Since the Portland Trail Blazers reportedly made an attractive offer to Indiana Pacers center (and restricted free agent) Roy Hibbert on Day One of the 2012 NBA free agency period, several questions have been buzzing. Let's cover them.
Will Indiana Match the Offer?
Almost certainly. Although four years at $14-ish million per is steep you have to look at the Pacers' situation. They've played well in the last two years in the playoffs. They hope they're on the verge of a legitimate title run. They're looking to acquire talent this off-season, not lose it. How in the world would they replace an All-Star level center? Unless they've got a line to Dwight Howard or Andrew Bynum in their back pocket--either of which would cost them mightily in trade--they have to keep Hibbert no matter what the cost. Anything else would be a serious step backwards. That's not to say Hibbert is the perfect player, just a key one and nearly irreplaceable.
Why Would Portland Make an Offer They Knew Would Probably Be Matched?
That's the 14.5 million dollar question, isn't it? They must see an opening somewhere, even if it's small. Best guess is that they're pursuing the same general strategy they did in the draft: go big or go home. Better a 1% chance at the guy you really want than a 90% chance of a guy you don't like so much. The approach makes sense if the free agent cupboard is otherwise bare. If you only like Hibbert and maybe one or two other guys, you run through them in order and see who will bite. Hibbert must be head and shoulders above the rest for them. If this approach fails, there's always trades. It's not like it's Hibbert or nothing...at least not for sure.
This does bring up an interesting point, though. The Blazers seem increasingly willing to accept failure rather than half-successes. That "reload, not rebuild" mantra seems to have gone by the wayside. They're taking a big hack at an immediate reload, sure. But in the likely event it doesn't work, they seem to be OK entering next season with a less-than-optimal lineup and going for the multi-year rebuild.
Click through for talk about Hibbert's talent, the timing of offers, and salary cap implications.
What's Attractive Enough About Hibbert to Justify That Kind of Contract?
Start with 7'2", 280 lbs, 25 years old, never gets injured, and talented enough to start for a solid playoff team. He's athletic, a monster offensive rebounder, a good defender, can score inside without taking touches away from LaMarcus Aldridge. He took a while to develop, but he's a good player now. When you're that big, good nets you $15 mil per year. He'd fit well in Portland. And where else will Portland get a center of that quality?
What's the Timing on the Offers?
Teams can make offers right now but they can only be accepted officially on July 11th. Keep in mind that only one offer--the one actually accepted by the player--counts. If for some reason Hibbert accepted an offer from a different team then Portland's offer wouldn't matter. If Hibbert does sign Portland's offer sheet, Indiana has three days to decide whether or not to match it. If they choose to match it, Hibbert remains in Indiana. If not, he becomes a Blazer. We won't know what's going to happen until Hibbert officially accepts the offer and then Indiana decides or declines to match.
How Does This Offer Affect the Salary Cap?
As soon as Hibbert signs Portland's offer sheet, that amount is reserved as a cap hold against Portland's cap. The Blazers cannot spend it on other offers or free agents, nor use it to facilitate unbalanced trades. If Indiana decides to match the offer, that hold disappears and Portland's cap space comes back into play. Obviously the new contract would then count against Indiana's cap at that point, as they would have just re-signed Hibbert. If Indiana lets Hibbert go then Hibbert's new contract takes the place of the cap hold on Portland's cap.
Note that despite some confusion on this issue, the offer sheet counts only against the cap of the team making the offer (in this case Portland) not against the team considering the offer (Indiana). The offer does not count against Indiana's cap unless and until they decide to match it.
How Does This Offer Affect Nicolas Batum's Restricted Free Agency and Signing Other Free Agents?
This gets interesting, as Portland is in the same situation with Nicolas Batum as Indiana is with Hibbert.
Although the final numbers always end up the same, for purposes of different examples it's often helpful to start your discussion of salary cap numbers in different places. We're starting from a particular place and rounding numbers here for ease of explanation.
The Blazers have, give or take, around $22 million in cap space this summer. This is approximate.
$5 million of that space is tied up in a cap hold preserving the Blazers' rights to Nicolas Batum. That leaves them $17 million.
As soon as Hibbert signs Portland's offer sheet, $14 million of that $17 million will be tied up in a cap hold, leaving Portland $3 million to play with. During the three-day period that Indiana is mulling the Hibbert offer sheet, the Blazers can still use that $3 million.
