On July 14, F Jabari Parker agreed to a 2 year/$40M deal with the Chicago Bulls. Parker, returning from a second NBA ACL injury, was a restricted free agent of the Milwaukee Bucks.
Going into the day, the Bulls sat at $89.8M in salaries paid or tied up in cap holds. That left them with roughly $12M in room after matching the LaVine offer. Thus, they needed to extend an offer to Jabari Parker greater than his $3.6M QO from the Bucks. Also, the Bucks sat roughly $11M below the Luxury Tax with the Parker QO extended, meaning that they likely only could offer him a contract with a 2018-2019 value of $11M (assuming they want to avoid the tax). By nature, the Bucks had the advantage, having more natural cap room ($12M) than the Bucks had beneath the apron ($11M).
When the Bulls extended the 2 year/$40M deal to Parker, the numbers didn’t initially line up. In order to clear the roughly additional $8M in room, the Bulls needed to waive Paul Zipster and Julyan Stone (whom they just acquired from Charlotte). Also, they needed to renounce the rights to Noah Vonleh, David Nwaba, and Ryan Arcidiacano. With these movements, the Bulls cleared up $20.6M in room, allowing the Parker deal to go through. As part of the agreement, the Bucks generously rescinded their qualifying offer, allowing Parker to enter the deal as an unrestricted free agent.
An important thing to note is that the Parker deal has a second year Team Option, meaning that the Bulls are paying Parker $20M in 2018-2019 for a tryout. If Parker returns to near-All-Star form, the payment looks par for the course. They can then choose to bring him back for another $20M the next season. If he is beneath his usual playing form or he finds himself injured again, the Bulls can simply choose to opt out of his contract before the 2019-2020 season. After offering the deal, the Bulls sit with 13 players on the roster and $641,178 in cap room. They still have the full $4.4M Room-MLE.
Expect them to use part of all of the Room-MLE to sign a veteran player (14), and they will likely then extend a veteran minimum contract to the 15th player. They still have one open two-way roster spot (Antonio Blakeney is the first).
Trade 1: BKN – ATL
BKN receives from ATL:
2020 2nd Round Pick (via Portland – protected 31-55)
Rights to Isaia Cordinier (2016 Pick 44, currently plays for Antibes of French LNB Pro A)
BKN sends to ATL:
G Jeremy Lin
2025 2nd Round Pick
Right to swap 2nd Round Picks in 2023
Brooklyn’s side: Brooklyn parts ways with Jeremy Lin after two injury-filled years, and they get to offload his $12,516,746 salary to clear cap space. Lin has a 10% trade kicker ($1.25 mil) that would be paid by the Nets unless he chooses to waive part or all of the fee. As a result, Brooklyn gives up a far future 2nd Round Pick in exchange for a much more valuable 2020 2nd Round Pick. The 6’5”, 21-year-old shooting guard from France will likely never come over to join Brooklyn, thus it doesn’t cost them a roster spot.
Atlanta’s side: Atlanta takes on Jeremy Lin with their cap space and pairs a seasoned veteran with young guards Dennis Schroder and 2018 Lottery Pick Trae Young. If Lin can provide backcourt value to these two, the Hawks call that a win as they eat up an expiring contract and likely won’t resign Lin after this season. As a result, Atlanta also acquires a far-future 2nd Round Pick and the 2nd Round Pick-Swap, both are minor assets but add to the pick arsenal.
