FanPost

NBA CAP HORROR! Disappointed Free Agents and Portland's Miscalculation

Beware: There will be math.

Last summer was the year the NBA went bat-guano crazy. In the first year of the new TV deal, the League raised its payroll cap by 33%, from $70 million to 94 million. No, everyone did not get raises. All of this new money was splashed onto the free agent class of 2016. $720 million in new money was available to spend and it could be only used on about 20% of the players. NBA players who were free agents last summer got a WHOLE lot of rich! I was reminded of the scene from Caddyshack when Rodney Danger field gleefully exclaims "Everyone is gonna get laid tonight!" In the NBA it was "Everyone is going to get paid tonight!" Teams spent money like Monopoly players, desperately seeking to sign new talent from a weak free agent class with their huge cap space then went flying past the cap to re-sign their own players (sound familiar Blazer fans?). The rest of the NBA players loved it, knowing that they would get their rewards soon.

If you remember, there was talk originally that next year's cap was also going to take another huge jump to $112 million. That number shrank and shrank, and is now set at $99 million for the 2017-18 season. The 30 NBA teams have an additional $150 million in cap space for this next season, normally a huge figure. IT WON'T BE ENOUGH! The assumption that every 2017 free agent will get to double or triple their salary is false and the NBA marketplace will begin to return its own crazy version of normal.

ASSUMPTIONS OF THE CBA

One of the key features of the latest collective bargaining agreement was that superstar (max) players deserved to get paid. We will be seeing the first $30-35 million contracts to star players. But the flip-side of funneling more money to the stars is that the middle class player (the 5th starter and first 3 or 4 players off the bench) were going to see their salaries stabilize or even go down. If your "big 3" absorb $70-80 million there is not a lot of money for everyone else.

Another assumption was that franchises would see the advantages (long run) of staying under the cap until the right time to pounce. Teams that are frugal and strategic will see benefits down the road when they can rule the marketplace.

THE REALITY OF LAST SUMMER

Teams took a huge truck-load of money and spent WAY more than the "cap". Half of the league spent $100+ million. Max players had multiple suitors, and when a team was rejected they turned around and spent the money elsewhere. Players were courted and anyone with a pulse signed for big bucks and 4 years. The total league cap space went from $2.1 billion to $2.8 billion and it was all absorbed in one shot.

The problem was not the superstars. Instead it was the average player signing 4 year deals for $40 million, $50 million, or even $70 - $75 million. It was like panic buying in a hot real estate market. Sure its too much and you cant really afford it, but you will make even more when you sell. All of these contracts will look great if the cap is at $120 million in a year or two. After all, how else can small markets get or keep talent?

2017 FREE AGENTS - NOT QUITE SO ROSY

There is "only" $150 million in new money this year. Free agents like Millsap, Paul, Hayward and Griffin are going to be chased with max deals. 2nd tier stars like Lowry and Hill will go in excess of $20 million. Read any article and everyone assumes that free agents like JaMychal Green, Andre Roberson and Joe Ingles are going to suddenly become way too expensive to keep. But who has money to spend? And has the league learned not to spend money on mid-level talent? Once the top 5 - 10 free agents have signed there will not be much money left, and most of that will be with teams like the Nets and the 76ers. The spending spree of 2016 is over, and the choices of teams offering contracts will not be all that attractive. The market is returning to rationality. It is possible that we end up in a league with every team over the cap in the near future.

PORTLAND'S MISCALCULATION

Portland overpaid for Evan Turner. 2016 was going to be their last summer under the cap, and this was their last shot to pick up talent just by spending money. $5 million extra per year is the premium a team like the Blazers pays to attract talent to a small market team. This was at least a valiant attempt to increase the talent pool in Portland.

Neil Oshey's mistake was spending $37.5 million/year on Crabbe, Leonard and Harkless to avoid losing them for nothing. None of these 3 are above-average NBA players. But these contracts will be on the books for the next 3 seasons. Portland banked on continued improvement from these 3 returning free agents. Crabbe and Harkless showed glimpses of improvement, but neither took the major step forward that Portland hoped for. Leonard regressed in an injury-marred season.

Even worse, since the majority of teams overspent last summer, there is no demand for these contracts. The hope was that these deals would look sweeter and sweeter as the cap increased. Instead, the market now says that it is foolish to pay $10+ million for marginal rotation players. The Lakers had to send Russell to the Nets to get rid of the Mozgov contract. Oshey could not unload a single contract even with extra 1st round picks to dangle. These contracts will be difficult, if not impossible, to unload for the next year or two. Portland faces a future not only over the cap, but will into luxury tax territory.

THE PAINFUL SOLUTION

There have been tons of proposals to make moves involving any number of players. It MAY be that the ONLY solution is for Portland to move Lillard, McCollum or Nurkic in order to get out of cap Hell. If Portland moves anyone else, it seems like the price of doing business. But if the only way out of this mess is to move part of the Blazers' "Big Three", then we would all realize how serious Portland's cap issues really are. I hope this is not the only way out.

LAST SUMMER WAS THE SUMMER OF EXCITEMENT AND FUN. PORTLAND HAS THE CHANCE TO BE A BETTER TEAM GOING FORWARD. WHAT IS NOT CLEAR IS WHETHER THE BLAZERS CAN AFFORD TO STAY ON THIS COURSE. IN ORDER FOR PORTLAND TO CREATE A FINANCIAL FUTURE THAT MAKES SENSE, BAD THINGS HAVE TO HAPPEN. HOLD YOUR BREATH. 2017 IS THE SUMMER TO HANG ON IF THE BLAZERS CAN.