Three days later the Blazers will either have that $14 million hold taken off their cap because Indiana kept Hibbert or it will become Hibbert's new contract, staying on Portland's cap.
Assuming Nicolas Batum gets an offer from another team, the Blazers will also be considering whether to match it during that same three-day period. Batum's new offer does not affect their cap during this period but the original $5 million cap hold remains. If the Blazers decide to match Batum's new offer then his contract goes on their books. If they decline it, both he and his former cap hold disappear and that money is freed up.
An example of how this works: Assume $14 million per year for Hibbert's offer. Also assume Batum gets a $9 million per year offer. Here's what this would look like.
1. Blazers start with $22 million in cap space, minus Batum's $5 million cap hold = $17 million cap space remaining.
2. Blazers use $14 million of that $17 million to make an offer to Hibbert = $3 million cap space remaining.
3. At the same time a third team makes the $9 million offer to Batum. This does not affect Portland's cap yet. $3 million remains.
4. Three days pass as Indiana mulls the offer for Hibbert and Portland mulls the offer for Batum. At the end of three days one of the following would happen.
- Indiana MATCHES Hibbert's offer but Portland DOES NOT MATCH Batum's. Neither player is a Blazer anymore. All cap holds disappear. Portland now has the full $22 million of original cap space to play with.
- Indiana MATCHES Hibbert's offer and Portland MATCHES Batum's. Hibbert remains in Indiana. His cap hold comes off of Portland's cap. Batum remains a Blazer. He now counts $9 million against the cap (his new contract amount). Portland originally had $22 million in cap space. Batum's former cap hold is now replaced by his $9 million actual salary, leaving the Blazers $13 million free.
- Indiana DOES NOT MATCH Hibbert's offer and Portland DOES NOT MATCH Batum's. Hibbert is now a Blazer, Batum is not. Batum's cap hold disappears providing the Blazers their original $22 million. But Hibbert's new $14 million contract is deducted from that amount, leaving Portland $8 million in cap space.
- Indiana DOES NOT MATCH Hibbert's offer and Portland MATCHES Batum's. Both Batum and Hibbert are now Blazers. All cap holds disappear. Portland starts with the original $22 million in space but Hibbert's $14 million contract brings that down to $8 million and Batum's new $9 million contract brings the space down to $-1 million. The Blazers are a million bucks over the cap. This is allowed because Portland holds Batum's Bird Rights.
As you can see, depending on who matches and who does't the Blazers could end up with more cap space than they started with (losing both players and their cap holds) or end up over the cap (gaining both players) or end up somewhere in between (retaining one player and losing the other).
So If the Blazers End Up With Both Hibbert and Batum, That's It for Their Acquisitions, Right?
Not necessarily. Keep in mind that the final numbers only go on the books when a team matches or declines the offer sheet. Notice Lines #2 and #3 above. The Blazers have $3 million in cap space during these stages, as offers have been made but not matched. They can spend that amount during the three-day decision period to acquire another player, then accept the new contracts of Hibbert and Batum onto their cap.
This in-between time, when holds are on the cap but not the full new contract amount, explains why both Indiana and Portland will probably take the full three days to match offers on their players. The full cap amount isn't committed until the official match happens. For the first two days you can pursue other free agents, then match the offer on your own player on the third day, going over the cap to do so. The Pacers will want to spend their available cap money before matching a $14 million offer on Hibbert which would push them over the cap. The Blazers will want to do the same with Batum.
Even after going over the cap, both teams could still make minor acquisitions using cap exceptions. The major signings would be done though.
Confused? Remember These Basics
- Portland will tie up most of its cap space in an offer to Hibbert, but will get it all back immediately if Indiana matches the offer to retain him.
- Offers can only be signed officially on July 11th.
- Indiana then has three days to match or decline once the offer is signed.
- Portland has the same three days to match or decline if Batum signs an offer sheet from another team. It's likely both teams will be making their decisions during the same three-day period.
- Both teams will probably take the full three days because they'll want to spend available cap space before putting their own player back on their cap fully.
- Depending on whether they retain Batum, Hibbert, or both the Blazers could find themselves vastly under the cap, capped out, or somewhere in between after those three days. We won't know until the time has elapsed.