Reality and the Salary Cap
by King Coebra on Jul 16, 2010 11:57 PM EDT
Email
PrintLike myself prior to educating myself over the past month, Paul Pierce clearly has no idea how the salary cap works and the limitations that the team had to face going into this offseason.
Like many, I was hopeful the C’s could upgrade and get younger in the offseason. I figured that if Ray Allen was not resigned that would free up ~$19M per year which I wanted the team to use in pursuit of Dwyane Wade. I figured that Wade would sign with us for that, immediately put himself in a position to win additional championships and the future with he and Rondo manning the guard positions for the next 5+ years would be exceptionally bright.
It was a very hard reality when after reading and researching the topic I realized that due to the salary cap, this personal dream scenario had absolutely no chance of working. Clearly there are many here in the same boat as I that don’t clearly grasp the reality of the salary cap situation.
Here is my modest attempt at trying to clear up some of the confusion.
The salary cap for the upcoming season is ~ $58M.
Players that were under contract before free agency began:
Rajon Rondo: $9M
Avery Bradley: $1.4M
Kevin Garnett: $18.8M
Glen Davis: $3M
Kendrick Perkins: $4.1M
Rasheed Wallace: $6.3M
For these 6 players, The Celtics are on the hook for ~$43M. Those contracts cannot be renegotiated or lowered in any way. You would think that would leave them approximately $15M in cap space to sign a big name free agent. Unfortunately that is not the way the NBA salary cap works. All NBA teams are assessed something called a cap hold for all of their free agents. Not sure why they do it, but they do, and because of it, the Celtics were/are way, way over the $58M cap.
The only way to get around the cap holds are to renounce your rights to the free agents which means you no longer have the ability to sign those players for anything other than the vet minimum (I think that is correct – if not please feel free to correct me.) In other words we would not have been able to resign Pierce or Allen or Robinson to reasonable contracts and they all would have left, retired or had to sign for next to nothing. Additionally, we would not have been allowed our MLE because we would have been under the cap.
What does that mean? Well, we MIGHT have been able to sign a Wade or a James for $15M although the odds are remote. IF we could have signed one of them we would then have had 7 guys on the roster taking ALL of our cap space. One of them, Perkins, is going to be out for an extended period of time. The other, Wallace has strongly hinted at retirement. That leaves us 5 players and nothing but vet minimum contracts to fill out the roster with.
Knowing this, Ainge and the FO have done everything they can to bring back their own players in order to assemble the most competitive roster they can to compete for the next several years, as the league allows teams to go over the salary cap to resign their own players. I’m sure you’ve all read about them – things such as "Bird Right’s" and "non Bird RIghts", etc.
Additionally, because the team is over the cap the league allows a "mid-level exception" which as everybody knows was used to bring in Jermaine O’ Neal.
So, essentially, for the $15M in cap space the team would have had at the start of free agency if they had renounced all of their free agents, the team has already added Paul Pierce, Ray Allen, Nate Robinson and Jermaine O’ Neal. They additionally still retain their "Bird" and "non-Bird" rights to the likes of Daniels, Scalabrine and Finley and can either sign said players or sign and trade players if they can find a willing partner.
What this off season really boils down to is which would you rather have?
1. Rondo, Garnett, Perkins, Davis, Bradley, Wallace, MAYBE Wade or James, and 6-8 vet minimum players. (7 players – one injured and one possibly retiring)
2. Rondo, Allen, Pierce, Garnett, Perkins, O’ Neal, Davis, Robinson, Bradley, Wallace, Erden, the possibilities of signing or sign and trades of Daniels, Finley and Scalabrine and 1-3 vet minimum players (10-11 players and some flexibility with the remaining players from last year’s roster)
3. Scrap the team and start from scratch - which is essentially what option 1 is since none of the big name free agents are going to join a team with 6-8 vet minimum players (6 players, 1 injured, 1 retiring and ~$15M to fill out a roster)
Can you imagine how dismal the team would be had the FO opted for option #1 and it had backfired? Rondo, Garnett, Davis, Bradley, and only $15M to fill out the roster? I think it’s pretty clear Ainge and the FO have done the right thing this off season by selecting option #2 based on the fact they only had $15M available to start the free agency period.
