained something well, or if you have any questions about all this that either I or one of the many knowledgeable board members can answer.  Thanks ahead of time to all those who assist me in answering questions.....

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