When reports came out that the Boston Celtics were going to sign Greg Monroe to a one-year, $5 million contract using part of the Disabled Player Exception, expectations were that Monroe would ink that deal as soon as he cleared waivers. Monroe cleared waivers on Saturday evening, leaving him free to sign with Boston on Sunday. That signing did not happen. Celtics coaches withheld comments at Sunday’s game, citing that Monroe was not signed with Boston.
After the last-second win over the Portland Trail Blazers, the Boston Globe’s Adam Himmelsbach reported that Boston may not sign Monroe until after the trade deadline, which is this Thursday.
Hearing it's possible the Celtics could hold off on officially signing Monroe until after the trade deadline to maintain flexibility. Likely sooner.— Adam Himmelsbach (@AdamHimmelsbach) February 4, 2018
Why might Boston be delaying the signing of Monroe when reports are that both parties have agreed upon terms? For fans looking forward to the addition, don’t panic. There are a couple of valid reasons the Celtics might be waiting.
For one, Boston may be looking retain flexibility under the luxury tax line. Currently the Celtics are $8.6 million under the tax. Using all of the DPE would essentially put Boston right at the tax. If the reports of a $5 million signing are accurate for Monroe, the Celtics would have about $3.6 million in wiggle room under the tax.
In the NBA it is a regular occurrence for a signing to be for “whatever is left of cap space, an exception, or under the tax,” which could be what is happening here. Boston may have agreed to give Monroe $5 million or whatever amount of the DPE that keeps them under the tax.
Staying under the tax this season is important for Boston. By staying below the tax line this year, the Celtics could avoid paying the repeater tax in the future. The repeater tax is a much stiffer penalty than just paying the tax. Even the most supportive ownership groups (which includes the Celtics owners) have their limits as to how much they are willing to pay. With new contracts due for several regulars in the not-so-distant future, avoiding the repeater tax for as long as possible is definitely a goal for Boston.
The second reason the Celtics could be delaying the signing is simply to conserve the ability to make a more flexible trade. NBA rules differ as to how much money a team can take back in a trade. The largest differentiator is if the team is over or under the luxury tax. That determination is made post-trade, which further complicates the calculation. By keeping all of their $8.6 million in space under the tax, Boston retains flexibility. The amount of salary you can take back in a trade as a non-taxpayer depends on how much salary you send out in the trade:
· If you send out $0.00 to $6.5 million, you can take back 175% of the outgoing salary, plus $100,000.00
· If you send out $6.5 million to $19.6 million, you can take back the outgoing salary, plus $5 million
· If you sent out $19.6 million or more, you can take back 125% of the outgoing salary, plus $100,000.00
A taxpaying team is confined to the same as the highest tier of outgoing salary of a non-taxpayer at 125% of outgoing salary, plus $100,000.00.
It is highly unlikely Boston is going to make a trade that sees them send out $19.6 million in salary, as such a trade would involve one of the highest-paid players on the roster. Alternatively, such a deal would involve several players, which would gut the roster of depth. So, it makes sense for Boston to retain the flexibility to make a trade under either of the lower tiers.
By delaying the signing of Monroe and conserving that wiggle room under the tax line, Boston can make one of the two lower-tier trades of outgoing salary and bring back a bigger salary in return. If they were to sign Monroe and then make a subsequent trade that took them over the tax, the amount of salary they could return is limited.
The Celtics could also choose to make a trade that takes them close to or over the tax line. They could then bite the tax bullet, sign Monroe using the DPE, and really go over the tax. This could subject them to the repeater tax later, but they might take a “cross that bridge when we come to it” approach.
Lastly, conserving an open roster spot is never a bad course of action. It gives the team flexibility to make a trade where they take in one more player than they send out without having to make a corresponding transaction to open up a roster spot.
At this point there is no reason to fear Monroe isn’t signing with the Celtics. This delaying tactic is simply Danny Ainge doing what Danny Ainge does best: retaining assets and remaining patient. While it may cause some heartburn for Boston fans, Ainge has a plan. As he has with the DPE, he’s not going to rush anything until he’s sure what all of his options are. That approach has served the Celtics well for over a decade and is likely to continue to do so as we near the trade deadline.
And, of course, Monroe could sign prior to Tuesday’s big matchup with the Toronto Raptors and scuttle this whole line of thinking. Just know if that happens, Ainge has already thought through the ramifications and has a plan in place leading up to Thursday’s trade deadline.