Thank you for again assembling a team that has a chance to compete on a nightly basis Mr. Ainge! I for one truly appreciate it.
Be respectful and keep it clean. Thanks.
42 comments
|
0 recs |
Do you like this story?
Comments
Caught between a Rock and a Hard Place
Due to his decision not to trade the expiring contract of Ray Allen at the last trading deadline, a correct decision with the benefit of hindsight, Ainge is caught between a rock and a hard place.
Even if we were to renounce all of our free agents, we are just short in our ability to offer a maximum contract. In my opinion, the only two players worthy of a maximum contract in the present offseason are LeBron James and Wade. If we fail to get LeBron James, we would be blowing up our roster that came so close to Banner 18.
So, Ainge decides to stay put and reload for another run in 2010-1. Apart from the MLE and Rasheed’s contract, the strategy is to resign our free agents to two year contracts, so that in case we falter next season, these expiring contracts would become most useful trading chips in 2011. The main glitch is not that TA botched for Memphsis, but the resigning of a declining Pierce on a four year contract. While we can easily overcome the contributions of a role player, Pierce had the proverbial gun to our heads by opting out of his contract. If we had failed to resign Pierce, we might as well begin an extended rebuilding process that would only truly start with the trading of Garnett’s expiring contract in 2011.
even had we traded Ray's contract
would we really be in any better situation?
We would have had to trade it for a replacement SG – we do not have a starting caliber SG (especially championship team-caliber) on the roster other than Ray. So if we traded him, we would have had to get one in return. That guy would be … what? Younger? Probably. Better? Well, only a few starting SGs in the NBA were actually better and more valuable than Ray last year and chances are slim whomever we got would have been one of them.
So where would we be? We would not have Ray as a Bird-Right FA. Instead we’d have a younger, not quite as good SG under contract, perhaps for less money. But we’d still be way over the cap.
So you have to ask – what is the benefit of that? This virtual guy would have been younger, yes. But would he be one of the guys you want to build your post-Big 3 future around? And if not, would he be good enough to make another run at a championship with? Better than another year with Ray?
There really weren’t a lot of trade scenarios put forth up to the deadline that looked like they were going to leave us with an improved SG situation. Just younger.
We are better off not trying to buy youth on the cheap while our spending power is so limited. Better to put all our eggs into winning now. Later, when all of our big contracts expire, our buying power will be better and that will be the time to try to buy a stronger, better quality future.
My bet is the same posters who REPEATEDLY suggest Get Melo, Sign LeBron, and We Need Dwight Howard will not read this thread, any more than they read the amazingly patient posts of Chris and Nickagenta who each thread point out the impossibilities. Nor have they ever, or likely will, read the insightful threads Chris generates each season laying out the implications of the CBA and the limits under which the Celtics will be laboring. In fact in the time it took to write this comment, or read the original post, these folks will have started two new threads about Get Joe Johnson, or Danny needs to sign a star wing and a star big man. For some apparently reading requires a lot more thought than writing.
Agreed
Still fairly new around these parts. I definitely notice a recurring theme around here with regards to the lack of understanding of the cap and can understand it too as it is a bit difficult to understand. In addition to the folks you mentioned I also would thank a couple of regular posters – mmmmm and Stanford Fan – who seem to be fairly well versed in the workings of the salary cap and whose posts have helped me better understand how the finances as it related to the salary cap of the league actually work.
by King Coebra on Jul 17, 2010 11:07 AM EDT up reply actions
You're welcome...
I’m actually a Lakers fan, but the posts up here this off-season are much more interesting from a pure NBA perspective because of the questions that Boston has been dealing with. The team has an elite, but aging core and is over the cap. If the team were lousy, you simply dump salary and start over. If you’re young, you re-build. But if you’re elite, but getting older, should you start over or go for it a couple more years?
I think the latter makes the most sense given the cap realities you’ve laid out so well….
by Stanford_Fan on Jul 19, 2010 2:39 AM EDT up reply actions
Yeah, I agree.
The tight rope to walk is going for it … but still set yourself up to rebuild immediately after those ‘couple years’.
