The Cavs and the salary cap

[TopGun]

For example, we know Tristan is going to get an offer from someone. Hell, this whole conversation about should TT get the max may not matter, as someone could just say, "fuck it, max him out to force the Cavs hand". 5 years, $90M for TT is a very real scenario that people must come to terms with. However, that cap space will grow 25% in 2016/17, meaning a max goes from 5/$90 to 5/$112.5 (around there). In other words, that's akin to tristan making $13.5M for 5 years. Not a bad deal. But when this deal happens matters more than it actually happening.

I don't buy this. What team with salary cap space is going to make Tristan Thompson their highest paid player? No team is going to do that to "force the Cavs hand". Sacrificing your own position to help 28 other teams? Only a GM that is trying to lose his job would do that. How are you going to sell to fans that they should come watch your new awesome signing that averages 10 and 13 a night and gets paid like an all-star? I'll believe it when I see it.

 

[kovanovich]

Jacob Rosen wrote a piece for WFNY on June 1st on this topic that is required reading, even though some of the assumptions on which it is based are a bit odd. Rosen's article is also valuable for out-year projections, which the NY Post article, which is otherwise good, doesn't venture into.

http://www.waitingfornextyear.com/2015/06/cleveland-cavaliers-and-future-salaries-wfny-faqs/http://www.waitingfornextyear.com/2015/06/cleveland-cavaliers-and-future-salaries-wfny-faqs/

I originally posed it in the Haywood thread, but it deserves to be here.

 

[Damage]

I don't buy this. What team with salary cap space is going to make Tristan Thompson their highest paid player? No team is going to do that to "force the Cavs hand". Sacrificing your own position to help 28 other teams? Only a GM that is trying to lose his job would do that. How are you going to sell to fans that they should come watch your new awesome signing that averages 10 and 13 a night and gets paid like an all-star? I'll believe it when I see it.

1. It was a for instance. Assumed this was a given.
2. Think of it as 5/$13.5M, not a legit max
3. Tactics, sequences & stages. It's called strategy & teams with cap room could do it considering the Cavs will match any offer made towards TT.

 

[bigfoot5415]

I don't think we have to pay what everyone thinks for TT or for Shump. The market will determine their value and neither player will get a ridiculous offer. As someone above stated, no one is paying $15 mil to make Tristan their highest paid player.

Gilbert will pay for a winner.

Just a few notes worth adding. These are all taken from mobile sites so I can't quite see all the details, but here we go.

- Revenue according to an article for the Horseshoe Casino Cleveland (not factoring in others he has his hand in) was around $22 mil for March. Assuming it picked up for the playoffs and holiday season. It's safe to assume just the Cleveland Casino generates $250 mil in revenue a year with a high profit margin. Some of those profits can be plugged into the luxury tax.

- Not only do we get money from the gate ticket sales, but Gilbert owned Flash seats makes commission on every ticket resold and fees off every ticket sold and resold. Hence why he probably wanted to limit where Cavs tickets were sold. All with next to no overhead. I can't find revenue for veritx but as a whole I'm sure it's doing well, especially here.

- Revenue from the team was $150 mil this year according to Forbes, bc it's mobile I'm not sure how advertising, tv deals, and radio deals are factored in, but safe to say alot of our broadcasting dollars can be pumped back into the team. Not factoring in future deals either.

Then we will finally dig into ownerships pockets. Safe to say a $200 mil team is feasible if Gilbert moves his money around. Cnat imagine more than $40 mil will come directly out of pocket. If that. Pretty much what he paid Baron Davis & Byron Scott to go away.

I can only imagine what will happen once Gilbert starts to buy up parking lots. You laugh, but it will happen. The guy is fully engaged in the Cleveland market and will keep creating resources to fund the team. We're pretty lucky to have this guy. I'm pretty sure when they added a bunch of guys with free agency looming, someone brought up the possibility of a $200 mil payrol and he didn't bat an eyelash.

Sorry for spelling. On my cell.

 

[col63onel]

A quick note to add on the "Who would offer TT that much money" debate

If someone signs TT to an offer sheet, it will come out of cap space. After he signs it, that money is committed until either Cavs match or don't match. If the Cavs wait 3 days and match, then that team has a good chunk of their cap space tied up in a player they ultimately never signed. Signing TT to an offer sheet means they risk letting other FA sign elsewhere while their cap space is wasted.

 

[natedagg]

I need help w timing: if LBJ and Love opt out, we will be far under the cap. Can we do trades and sign players, then re-sign them? I seem to recall that we can't but I don't know why.

 

[col63onel]

I need help w timing: if LBJ and Love opt out, we will be far under the cap. Can we do trades and sign players, then re-sign them? I seem to recall that we can't but I don't know why.

The rights to being able to go over the cap to sign your own players comes with something called a "cap hold". Your own free agents count against the cap to close the very loophole you mentioned.

Coon FAQ Q37 and Q 38

 

[NasstyNate]

Do any of the people proffered as experts have any experience with the NBA cap other than reading Larry Coon or others who also rely on him?

