It never fails that each year we get new people signed up for Blazer's Edge. And most people don't know exactly how all that Salary Cap stuff works. We have all been there. At one point we have wondered why Paul Allen doesn't just go pay for the top free agents each year. But at Blazer's Edge, we've had some amazing users who had to educate us who are now veterans before we knew what was going on. (Thank you Storyteller and BFS1970!) Now I'm trying to pass that on to you. Seems only fair. And to do that, we're going to look at the 2015 offseason.
Estimating the Blazers' Total Salary
First, we must know what the Salary Cap level is. Mark Stein of ESPN wrote last week that estimates for 2015-2016 are at $67.1M, and for 2016-2017 are at $89M. Next year's number will be significant later. No team can exceed the salary cap by signing someone without using an exception. But a team may spend up to the salary cap if they are below it without needing an exception. In fact, if a team is below the salary cap, they have no need for exceptions, and will lose some of them if they are.
There are a few different kinds of exceptions. The ones the Blazers will be most interested in are the Bird Exception and the Mid-Level Exception. There is also a Bi-Annual Exception, which the Blazers will not have access to this year, and the Trade Exception, which the Blazers have none of right now to my knowledge. The Bird Exception allows a team to sign it's own eligible player, regardless of their salary cap situation.The Mid-Level Exception allows a team to sign a player, or players, using an amount that equals the NBA average salary.
Next, we must know if the Blazers are above or below the salary cap. And this is where things get complicated. To solve this, we add all the players under contract for 2015-2016. Because most contracts are guaranteed, you can't just simply cut a player, because the contract would remain on the salary cap (there are exceptions to this as well, as we will see later)
To find out how much a player is making, you need to look it up. I use Basketball Reference. Bookmark that. Please, don't use HoopsHype. Their information has historically been inaccurate. BR's was set up by our own Storyteller, who has been spot-on for years. I trust these numbers over even ESPN's. Using those numbers, here's who has a guaranteed contract, barring trade, on the roster for 2015-2016:
- Nicolas Batum - $12,235,750
- Damian Lillard - $4,236,287
- CJ McCollum - $2,525,160
- Meyers Leonard - $3,075,880
- Total - $22,073,077
That looks great, but we're no where close to done yet. We must take into account players who have player options for 2015-2016. That means the player gets to decide if they want to play under their current contract or try for a new one. The team has no say in whether the player picks up the contract or not. Here are the Blazer players who have player options, and how much the Blazers are on the hook to pay them if they stay:
- Arron Afflalo - $7,937,500
- Steve Blake - $2,170,465
Steve Blake let it be known pretty early that he planned on keeping the contract. Arron Afflalo has not make a decision.
Update: Mark Stein is reporting that Arron Afflalo is likely to opt out, despite a weak showing at the end of the year. This is not for sure, but it's not as improbable as was earlier thought.
There are also partially guaranteed and non guaranteed contracts. Those are contracts that would allow you to cut a player and not have to pay his salary. Most of the time, these are on fringe players. But sometimes, mid-level players can end up with them if offered enough up front. Here's who has partially guaranteed or non-guaranteed contracts for the Blazers for 2015-2016:
- Chris Kaman - $5,000,000 ($1,000,000 guaranteed)
- Allen Crabbe - $947,276 ($0 guaranteed)
- Tim Frazier - $845,059 ($0 guaranteed)
You might think we're now ready to calculate whether the Blazers are over the cap or not. Not yet. Because there are such a thing as cap holds. When a player's contract expires, a cap hold is placed on the team who that player played for until either the player signs a contract (with the same team or a different one) or until the team renounces the Bird Rights for that player. If Bird Rights are renounced, the team can still sign the player, but it may not use the Bird Exception to do so. Cap holds are calculated differently for each situation. This is where Larry Coon's NBA Salary Cap FAQ comes in very handy. (It comes in handy ALL the time when talking about cap stuff. Read it!) Question 38 in the current edition gives us a handy table to use. We use that, do the math with each player's previous salary, and come up with our numbers. Remember, these are cap holds, not actual salary.
- LaMarcus Aldridge's Cap Hold - $20.1M (Maximum Salary - 67.1M x 0.3)
- Wesley Matthews' Cap Hold - $10,868,460 (Previous Salary x 1.5)
- Robin Lopez's Cap Hold - $9,187,092 (Previous Salary x 1.5)
- Dorrell Wright's Cap Hold - $5,985,000 (Previous Salary x 1.9)
- Joel Freeland's Cap Hold - $5,725,673 (Previous Salary x 1.9 since Freeland was signed not using rookie scale)
- Alonzo Gee's Cap Hold - $1,185,784 (6 year Vet Minimum)
There is one more number we need. Because we have a 2015 draft pick which comes with a guaranteed contract. The base salary for the 23rd pick is $1,112,900. But it is customary for all first round draft picks to also receive the maximum bonus allowed of 25%. Making the incoming salary $1,391,125
Now we can add all these numbers up to see if we are under the Salary Cap. And we're not. Everything totals $93,416,511.
That's not under the Salary Cap. That's way over it. In fact, that is even more than the estimated 2015-2016 luxury tax level of $81.6M. It is also above the Tax Apron ($4M over the Luxury Tax line) Which is significant. Because if the Blazers are going to be $4M over, they cannot use the full Mid-Level Exception of $5.464M, and must use the lower $3.376M Exception. Also, trades must be within 125% of salary, not 150%. Additionally, the bi-annual exception is lost (though we don't have it next season), and we cannot be on the receiving end of a sign-and-trade. And, the tax penalty gets real steep, real fast, especially for repeat offenders. That said, going into the tax this year is not the end of the world. Not desirable, but not the end of the world.