I think DAs been doing a good job the last couple of years. Finding veterans who can help win now without creating any long term commitments past 2012.
Wade is to selfish
If u ever saw a celtics /heat game wade was all they got and he was a ball hog and so they called the heat wades team celtics should never go after selfish players they need people that can score off the bench .
Like I stated in my original post
I was dreaming a bit following the game 7 loss to L.A. and thought Ray might just hang them up after his sub par Finals performance. Not understanding the implications of the cap, I figured the savings of $19M per year (from Ray’s contract) might be enough to entice the most complete 2 in the game to join our franchise and also get younger in the process. Like many around here I did not understand the implications of the salary cap and have had to take considerable time trying to figure it out this off season. It’s still hard for me to believe that the most cap room we could have cleared prior to the start of the offseason without moving any of the 6 pieces we had under contract was a mere $15M.
by King Coebra on Jul 17, 2010 11:03 AM EDT up reply actions
Yup - and its amazing how fast that 15M gets eaten up.
Just JO & Nate’s contracts combine for over 10M.
Yes, Most People Don't Understand...
That if Boston were going to have a shot at ANY of the free agents that everyone is complaining about their not getting, the Celtics had to decide to dump KG’s contract and start over.
Once DA decided not to dump KG (or perhaps he tried and found out that he couldn’t get value for him), then the next best option was to build around the current, aging roster for a couple more runs and then try to land a marquee free agent when KG’s contract expires. That looks like the plan that he is pursuing.
2012
Even though the Mayan’s forecast the end of the world. I’d like to know your thoughts on what the cap situation will be then. Albeit it is a bit early to be looking ahead 2 years, but this summer’s moves are about that summer and the following three years.
King Coebra feel free to pipe in as well.
Here's what I know
Since I can’t predict what will happen next year with regards to the new CBA and potential (likely?) lockout, all I can give you is a few numbers. Right now the C’s are only on the hook for Rondo and Pierce with a team option for Avery Bradley should he pan out in the next couple of years.
Rondo: $11M
Pierce: ~$16M (could be less if his contract is front loaded and decreases each year)
Bradley: $1.6M
Totals would be between $25M and $29M depending on the structure of Pierce’s new deal and whether or not Bradley turns into a keeper. Right now the cap is at $58M.
by King Coebra on Jul 18, 2010 12:05 AM EDT up reply actions
Well, its not possible to know exactly what the new CBA rules will be like.
The word is that the owners won’t bend unless salaries are tightened down – so that suggests that the salary cap (which is calculated based off a percentage of the prior year’s revenue numbers) will use a lower percentage in the calculation and thus be somewhat lower.
It is hard to anticipate it being freakishly different – probably a few percentage points different which is small at the immediate level but adds up in the aggregate.
So while today’s CBA might call for a 56M cap, the new cap might be, say 52M. The thing is, even if the percentages are smaller, if revenues go up, the actual cap number could still be higher. So its a moving target from here.
Now, the only contracts the Celtics have that go past 2012 are Rondo’s, Paul’s & Bradleys. We don’t yet know the payout schedule for Paul’s 61M contract. If it is evenly distributed, then the last year could be 15.25M. If it is back-loaded, it could be just over 18M. If it is front loaded (the ideal situation if they are thinking about the future) then his last year payout could be just a hair over 13M. The 3rd year payout would be right around15M.
Let’s assume an evenly distributed payout. That puts our obligations in our Paul’s 4th year for these three guys right around $28M. So that would leave (in the 52M cap scenario) around 26M in cap space.
That doesn’t sound like much, as it is only enough for one max guy and at most 2 mid level guys plus a bunch of minimums.
HOWEVER, there are alternative scenarios. We could very easily reach those years still well over the cap. How? Well, if every contract that Danny signs is expiring in 2012, then he has two choices with each – play them out that year to free up cap space OR he can trade them. The first choice makes sense IF you think that there are free agents coming out that year that you want to pursue. However, if not, then you probably want to trade those contracts for actual players who are under contract.
Don’t be surprised, then if in 2012 Danny trades some or all of these expiring contracts for younger players who are going to come with long term contracts already – and thus we’ll end up just staying up above the cap through the whole process.