 

[RonG]

Is there a three way scenario where we can trade Haywood and create a 10 million dollar exception? Or would it only be the 2. something he is currently making.

 

[col63onel]

Is there a three way scenario where we can trade Haywood and create a 10 million dollar exception? Or would it only be the 2. something he is currently making.

It would be for whatever salary we sent out, so 10.5 mil.

We're running out of 2nd round picks, though, to give away in order to create an exception.

 

[natedagg]

It would be for whatever salary we sent out, so 10.5 mil.

We're running out of 2nd round picks, though, to give away in order to create an exception.

Wait wut? In order to create an exception, we must include a 2nd round pick in the trade?

 

[I'mWithDan]

Sorry if this was already mentioned by someone….I was skimming this thread….

One thing to keep in mind is the MASSIVE salary cap jump there will be.

In terms of paying an exorbitant amount in luxury taxes, that doesn’t apply to every year moving forward, it really only applies to NEXT year.

When this new TV deal kicks in, as well as Nike nearly doubling the apparel contact, cap estimates are in the range of:

2016 - $89 Million Dollar Cap, $108 million dollar luxury tax
2017 - $108 Million Dollar Cap, $127 million dollar luxury tax

So when we’re talking about retaining players, we are actually way better off eating a huge tax bill this season, in exchange for locking some of these core players up at more reassembles deals, post salary cap jump. When every dollar counts, the only thing we can lament is the Anderson deal and not locking up TT when we had a chance. Both of those moves are going to cost us a considerable amount in both salary and tax bills.

I’ll also state that this is just he way of the world in the NBA. The Warriors have a ridiculous bargain on Curry’s contract for two more seasons but they are going to be in the same boat.

Golden State has 78 million committed next season and that is WITHOUT resigning Green, Barbosa or Speights.

They likely have to keep one of Speights / Barbosa and Green is slated to get max money. That is going to push them in the 100 million dollar range and that doesn’t include any additional signings or draft picks.

This is just the lay of the land in the NBA. The best teams have to pay the most money.

 

[col63onel]

Wait wut? In order to create an exception, we must include a 2nd round pick in the trade?

You get a trade exception by trading a player to a team under the cap. They are free to add salary since they are under the cap.

However, when you make a trade, you must either include another player, a future draft pick or draft rights (Coon FAQ Q82). You don't want to include a player, because that wouldn't allow you to have an exception. Draft rights to players aren't very valuable. So you have to you to send a draft pick to the other team. Plus, they are doing you a favor by taking on this contract, so they'll need something in return. In the Bogans trade exception that helped us net Moz, we gave Philly a future 2nd.

 

[nikolajz1]

Sorry if this was already mentioned by someone….I was skimming this thread….

One thing to keep in mind is the MASSIVE salary cap jump there will be.

In terms of paying an exorbitant amount in luxury taxes, that doesn’t apply to every year moving forward, it really only applies to NEXT year.

When this new TV deal kicks in, as well as Nike nearly doubling the apparel contact, cap estimates are in the range of:

2016 - $89 Million Dollar Cap, $108 million dollar luxury tax
2017 - $108 Million Dollar Cap, $127 million dollar luxury tax

So when we’re talking about retaining players, we are actually way better off eating a huge tax bill this season, in exchange for locking some of these core players up at more reassembles deals, post salary cap jump. When every dollar counts, the only thing we can lament is the Anderson deal and not locking up TT when we had a chance. Both of those moves are going to cost us a considerable amount in both salary and tax bills.

I’ll also state that this is just he way of the world in the NBA. The Warriors have a ridiculous bargain on Curry’s contract for two more seasons but they are going to be in the same boat.

Golden State has 78 million committed next season and that is WITHOUT resigning Green, Barbosa or Speights.

They likely have to keep one of Speights / Barbosa and Green is slated to get max money. That is going to push them in the 100 million dollar range and that doesn’t include any additional signings or draft picks.

This is just the lay of the land in the NBA. The best teams have to pay the most money.

That massive salary cap bump will be nullified by Lebron's 35 mil/yr contract. Then add in a Mozgov 15 million dollar + contract in a year and were pushing like a 175 million dollar roster before tax. There's zero way we can keep everyone. I can't see Gilbert losing 150 million a year for 5 years to field this team.

 

[I'mWithDan]

That massive salary cap bump will be nullified by Lebron's 35 mil/yr contract. Then add in a Mozgov 15 million dollar + contract in a year and were pushing like a 175 million dollar roster before tax. There's zero way we can keep everyone. I can't see Gilbert losing 150 million a year for 5 years to field this team.

Clearly guys like Mozgov will fall off but the bump is enough to retain the three most important guys on our roster. It's likely all the other pieces will be fluid.

We'll keep Moz for one more year then cut him loose for a DP or min salary player.
I also think we'll move Anderson at some point and ditto for TT.

We realistically can't hold our current roster entirely in tact beyond this season but it would be stupid not to just eat the bill for one year and then make some tough decisions next.