But say the Blazers found a way to run just under the apron, so as to use the full MLE right up to the apron line. Good move, but there are some issues. We're not allowed to go over that apron in the same year we use the full MLE. Therefore we would be hard capped. Unable to make any moves that brought in additional salary. Such as Vet Minimum contracts, trades where we take in more than we send out. Or pretty much anything that would add any salary to the team. Those restrictions would not apply, if the Blazers only use the amount of the Mid-Level for Taxpayers Exception. But you also end up with less player.
Fortunately, we don't have to sign all these free agent players for their cap holds. Nor do we have to keep non-guaranteed contracts. We also have trades available to pursue, should we desire. However, we can't just cut everyone we can, and find a number. Because an NBA roster must have contracts or cap holds for at least 13 roster spots. If a team does not have that many players under contract, plus cap holds, then there comes in a cap hold on that empty roster spot. It is equal to the minimum salary, which for 2015-2016 is $525,093.
Trades are also another possibility. But those too have rules. If you are under the salary cap, you can make any trade as long as the incoming salary does not cause you to exceed the salary cap. The other team may still ahve restrictions based on their salary cap situation though. If you are under the Tax threshold, If the outgoing contracts total under $9.8M, the incoming contracts must be within 150% plus $100K. If you are under the Tax threshold, If the outgoing contracts total over $9.8M, but not over $19.6M, the incoming contracts must be within $5M. If you are under the Tax threshold, If the outgoing contracts total over $19.6M, the incoming contracts must be within 125% plus $100K. If you are over the Tax threshold, all contracts must be within 125% plus $100K.
Draft picks count as zero when traded. And a team cannot have outstanding consecutive owed first round draft picks. Cash can be traded, but does not count in the calculations for contracts above. Also the total amount of cash that can be transferred by any one team is $3M for the year.
So now we have defined what we can change and what we can't change. What is in our control and what is out of our control. With that, I believe we are equipped to run some scenarios.
Scenario 1 - Can we make a run at a max free agent?
Without trades, we must include the $22,073,077 of guaranteed contracts. We must include our first round pick at $1,391,125. I believe we should also assume both Afflalo and Blake opt in because as a GM, that's out of our control, adding $10,107,965. Now we need to know who we want to keep. Cap space is the goal in this scenario, so cut Kaman, Crabbe and Frazier, so that only the $1M guaranteed is on the books. That brings our running total to $34,572,167.
Now, who do we want that max free agent to play with? Aldridge seems like a no brainer to me, since he is the better than any max level free agent we could ever sign this offseason. So we add the $20.1M to the total. $54,642,167. We also only have 8 players under contract, so we need to add cap holds for the missing roster spots. It would be 5. But since we're planning on using one of those slots for another player, we can remove one. 4 x $525,093 = $2,100,372. That brings our total salary to $56,742,539.
We would have $10,357,461 in cap space.
That's renouncing every other free agent, such as Wesley Matthews and Robin Lopez. That's also not enough. Not nearly enough. Therefore, in order to make room for a max contract player, you must hope Afflalo opts out of his contract, and the Blazers do not resign him. Or be willing to forego LaMarcus Aldridge.
Scenario 2 - What does our cap look like if we bring back everyone we like?
Again we start with guaranteed contracts, our first round pick, and the players picking up their options. $33,572,167. No reason now to dump Crabbe or Frazier. For now, we will also keep Kaman, knowing that he is one of the more mobile pieces we have to work with. $6,792,335 + $33,572,167 = $40,364,502.
Even with the rampant media need to have a story, Aldridge is very likely to sign for a max contract with Portland. We will assume that he does in this scenario, using the Bird Exception. $20.1M + $40,364,502 = $60,464,502.
We will also assume that Wesley Matthews and Robin Lopez sign using the Bird Exception. But this is the number that we don't know. You may need to adjust the equation based on your own numbers. I'm going to use $10M apiece. In actuality, that number may end up higher or lower. We just wont know until it happens. $20M + $60,464,502 = $80,464,502.
Now the question is whether or not we want Dorrell Wright, Joel Freeland, and/or Alonzo Gee, and what they're worth. Now, we can only go into the 2015-2016 season with fifteen players under contract. Listed above we already have 13 players. We also have a Mid-Level Exception to use, which we absolutely should. Bringing our total to 14. We do have non guaranteed contracts, so we can cut one or more of those players to resign these. And you can do the math where you want to.
But there is one more thing to be aware of. The tax line. If we want to use the full MLE of $5.464M, we can only exceed the tax line of $81.6M by $4M. As it stands now, we're about $200K over if we want to use the full Mid-Level Exception. And if we do use the full MLE, we will essentially be hard capped. We would have to use the Tax-Level MLE in order to have any flexibility beyond the Tax Apron. And we would have to use the Tax-Level MLE if we wanted to keep everyone else, plus one of those three players.
Scenario 3 - What is your scenario?
I haven't quite figured out mine yet. I would like to keep the full-MLE, but that will take sacrificing someone like Kaman and/or Freeland. I think we could use a solid 3/4, especially if Dorrell Wright is not coming back, or we can't afford to keep him. We could use a backup PG. We could use a project 5 if we lose a couple bigs. There's a lot to keep track of. But hopefully this can help give you a start in knowing where the boundaries lie.
As Draft Day and the start of Free Agency approaches, Bedgers will be referencing these NBA rules a lot. So don't be afraid to spend some time studying up on these. It's not like you were getting any work done anyways.
If you find errors in this, or think something needs clarified better, please include that in comments below. Thanks!