This last year was the wrong time for the ‘Trade Ray’ chorus. In 2012, assuming he exercises his 2nd year option, he and KG and JO and, well, everybody except Pierce & Rondo, will be fair game to be traded.
So it is highly likely that in the end, it won’t matter how much room we have under the cap in 2013 – because we may never get under the cap.
Who's up in 2012-13
These are some of the bigger names available in 2012-13. I’m not sure about all of them and of course, the list is not exhaustive.
Tim Duncan
Carmelo Anthony (if he DOESN’T opt out in 2011-12)
Dwight Howard (if he opts out)
Brook Lopez (restricted)
Chis Paul (if he opts out)
Russell Westbrook (restricted)
Steve Nash
Mehmet Okur
by Stanford_Fan on Jul 18, 2010 11:18 PM EDT up reply actions
2012 Blowup
Thanks mmmmm. That was some of the insight I was seeking.
If I am understanding this correctly, in 2012 we would be in a position to effectively trade our expiring contracts that summer and get a cast of new players to run with Rondo (and have Pierce as the grizzled veteran voice of reason).
So things could play out like this:
2010/11 We play and go deep in the Finals
2011/12 Lockout forces a 1/2 year, which would benefit an older team, like ours
2012/13 We make bold trade moves with our expiring contracts and retool
Is this a feasible vision or is it laden with flaws?
Thanks (you too King Coebra)
No thanks necessary
I just provided a couple basic numbers and no real insight. mmmmm did a much better job than I could ever hope to.
by King Coebra on Jul 18, 2010 12:09 PM EDT up reply actions
i still feel like its a trade kg, pp, ray situtation. start the rebuild process.. they have not been able to talk players like miller (both of them), brewer, shaq, redick, korver, blake, farmar, outlaw etc.. they have not been able to move sheed for anything worth value, so its most likely that he’ll retire as a celtic.. i really believe the rockets would have taken kg, they need a PF like kg to play vs duncan, gasol and the rest out west. before they signed raja bell utah would have probably taken ray. if the c’s wanted to keep pp to say he played his entire career here, fine. but they could have rebuilt by using trades like they did in 07-08. not to the talent level but atleast surrounded rondo with running wings. if they moved them early enough players like rudy gay might have been able to come here. jermaine o’neal to me isnt enough. they still need a little more help. and the players with enough talent to help are gone. the players left are kwame brown, adam morrison!!
It is not a trade kg,pp,ray situation
If you look at the situation this year. We have a 10% chance of winning it this year. And we can blow up the team next year or the year after. Basically, we are much better this year than we would be if we blew up the team. In addition, if we blow up the team next year or the year after I don’t think the team would be better by blowing it up sooner.
I.e, the current strategy makes the team better this year and will make little difference in 2013/14 vs the blow up strategy.
10 % chance where are you getting that number? LA, miami, orlando, san antonio, dallas, chicago, atlanta, milwaukee, new york, phx have made moves to get better. okc, memphis are improving fast… the nets, 6ers, wizards will be better.. cleveland and toronto will be worse.
Betting odds
Bodog has the Celtics with the 4th best odds behind Miami, LA, and Orlando.
Miami 7-4
LA 11-4
Orlando 11-1
Boston 12-1 8.3%
If they had blown up the team the odds would be in the 30-1 range at best and 100-1 range at worst. The 76ers are 100-1
I prefer to wait a year or two and still compete
So if you blew up the team today,
exactly who would you get that’s better than the players you already have?
It’s TOO LATE in this off season to rebuild the team; all the players you would have rebuilt the team around have already signed somewhere else…
You can’t trade your veterans because you won’t get value for them. Teams are looking to shed salary and/or get younger. No one will give you what KG is worth if it means absorbing his contract. Same with Pierce and with Ray.
So, jdunn, complain all you want. But tell me who you think they should get?
by Stanford_Fan on Jul 18, 2010 6:02 PM EDT up reply actions
“if they moved them early enough players like rudy gay might have been able to come here.”
thats what i said.. what i ment by that is if they decided before july 1st to ‘blow it up’ (which i dont like using) players with high value and getting into the prime of there career. rudy gay, david lee etc.. add the trades to sheeds retirement and they can afford to pay some of these players. close to 50 mil for sheed, ray, pp and kg….(not sure the correct amount)
the blowing it up would be more like a quick rebuild but with money for next few seasons. gay got close to rays money. lee would be around pierce money. they can afford players like josh howard, o’neal for 2 years still. then go after morrow, redick, scola to see if they can get 1 maybe 2 of them.