Trade 2: BKN – DEN
BKN receives from DEN:
F Kenneth Faried
F Darrell Arthur
2019 1st Round Pick (Protected 1-12)
2020 2nd Round Pick
BKN sends to DEN:
G Isaiah Whitehead
Brooklyn’s side: Brooklyn just picked up $12.5 million in cap space from the trade with Atlanta, and previously they acquired roughly $4 million back in a buyout with Dwight Howard. Going into the night, they had $5.72 million in cap room before renouncing any of their remaining cap holds. The added room from the Lin deal brings them to $18.22 million in room, and the buy out would get them up to roughly $22.22 million. They exchange Whitehead’s non-guaranteed $1,544,951 contract for Faried’s $14,764,045 contract and Arthur’s $7,464,912 contract, both of which are expiring. Both provide needed veteran front-court depth, while Faried’s rebounding proficiency pairs well with Jarrett Allen who is still developing as a rebounder. In addition, Brooklyn used the Lin deal to clear the cap room to pull off the trade, and thus it doesn’t have to go through salary matching because it is room-based (note: Whitehead wouldn’t count in salary matching because of the non-guaranteed contracts – see Houston’s 2017 trade for Chris Paul). Brooklyn also acquires a 2019 1st Round Pick (Protected 1-12) and a 2020 2nd Round Pick.
Denver’s side: Before the trade, Denver sat $6.46 million into the luxury tax costing them a total of $10 million in luxury tax payments. They offloaded $21 million in salary to Brooklyn, ducking back under the tax apron and saving them from paying those tax payments. It did come at a cost, as they had to give up a 2019 1st and 2020 2nd Round Pick, but that is a justifiable cost to avoid the luxury tax and offload bad contracts. In addition, Denver plans to waive Whitehead and thus take on no salary back from this deal.
$0 to $4,999,999 @ $1.50 = $7,499,998.50
$5,000,000 to $6,457,034 @ $1.75 = $2,549,809.50
Total: $10,049,808 in Luxury Tax Payments
Overall, Brooklyn ends the night by flipping Jeremy Lin for a 2019 1st Rounder and two 2020 2nd Rounders, restocking their pick cabinet after the King regime left it quite dry. Quite a successful outing for Sean Marks and Trajan Langdon as they prepare for a strong rebuild.
“Dead Cap” refers to salaries paid/cap hits for players that are no longer on the roster. For example, in 2018-2019, the Portland Trail Blazers have the following contracts under the category of dead cap space:
The “dead cap” space will remain the same for 2019-2020, and it will decrease when Ezeli’s contract comes off the books after the 2020 season. Varejao’s contract will come off the book after the 2021 season, and Nicholson will be on the books until the end of the 2023 season.
Salary Cap Numbers provided by: NBA Salary & Roster Sheets
1. Aron Baynes and the Boston Celtics
Aron Baynes signed a contract with the Boston Celtics on July 19, 2017 for 1 year/$4,328,000 using cap room.
Aron Baynes qualifies for the Non-Bird exception because he spent one (and only one) full season with the Boston Celtics without being waived or changing teams as a free agent.
Thus, Boston is able to sign him to the greater of the following options:
Baynes is eligible to sign up to 4 years with 5% raises over the first year of the deal. His new contract is as follows:
By signing Baynes with his Non-Bird Rights, the Celtics can sign him over the Salary Cap and also maintain full access to their Non-Taxpayer MLE valued at $8.6M.
2. Luke Kornet and the New York Knicks
Luke Kornet is coming off a 1-year Two-Way contract with the New York Knicks. He joined the Knicks in the offseason of 2017, meaning he has acquired exactly one full year of service with NYK. As such, he is eligible for the Non-Bird Exception.
For a 1YOS veteran, the 2018-2019 minimum salary is $1,349,383.00, which raises to $1,619,259 with the 120% increase due to Non-Bird Exception.
While Kornet is eligible for four years, he inked for 1 year @ $1.6M with the NYK.
Historical Example: 2017 Nene and the Houston Rockets
Another example came in the offseason of 2017 when the Rockets signed Nene to a 3 year/$11 million contract using his Non-Bird Rights. In 2016, Houston signed Nene to a 1 year/$2.8 million deal using cap room. Thus, when the offseason of 2017 rolled around, he was a free agent having played the previous full season only with the Rockets (without being waived or traded). Just like Aron, his greatest contract value was 120% of his 2016-2017 salary. The numbers are as follows:
Nene’s deal previously included a 4th year at $3.9M, bringing his total to 4 years/$15M, but the 2017 CBA calls for the new “Over-38 Rule.” As such, Nene cannot sign a contract greater than three years if it extends to or past his 38th birthday. When Nene signed the deal with Houston in the summer of 2017, he was 34 and the deal would violate this rule. Thus, he finalized at 3 years/$11M deal with the Rockets using Non-Bird Rights.
