Plans for Cap Space in Summer 2013

[Surge]

Sign a scrub to a one year max contract so that we can trade the expiring for whatever we want.

 

[wuck]

That's not true. I give you Jeremy Lin, Omer Asik and Landry Fields as recent examples.

I don't know the facts and figures, but I'm pretty sure that the total value of a deal has to AVERAGE those increases, but the payout can be spread out based on salary cap space available by the team making the signing. I think a team can frontload a contract similarly, but opposite, of what the Rockets and Raptors did.

Lin and Asik are special cases. If the Knicks or Bulls had matched, they would have had to pay the huge balloon payment at the end of the contract. But the Rockets are charged an average of the contract over three years (not the big balloon payment). It's known as a poison pill contract and can only be offered in a small number of cases. Much more info about it can be found in the links below. It can't be used across the board. More discussion on front-loading contracts can be found in the Speights thread (and the basic response, I think by KI4MVP, is that heavy frontloading is prohibited, perhaps in all cases, as part of the new CBA). So, heavy frontloading or heavy backloading is not something that is simple to do, nor is it available to all teams. It may allow low-salary teams to poach players from high-salary teams in some rare cases.

http://management.fortune.cnn.com/2012/07/17/jeremy-lin-houston-rockets/

http://offthedribble.blogs.nytimes.com/2012/07/17/questions-abound-with-lin-in-the-balance/

 

[oasis05]

Cap space should go to displacing gee at small forward and Zeller/Speights/Varejao at center. Cavs need to get bigger at both positions. Obviously Oden is on the mind, but in my mind Earl clark is a guy who could blow up with some opportunity. He should be available in the off season. Sort of a small forward power forward tweener. I'd rather give him 5 million than speights.

 

[adam81king]

Lin and Asik are special cases. If the Knicks or Bulls had matched, they would have had to pay the huge balloon payment at the end of the contract. But the Rockets are charged an average of the contract over three years (not the big balloon payment). It's known as a poison pill contract and can only be offered in a small number of cases. Much more info about it can be found in the links below. It can't be used across the board. More discussion on front-loading contracts can be found in the Speights thread (and the basic response, I think by KI4MVP, is that heavy frontloading is prohibited, perhaps in all cases, as part of the new CBA). So, heavy frontloading or heavy backloading is not something that is simple to do, nor is it available to all teams. It may allow low-salary teams to poach players from high-salary teams in some rare cases.

http://management.fortune.cnn.com/2012/07/17/jeremy-lin-houston-rockets/

http://offthedribble.blogs.nytimes.com/2012/07/17/questions-abound-with-lin-in-the-balance/

Not sure if you were trying to correct me, or provide evidence to my statement, but it sounds like the articles stated exactly what I said--that the players are offered salaries averaging a certain number with appropriate raises, but paid out depending on cap space. Obviously teams over the cap can't sign free agents above the exemptions, and I'm assuming the Cavaliers will still be under the cap (by significant amounts) the next two summers, so the fit into your "low-salary teams" scenario.

 

[wuck]

Not sure if you were trying to correct me, or provide evidence to my statement, but it sounds like the articles stated exactly what I said--that the players are offered salaries averaging a certain number with appropriate raises, but paid out depending on cap space. Obviously teams over the cap can't sign free agents above the exemptions, and I'm assuming the Cavaliers will still be under the cap (by significant amounts) the next two summers, so the fit into your "low-salary teams" scenario.

Your post made it sound like it is easy to frontload or backload a contract in the new CBA. Neither is true. There are major constraints.

The "poison pill" contracts (like Asik and Lin) can only be offered to a subset of players -- roughly five percent of the league. Specifically: "They must be restricted free agents -- players who can receive offers from other teams, but must automatically re-sign with their original team if that team decides to match an outside offer. Of these restricted free agents, only those who are either second-round draft picks or undrafted free agents with under three years of experience can receive a poison pill deal." Not many of those players are good enough to be pursued in this way, and most teams can't afford to offer such a contract. It is true that the Cavs could do so with their current cap space.

Frontloading a contract is less viable with the new CBA:

"Teams are allowed to offer the players they sign a bonus worth as much as 15% of the total compensation1 (the total compensation includes the signing bonus itself, but excludes any incentive compensation). A signing bonus is paid up-front, but it is charged to the salary cap across the guaranteed seasons in the contract (not including option years or years following an ETO), in proportion to the percentage of salary in each of those seasons that is guaranteed."

http://www.cbafaq.com/salarycap.htm#Q73

---
Teams also can't significantly front load a contract--as a non bird free agent, the maximum it could decrease from year to year is 4.5%.

http://www.cbafaq.com/salarycap.htm#Q53


A backloaded poison pill contract is possible for a very small group of players. I don't know of conditions in which a contract under the new CBA can be significantly frontloaded (in a way that helps low-salary teams take advantage of free space now and save space for later). Maybe there are some, but Coon's CBAFAQ is a tough read.

 

[Henry Tuttle]

In that case, I don't see any FA's who the Cavs would want to poison pill. Pekovic would qualify if he had one less year experience.

 

[wildfan]

not sure alot of cap space should be a goal for the cavs. Sure have enough to sign lower level FAs like Miles, Levingston, and may be Oden. And enough to buy a draft pick by taking on a bad contract in a trade. But high buck FAs aren't going to sign with the cavs. imho

cap space is only valuable if you can use it. its like saying expiring contacts are good because you can trade them, but you never trade them.

 

[Mdog1]

If we can't get Dwight Howard, then make a few CJ Miles level signings, and be done with it.