No one is taking KGs contract. Rudy Gay wasnt coming here, he was a restricted FA and Memphis gave him the max, so obviously they wouldve matched any offer.
Their realitic options to “blow it up” would have been renounce Pierce, Ray, Tony, Nate, Marquis and Scal. You also no longer have a midlevel to use. That barely gives you enough room to get say a David Lee, if he would come here. Lets say he would have. Now your starting five is Lee, KG, Baby, Avery Bradley?, and Rondo. Bench is Perk(eventually), Harangody, whatever you can get for Sheed, and rookies and minimum salary guys.
And your still capped out through 2012.
That team has zero chance of winning for two years.
So why not keep your veterans, still have a chance to contend for two years, and after 2012 use your cap space to get a David Lee type player then?
Doesn’t that make infinitely more sense?
I can’t believe there are still people that think blowing it up to get one guy this year was the right decision.
It's definitely not a trade kg, ray, etc. year.
Yes, there are possibly one or two teams that would take on KG’s contract for competitive reasons – but that is a heavy financial hit to take on so he would have to be exactly the missing piece. There might be one or at most two teams you could do anything with and the chances of them having what you want back available for trade is nil.
But if you wait until his contract is expiring, then there are more teams that would be interested in taking him on because not only is he potentially a competitive add – he also would provide tremendous value as an expiring contract. So by definition you have more buyers in the market and thus the value you can get back is more.
This basically holds for all the rest of our contracts that will expire that year. You want to maximize purchasing power and do it all then.
In Ray’s case the fact that his second year is a player option makes him almost untradeable until he exercises or waves that option.
If you thought they should have dismantled the team
before the opening of the free agency period, then I think that’s a valid opinion. It was one of the options available to the Celtics and DA.
Apparently he chose not to go that direction. But your comment: “I still feel like it’s a trade kg, pp, ray situation” suggests that you STILL think that they should blow it up today. Given the current free agent landscape, I think blowing it up right now would be a disaster.
So I think it’s valid to say you think he SHOULD HAVE dismantled the team, but I think it’s insane to say that he SHOULD dismantle the team.
+1
Given we are past the woulda, coulda,shoulda stage. The options of blowing up today are not well thought out, that time has past.
I remain interested in what we can look like after 2012. I have faith in the team which will be put together this year. Since 2008, Danny has always put out a Championship contender. This year we will emerge with a healthier core.
I must admit however that DA has done poorly in bringing in BigMen through trades or FA. I hope this year his grade improves substantially with J.O.
DA's big men
They haven’t all been lame. Some successes:
by trade: KG
by FA: Sheed, PJ
Not that poorly (just shy of two championships from that trio). I agree, let’s hope J. O. works out.
Agreed, it came across to harsh
It’s been the project players like Mikey Moore, Sheldon and the likes.
I actually consider JO to be a great find. So every year it’s been a great find (KG, PJ, Sheed) and then poor supporting cast beyond that. As mentioned before. I trust in DA.
In regards to Sheed. I see him as a replica of PJ. Now if only we could pay him for just the finals!
That would be sweet, but I doubt it will happen.
The problem is, to trade Sheed’s contract for its cap-savings, I think the receiving team will want Sheed to officially retire so they get immediate relief. Because there is a second year on it, I don’t know if a buyout will work.
If he officially files retirement papers, there is a much longer window and hurdles towards getting him to come back and play.
I could be wrong – there may be a scenario where a buyout could be worked out – in which case there is a chance he could come back in time. But my inclination is that it is not likely.
I agree about the ‘project players’. Unfortunately that is the nature of vet-minimum players. You usually get what you pay for.
Trades were another option
I did not present or examine that scenario in my additional post. That decision would have had to have been made very early on in the process and likely would have meant that a new coach would also have to have been brought in. Didn’t Doc make it known that he was returning for another run with the same core of guys? Going with the trade option would have all but ensured that we lost Doc also.