Before this trade, Charlotte was on the books for $117.2 million in salary, just south of the 2017-2018 Luxury Tax line of $119.2. Even with the increased Luxury Tax Line and Salary Cap, Charlotte would be flirting with the Luxury Tax Line and was looking to dump salary and clear up space. They found their answer with Brooklyn.
Charlotte traded C Dwight Howard to the Brooklyn Nets in exchange for C Timofey Mozgov, two future 2nd round picks, and cash consideration.
From Brooklyn’s side: Howard is on an expiring contract, so they will pay out the $23.8 million he is owed and have an open roster spot after the 2018-2019 season. Also, they were able to off-load Mozgov’s 2019-2020 contract, freeing up an additional $16.7 million in 2018-2019 (net + $8.9 million in freed salary). Their cash considerations will reset on July 6 with the new salary cap year, and the two 2nd round picks are the sweetener to get Charlotte to make the deal.
From Charlotte’s side: Mozgov costs roughly $7.9M less for 2018-2019 than Howard, thus it frees Charlotte from the danger of crossing the Luxury Tax line (giving them roughly a $13 million gap). If Mozgov plays well this season, they could look to move him again, now on an expiring contract, or let him ride through 2020.
The No. 1 pick in the 2018 NBA Draft could change a franchise, but the question lies in — at what cost? The CBA calls for set amounts for 1st Round Picks as Rookie Scale Contracts. While years 1, 2, and 3 have predetermined values, teams can negotiate to pay their 1st Round Picks up to 120% of the predetermined values. For the 1st overall pick, this is almost a guarantee. Year 4 comes at a percentage increase over year 3, and Year 5 is a percentage increase over Year 4 that serves as a Qualifying Offer to make the Draft Pick a Restricted Free Agent that offseason.
So, if Luka Doncic, DeAndre Ayton, Marvin Bagley III or others get selected by the Phoenix Suns with the No. 1 overall pick, his salary will be as follows (assuming a 120% increase over the predetermined values):
Thus, Doncic, Ayton, Bagley, or others would sign a 4 year/$40 million deal with the Phoenix Suns, with the Suns having the right to pick up the Team Option in 2020, 2021, and the option to extend a qualifying offer in 2022.
Per CBA rules (Article VII, Section 2b), each NBA team is required to spend 90% of the Salary Cap in team salaries. This limit is called the “salary floor.” For 2017-2018, the Mavericks have fallen beneath the salary floor by $4,036,966. Thus, the Mavericks must reimburse the players on the roster this amount of money postseason, so that the players earn 90% of the Salary Cap (and their share of Basketball Related Income – BRI). The numbers are displayed below.
What: Make your Restricted Free Agent into an Unrestricted Free Agent
Why: Likely no plans to resign and to clear cap space
When: Offseason Move
Benefit: Eliminates the cap hold for the RFA
Renouncing the rights to a player means that a team can no longer use Bird, Early-Bird, or Non-Bird exceptions to resign him, making him an Unrestricted Free Agent. As a result, a team can still negotiate with the player but must do so as an UFA. The team is freed from the cap hold that the player would claim as a RFA, and can use other exceptions besides Bird Rights.
This action can occur no earlier than July 1 following the most recent season of the player’s contract. If a team renounces a player on July 1, 2018, and the player remains unsigned for the 2018-2019 season, he will remain a UFA in the next offseason. A team cannot “wait-out” a renouncement period to then sign a player later on.
A team would likely renounce a player to free up cap space. If they chose, a team could sign the player to a Two-Way contract or execute a sign-and-trade after renouncing a player.
In one specific case can a team “un-renounce” a player. If Team 1 renounces a player (or players) to clear room to sign a RFA from Team 2, and the RFA resigns with the Team 2, Team 1 can “un-renounce” or rescind the renouncement of that player. However, a team cannot “un-renounce” a player if it takes them above the salary cap or further above the salary cap than it was before renouncement.
