Why Portland’s Financials Matter

Today’s edition of the Blazer’s Edge Mailbag explores the salary situation of the Portland Trail Blazers and their prospects for improvement over the summer. If you have a Trail Blazers-related question, send it along to blazersub@gmail.com!

Dear Dave,

You and some others have made a deal out of the cap this summer but I don’t get it. Why should anybody be worried about spending billionaire [owner Paul] Allen’s money? Also if we need space several contracts are tradable. Can’t we just dump a player or two and forge onward? Who wouldn’t want free Crabbe?

Beaverton Keith

In order to understand why the Blazers are facing a delicate task ahead of them, we need to start with a pair of assertions:

1. They need to get better. As good as their late-season surge has been, I think we can all agree that “8th Seed and Out” is not the ultimate goal. Even if you speculate they’re better than that with Jusuf Nurkic and can sustain good play over the course of an entire season, they’re not in serious contention yet.
2. They need to save money. It’s not just about staying in the black (which is an important consideration for any franchise, by the way).Formally and informally, the luxury tax inhibits a team’s ability to make moves. League rules reduce trade and signing options for teams over the threshold. Common sense also plays a role. A player that looks good at $15 million a year becomes unpalatable when his real cost is tripled because of tax penalties. Would you pay $14 million for Mason Plumlee? Perhaps. Would you pay $45 million for him? Nope. When the numbers are that high, the franchise can’t buy.

Note that the combination of needing to improve while saving money is usually a hallmark of teams that have passed their championship window. It’s not often seen in young teams. Typically teams that need to improve also have money to spend. They look to sign veteran talent or make an unbalanced trade of cheap, future assets for rotation-ready players. Last summer’s signing spree put a kibosh on that for Portland. Considering their age and level of accomplishment, the Blazers are in nearly-unprecedented territory with their salary rate. Any serious way out of the quandary has to involve improvement and frugality. That’s a tough ask.

It may be, as you say, that the Blazers could dump off a couple role players for little or no return. Then again, that may not be as easy as it seems. The Blazers cannot take on salary—or at least not long-term salary—in return, else they’d end up with the same cap total and wouldn’t really solve the problem. If they want to send out significantly more salary than they take in, they’d need to find a trade partner with cap space available to absorb Portland’s players wholesale without sending anything back.

Teams that value role players highly enough to make such a move tend to be those already in contention, needing a “missing piece” to get over the top. But teams in contention generally lack cap space available to absorb salaries.

Conversely teams with acres of available cap space usually want to spend it on clear difference-makers. If Portland’s role-players are difference-makers, why aren’t they making that kind of difference right now?

But even if we posit a team or two willing to make that kind of trade, daunting cap numbers argue against its utility from Portland’s perspective.

• Next year’s salary cap projects around $102 million, leaving the luxury tax line around $123 million (give or take).
• The least the Blazers are on the hook for right now is $133 million.
• Portland would need to dump approximately $10 million in salary for nothing just to get below the tax threshold next season.

That would get them out of exorbitant overpay territory for their current roster but would leave them unable to make further salary-accruing moves without heading right back over the tax line. The problem isn’t just the capacity to dump a salary, it’s that they could dump a salary (or several) and still be far enough over the cap line that they wouldn’t see positive results from that move outside of the ledger.

Making a relatively modest $10 million free agent offer would necessitate the Blazers reducing salary to $92 million. They’d need to shave $41 million off of their payroll, receiving nothing in return, to get there. And that’s only if they don’t take on a dime more in salary in the meantime. Otherwise the number goes up. At that point you’d have to ask if all the players they’d need to dump to reduce salary by $41 million would be made up for by a bunch of second-round picks and that single, $10 million free agent coming in. They might be fulfilling the “saving money” end of the deal, but Point #1, improvement, would remain unfulfilled.

Here’s the fun part: this doesn’t get better. Technically Portland’s 2018-19 obligation is below the tax line (not the cap line) BUT that doesn’t account for re-signing Nurkic. Portland’s shiny new center will become a restricted free agent that summer. If you assume Nurk remains in the fold at a fair market price, Portland zooms right back over the threshold by tens of millions again.

Finding a way through this quagmire won’t be easy. Nothing is impossible, though. Maybe the Blazers can find a way to solve both financial and talent deficits at once. Realistically they might have to settle for addressing one or the other. They might be forced to choose between improving via trades that maintain a salary level way above the theoretical max and moving closer to financial viability while praying that a reduced version of the lineup they have will be enough to get them to the top. Neither one is ideal, but there we are.

Keep those Mailbag questions coming to blazersub@gmail.com!

—Dave blazersub@gmail.com / @Blazersedge / @DaveDeckard