Several reasons
There are several reasons I did not explore that option. First of all I really haven’t heard anybody mention they wanted Garnett gone. Secondly I am not familiar with how Garnett’s contract is structured and if there is a “no trade” clause in it. Does anybody know for sure about that? Because if there is one that essentially eliminates any serious discussion of significant addition via the trade route.
Hard Cap?
And then there are the implications of a hard cap—
“Looking at the Celtics situation, they are currently committed to $70.5M for seven (let’s call it $68.5M for seven with Nate and without Rasheed) players for ‘11-’12 and $28.6 for three (Pierce, Rondo, Bradley) the following season. Even considering a 30% cut (the owners are proposing) that is $48M for seven players and with a hard cap of $53M, the rest of the roster will have to come from the remaining $5M (whoopee, we can afford minimum vets).”
http://celticsgreen.blogspot.com/2010/07/hard-cap.html
Whats the difference?
Even without a change in rules, all they have available for 11-12 is the midlevel, the biannual exception, and minimums.
You’re worried about the possible new rules(highly unlikely they’ll be that stiff. If they are, probably wont be an 11-12 anyway)wiping out the biannual exception? Because that would be the only real difference. Which I think would affect every team, not just Boston.
a 'hard cap' would not allow for overages via trades and exceptions.
I seriously doubt we’ll actually get a true hard cap.
I expect the new CBA will be close in form to the current CBA, except that the percentage number used to calculate the cap number will be smaller.
Yes, the Bird exception is a key part of making the CBA work...
Otherwise, you get the NFL, where it’s hard to keep track of where your favorite player is. The NBA realized that allowing teams an advantage in keeping their current players is important. In the NFL, all you have is the “Franchise Tag” and it can only be used on one player each year.
by Stanford_Fan on Jul 19, 2010 10:32 PM EDT up reply actions
You can't expect the Celtics to be able to blow up the team
in one month after an almost successful run through the playoffs and have any success at shedding salary the way other teams have.
All of the other teams that had huge cap space took the last couple of years getting ready for this year’s free agency. They lined up their contracts to come off the books at the end of the last season.
The big surprise was that the Heat were able to do it and still put a strong team on the court during the last month of the regular season and into the playoffs.
The Roster is coming into focus
We currently have 14 players under contract although 3 of them have contracts that are not guaranteed (Lafayette, Gaffney and Erden) if the website I gathered my contract info from is accurate:
Rondo, Robinson, Lafayette
Allen, Bradley
Pierce, Daniels, Gaffney
Garnett, Davis,
O’Neal, Wallace, Perkins, Erden
I don’t expect Lafayette, Gaffney or Erden to see much, if any, PT, and Perk will be a large question mark so that leaves 10 players. At this point I’d almost prefer that Sheed not retire and return for another run. That would give us a solid, veteran rotation of 9 players and allow us to utilize Bradley as the tenth man for awhile until he gets acclimated.
PG – Rondo, Robinson, (Bradley)
SG – Allen, (Robinson/Daniels), Bradley
SF – Pierce, Daniels
PF – Garnett, Davis, (Wallace)
C – O’Neal, Wallace, (Davis)
Link
Here’s a good link I found for a better explanation of the CBA. It’s lengthy, but a good quick reference if you need to brush up on any terminology or are unsure what someone is talking about when the CBA and salary cap are discussed.
Comments For This Post Are Closed
Secondary Sidebar
User Tools
NBA Playoffs Content Module
Related FanPosts on CelticsBlog
FanPosts
Community blog posts and discussion.
Recent FanPosts
In Association With
Ball Don't Lie - NBA - Yahoo! Sport
- NBA Playoffs Fan Fiction: Miami Heat vs. Boston Celtics
- The 10-man rotation, starring the Flaming Lips singin’ about the Oklahoma City Thunder
- The Philadelphia 76ers? Gone till November
- ‘Deep Thoughts’ and Cheap Thoughts: Miami Heat vs. Boston Celtics
- Metta World Peace wishes everyone a happy Labor Day on Memorial Day