On June 23, 2017, the Detroit Pistons extended a Qualifying Offer of $4.96 million to Kentavious Caldwell-Pope. In July of 2017, the Detroit Pistons renounced the rights to Kentavious Caldwell-Pope, making him an Unrestricted Free Agent. At the time, they were over the salary cap, into the luxury tax, and couldn’t match KCP’s offers. Thus, Kentavious Caldwell-Pope signed with the Lakers for a 1 year/$17,745,894 contract using the cap room of the Lakers.
For the offseason of 2018, Kawhi Leonard qualifies for the Designated Veteran Player Extension, otherwise known as the new NBA Super-Max Deal. Per the CBA, he can sign this Super-Max deal in the final season of his current deal, extending him by five years (6 total with the Spurs). He has done so based on the following qualifications (Article II, Section 7a, ii):
The “supermax” deal qualifies Kawhi for a first year base-salary (2019-2020) of 35% of the NBA salary cap. In the following years, he can receive an 8% increase yearly from the first year salary. The DVPE calls for a six-year length, thus Kawhi would sign a five-year contract in the summer of 2018, having only one-year remaining on his current deal. The salary projections are based on the first year of the new deal, thus the 2019-2020 NBA salary cap. The numbers are as follows:
2019-2020 NBA Salary Cap Projection: $108,000,000
Year 1 – 2019-2020
Year 2 – 2020-2021
Year 3 – 2021-2022
Year 4 – 2022-2023
Year 5 – 2023-2024
In total, Kawhi could sign a 5 year/$219,240,000 contract with the San Antonio Spurs in the summer of 2018. Because of Rule 3, the San Antonio Spurs are the only team that can offer him this deal.
On the other hand, if Kawhi were to sign with another team during the summer of 2019, he would only be able to sign a max contract of 4 years/$139,320,000. Only the Spurs can offer him a 5 year, 35% of the cap, 8% raise contract as the Supermax deal, and others can only offer a 4 year, 30% of the cap, 5% raise contract. As a result, the Spurs can offer Kawhi nearly $80 million more than any other team in 2019 NBA Free Agency.
Per the rules of a Two-Way contract, Quinn Cook is eligible to travel and practice with the Golden State Warriors during the 2018 NBA Playoffs, but he must be placed on the Inactive List for any and all playoff games. In order for Cook to play during the playoffs, the Warriors have two options to perform before tipoff of the final regular season game (4/10/18 @ Utah Jazz):
a. “Standard NBA Conversion Option.”
This would allow the Warriors to convert Cook’s Two-Way into a “rest-of-season” prorated NBA Veteran’s Minimum contract. Because it is a conversion contract, it cannot last longer than the duration of the Two-Way, which is a one-year deal. Thus, if the Warriors perform this action on April 4, the numbers will be as follows:
(Days on Warriors/Days in NBA Season) * (2YOS Veteran’s Min Salary) = New Contract
(1/177) * $1,471,382 = $8,313
The Cavaliers performed a similar transaction when they signed G Dahntay Jones on the final day of the season last year. Though small in amount, this contract would allow Cook to be moved to the Active List for the 2018 NBA Playoffs.*
b. Standard NBA Contract
This would allow the Warriors to negotiate a new contract with Cook.*
*In either case, the Warriors will need to open up a roster spot for Cook if he were to play during the playoffs. For example, if they waive Omri Casspi, they will likely pay out the remainder of his 1yr/$1,471,382 unless he is claimed off the waivers. The Warriors have used the MLE on Nick Young, and they don’t have the BAE due to being over the Tax Apron. Cook does not have Bird or Early Bird rights either.
I'm Jake, a recent graduate of Duke University pursuing a career in collegiate or professional basketball operations.
Cap #s 2018 - 2019
Salary Cap: $101.869M
Lux. Tax: $123.733M
Tax Apron: $129.827M
Tax Floor: $91.682M
Room MLE: $4.45M