 

[MoFlo]

not sure alot of cap space should be a goal for the cavs. Sure have enough to sign lower level FAs like Miles, Levingston, and may be Oden. And enough to buy a draft pick by taking on a bad contract in a trade. But high buck FAs aren't going to sign with the cavs. imho

cap space is only valuable if you can use it. its like saying expiring contacts are good because you can trade them, but you never trade them.

Cap space can (and IMO, in the Cavs case, will) be used in trades as well. It all doesn't have to be used on FA signings.

 

[Ohio]

I'd look at Al Jefferson if we could somehow sign him for just one year.

 

[mhi]

Fuck living below LeBron James's knees. Sign Josh Smith to the max.

 

[Steve_424]

Dwight Howard? He's now alienated himself from two teams in two years - do we really want to be #3?

 

[kovanovich]

as for signing a player to a long term deal in 2013 (you mentioned 5mio/yr) it's possible but there are a lot of factors that come into play (their draft picks over the next 2 years + will they pick up Gee's and Andy's options in 2 years?). that's why i was all for trading Speights, if you break down the numbers it's a lot closer than i originally thought (in terms of going into 2014/15 with the ability to sign a player to a max. deal) and i really don't want to be in a position in 2 years where you have to decline Andy's option because you gave Speights a long term deal...

This is actually a very interesting point. Even if he is healthy and hasn't been traded, it's conceivable the Cavs will have to decline Varejao's option in 2014-15 (they will still have to pay him $4M though).

Here are my assumptions. The Cavs want to compete next year to make the playoffs. Everything I have seen points in this direction. However, they also want to maintain cap flexibility, and specifically want to preserve max cap space for the summer of 2014 in the event a franchise changing opportunity presents itself. These two considerations are in conflict, which is where the problem comes in. (It's not unlike the situation Dallas and other teams have confronted in recent years, trying to maintain cap flexibility and compete at the same time; notably in the case of Dallas it has led to a sub-.500 season.)

Here are the Cavs' FAs or potential FAs this summer:

Casspi -- won't be re-signed
Gibson -- won't be re-signed
Ellington ($3M QO) -- QO will likely be offered; may re-sign on a Gee-type contract? (see further below)
Speights ($4.5M PO) -- likely declines PO; how much will Cavs be willing to pay?? (To my mind, this is one of the more interesting questions faced by Cavs in off-season.)
Selby (Team Option) -- will not return
Livingston -- Cavs likely will try to re-sign on cheap one year contract (if possible)
Walton -- Cavs may well try to bring back on one year deal for vet minimum or perhaps a bit more (purely speculation on my part)
Miles (TO) -- TO likely declined; however, this is tricky, because the Miles contract does expire in 2014, so maybe the TO is exercised (?); may depend on likelihood of Ellington re-signing (or not signing an offer sheet with another team), but that likely won't be known till later in the summer, which complicates matters a bit
Jones (TO) -- likely brought back to fight with a new batch of undrafted FAs and maybe a second round pick for a roster spot or two

That's 9 guys who make >$20M in 2012-13, quite a bit of money coming off the books for a low salary team (low team salary if you don't consider KD's amnestied contract, that is). You have to fill these spots on the roster by some combination of re-signings and new signings/acquisitions/draft picks. Unlike in the previous couple of years, you actually need to replace them with guys who can contribute to winning games, since the object this coming year is to make the playoffs and be as good as possible.

The problem is that to get good players, you typically need to pay a bit more. I think it is very likely Speights commands at least a guaranteed 3 year contract for $5M/yr, perhaps somewhat more. It will depend on his performance the rest of the year, and then on how the market shakes out this summer. So do the Cavs consider Speights a guy who helps you look like a viable NBA team, or a guy who you can be a part of a playoff team's front court rotation? Maybe you are able to bring back Ellington for the 1 year QO ($3.1M) and not worry about a multi-year extension for him at this point. Then maybe in 2014 you decline the option on the final year of Gee's contract, and assuming you haven't taken on additional salary (via trades using your cap space or through other FA signings), maybe you are able to exercise the option on Varejao's final year AND still have max cap space. It will be cutting it close though, depending on exactly where the Cavs' draft picks fall, and where the salary cap figure comes in, and how much Speights gets paid. My back of the envelope calculations put the team salary at just about $40M, but this figure excludes Gee and includes only 9 players (Varejao, Irving, Thompson, Waiters, Zeller, 2013 first rounder #1, 2013 first round #2, 2014 first rounder, and Speights), which cuts it very close considering a 10 year max salary in 2014 will be at least $20M.

So my guess is they re-sign Speights for (non-tax payer) MLE type money ($5-6M/yr), re-sign or otherwise bring back Ellington, Livingston, and Walton, try to sign Greg Oden guaranteed for 2013-14 with a team option for 2014-15 (this complicates things further, but if he stays healthy and plays well and you want to exercise the option in 2014, you find some way to carve out the cap space), and bring in a few other guys (plus maybe actually draft someone in the second round using their own pick or Orlando's) to compete with Kevin Jones for a couple roster spots.

EDIT: Should have mentioned another consideration mentioned by others...the 90% minimum team salary rule, which is another reason for re-signing Speights. If you decide not to re-sign him because he is too expensive, you are going to have to sign someone else. Maybe you can find a vet willing to sign a one year deal, but if that's your goal, the market is going to be very limited (I'm sure Jamison will be available), and it's going to be difficult filling out the roster with enough salary to get to the 90% threshold.

 

[Dr. Gymbo]

Fuck living below LeBron James's knees. Sign Josh Smith to the max.

 

[BimboColesHair]