Salary Cap for Dummies: Hood, Curry, and Kanter

You practically need a law degree and MBA to understand all the nuances of the NBA’s arcane salary cap rules. I have neither so, naturally, I’ve compiled an FAQ about the salary implications of the Trail Blazers deadline moves for Enes Kanter and Rodney Hood.

My pledge is that, in place of expertise, I can offer the most easily decipherable summary of salary cap implications on the Internet. Here we go.

What did acquiring Kanter and Hood do to the Trail Blazers’ luxury tax payments?

Before signing Kanter, trading Rodney Hood for Nik Stauskas and Wade Baldwin, and swapping Caleb Swanigan for Skal Labissiere the Blazers had a total salary this season of $131,638,624. Now they’re sitting at $132,346,020 — an increase of $707,396.

For every dollar of salary over $123,733,000 NBA teams pay a tax of $1.50. For every dollar over $128,733,000 they pay a tax of $1.75. The Blazers are about $8.6 million over the tax line.

Thus the net increase of $707,396 raised the Blazers’ luxury tax bill by $1,237,943 ($1.75 x $707,396) to about $13.8 million.

That’s No. 4 in the NBA behind only the Raptors ($17.6 million), Warriors ($50.3 million), and Thunder ($58.4 million).

Why did they trade for two centers? What does this mean for Skal Labissiere?

The Blazers swapped Caleb Swanigan for Skal Labissiere minutes before the trade deadline and then signed an additional center, Kanter, only days later. Adding Kanter to the team all but guaranteed Labissiere will see almost no playing time this season. So why make the move? A possible motive lies in the payroll — Labissiere has a cap hit of about $200,000 less than Swanigan this season. Swapping the two players saved the Blazers about $350,000 in taxes (1.75 x $200,000).

Next season Swanigan’s contract is about $330,000 less than Labissiere’s, which may have appealed to the Kings who are looking to be free agent players this summer. The Blazers, meanwhile, will have a year to re-package Labissiere and get out from under his 2020 tax obligation.

Both players might get a change-of-scenery boost, of course, but it’s important to note that the small salary difference benefited both teams and could have been a major motive in the trade. My guess is that the Blazers made the trade more for financial reasons than on-court reasons.

Will the Blazers be over the salary cap this summer? If so, what can they do to add players to the team?

The Blazers already have $126 million in guaranteed salary next season. The salary cap will be set at about $109 million and the luxury tax will be set at $132 million, according to early reports.

That $126 million guaranteed salary does NOT include a first round draft pick, or free agents Al-Farouq Aminu and Jake Layman. Assuming the Blazers intend to re-sign those players and use their first round draft pick they will quickly jump over the $132 million luxury tax line and the $138 million “apron.”

As a team over the apron, the Blazers will only be able to add players to their roster this summer using the taxpayer mid-level exception (TMLE) of roughly $5.7 million or with minimum salaries.

With that being said, the Blazers could choose to release Aminu and/or trade some combination of Evan Turner, Maurice Harkless, and/or Meyers Leonard to get below the apron and open up larger exceptions to sign players. It’s unclear if that will happen — they seem attached to Aminu and trading Turner/Harkless/Leonard may be costly — but it’s important to note it’s technically a possibility.

We’ll re-do the math if that happens, but for now assume the Blazers have only $5.7 million or minimum contracts to offer free agents this summer.

Can the Blazers re-sign any of their free agents (Kanter, Curry, Hood, Aminu, Layman)?

Simply put, Layman and Aminu have been with the Blazers for several seasons so Portland can offer them new salaries despite being over the salary cap. Aminu will be an unrestricted free agent and can choose his own team, but since Layman is coming off his rookie deal he will be a restricted free agent and the Blazers will have the option to match any contract he signs with another team and keep Layman on the roster.

Tl;dr: It’s no problem for the Blazers to keep Aminu if both sides agree. The Blazers will have the option to keep Layman no matter what.

Kanter, Curry, and Hood, on the other hand, have not played multiple seasons with the Blazers and thus Portland cannot offer them new salaries without using salary exceptions because the team is over the cap.

The Blazers can use the aforementioned (TMLE) to retain any combination of the three but it’s unlikely they could keep all three players, or even two, with less than $6 million. The TMLE can be split between multiple players.

So unless general manager Neil Olshey sheds salary and lets Aminu walk away this summer it’s highly unlikely we will see all three of them return.

What happened to the Noah Vonleh trade exception?

Olshey let the Noah Vonleh TPE expire because ...reasons? He had an option to use the Vonleh TPE to acquire Hood and generate two new TPEs by sending Baldwin and Stauskas to the Cavaliers in separate transactions, but instead chose to make a straight trade of the three players. Baldwin and Stauskas would have only generated minimum salary TPEs, which have extremely limited utility, but it’s still interesting that the Blazers opted to pass.

Any other salary questions? Let us know in the comments!