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The Portland Trail Blazers Gave Away $13 Million in Cap Space Last Summer

The Portland Trail Blazers and President of Basketball Operations and GM Neil Olshey signed superstar point guard Damian Lillard to a max-level contract extension last summer. Here's how the Blazers could've saved $13 million in cap space this offseason by putting off the extension for a year.

Kyle Terada-USA TODAY Sports

The Portland Trail Blazers will need to make some tough roster decisions this summer. President of Basketball Operations and GM Neil Olshey will go into the NBA's free agency period with about $3 or 4 million in salary cap space and will have to decide which players from the 2016 roster he wants to jettison in order to pursue free agent upgrades at key positions.

As decisions about which players to keep/let go are made, it's important to remember that Olshey and the Blazers could have had an additional $13 million if they had changed one decision last summer: Waiting until this year to extend Damian Lillard. By signing Lillard to a maximum extension in July 2015, Olshey raised Lillard's 2016 cap hit from a qualifying offer of about $10.6 million to a maximum salary of $23.6ish million. (For a quick primer on cap hits and the Blazers' 2016 cap situation, check out this article.)

Following, we answer some FAQs about this decision and its fallout.

Does that $13 million matter?

The Blazers are more than one player away from contention, as Dave Deckard outlined last week. They need to upgrade at least two frontcourt positions if they hope to vault into the upper echelon of the Western Conference standings. With no draft pick this season, and few blue chip trade assets outside of Lillard and CJ McCollum, this means hitting it big in the free agency market.

The current salary situation, however, makes that possible only if the team releases several players from last season. In the simplest scenario, the Blazers will need to renounce Bird rights to Gerald Henderson, Chris Kaman and Brian Roberts to create cap space to sign a maximum contract player with fewer than seven seasons of experience (e.g. Hassan Whiteside). To sign a second impact player in addition to the max salary player, possibly in the $14 million range (Kent Bazemore?), Olshey will need to release both Meyers Leonard and Maurice Harkless.

Now let's say that the Blazers can't lure a top-tier free agent, like Hassan Whiteside or Al Horford, and instead settle for two second-tier free agents with combined salaries of approximately $28 million. They will need to clear about $24 million in salary, which means releasing Roberts, Henderson, Kaman and Leonard or Harkless.

On the other hand, if the Blazers had waited to extend Lillard, they could sign a maximum contract free agent simply by releasing Kaman; they could have signed two second tier free agents by releasing only Kaman, Roberts and a minimum salary player; and they could have signed a max and second tier free agent by releasing only Kaman, Henderson, and Roberts.

Here's a table summarizing the scenarios (all numbers assume Lillard will make 3rd team all-NBA and that the salary cap will be around $92 million):

The bottom line is this: To make a major splash on the free agent market the Blazers are going to have to release Leonard, Harkless or both, in addition to Henderson. If they had waited they could have added two new players and retained every rotation player.

But the Blazers aren't likely to get a maximum contract free agent, so the lost cap space doesn't REALLY matter, right?

With no draft pick and an impending salary bump for McCollum and several other players, the Blazers cannot afford to sit free agency out this summer. Fortunately, being unlikely to sign Whiteside or Horford does not preclude the Blazers from being players on the free agent market. Portland has already been hypothetically tied to several players already, including Dwight Howard and the aforementioned Bazemore:

Having as much cap space as possible will be important even as they attempt to sign the lesser named free agents, and especially if they hope to sign more than one free agent.

Further, the cap space can be used to facilitate trades and acquire prospects or draft picks. Olshey demonstrated this twice over the last year by snatching a future first round pick from Cleveland in exchange for taking on Anderson Varejao's contract, and by agreeing to take Harkless from Orlando for virtually nothing. If the Blazers do strike out entirely in free agency, having additional cap space to make as many value moves as possible would have been a decent consolation prize.

Does releasing Henderson REALLY matter?

Unless the Blazers sign only one second-tier free agent, Henderson will almost certainly be released to clear cap space (see above table). But Henderson's pending departure could cause trouble for the Blazers if re-signing Allen Crabbe becomes problematic.

As a younger player with higher perceived upside, it's likely that Crabbe will demand a greater asking price on the open market than Henderson. Crabbe is a restricted free agent, so the Blazers will be able to match any offer sheet that Crabbe signs, but will have no control over the size of that offer sheet. If Crabbe receives an exorbitant offer from an opponent ($14 million?) that the Blazers are hesitant to match, then Henderson could have served as a de facto replacement for Crabbe as the team's third guard. The limited cap space, however, has made the scenario of re-signing Henderson and letting Crabbe walk significantly more complicated, meaning that the Blazers are at the mercy of other GMs to determine the price of their backup shooting guard.

Has any team ever done this before?

Other notable maximum contract candidates such as Kawhi Leonard and Andre Drummond have made similar agreements with their teams. The benefits to these handshake agreements have been tangible; Kawhi Leonard's delayed signing played a key role in the San Antonio Spurs' acquisition of former Blazer LaMarcus Aldridge. Because of Drummond's delayed extension, the Pistons will have more than enough cap space to add a maximum contract player to their roster without sacrificing a single member of their 44-win 2016 team.

The Pistons example is especially relevant to the Blazers. They are also a rebuilding team with several roster holes to fill, and were jilted last year by Greg Monroe who refused to sign an extension and departed from Detroit for Milwaukee ASAP. Despite that history, Drummond and Pistons' president Stan van Gundy maintained a united front and espoused the importance of roster flexibility. Pistons fans have embraced the decision and now stand to benefit from the foresight.

Was it even possible to wait to extend Lillard?

At this point, the argument comes up that the Blazers had no choice but to give their franchise player the maximum extension that he both deserved and demanded. However, Lillard could have signed an identical contract this summer; there was no financial benefit to extending his contract in 2015 instead of 2016. The only risk to Lillard would have been that his stock could somehow plummet dramatically this season.

But in reality, barring a Shaun Livingston-esque near leg amputation, virtually nothing could actually tank his value to that degree. He has a performance track record and durability track record that would have guaranteed a maximum extension even if he suffered a season-ending injury in November. Consider that Wesley Matthews, an older and less in-demand player than Lillard, suffered one of the worst basketball injuries imaginable and still received an $18 million contract last summer.

If Lillard still balked at the idea of holding off, Olshey could have agreed to give him the full "Derrick Rose bonus" of five percent, instead of the 2.5 percent he received, in return for delaying the extension. The bonus would not have been guaranteed, but it would have given Lillard additional incentive to at least consider delaying the contract.

What about CJ McCollum?

McCollum will be eligible for an extension this summer, and the debate around his contract will be even more complicated. Blazer's Edge will have a full article on his situation later in the offseason.

Eric Griffith | @DeeringTornado |