Hardcore and casual NBA fans alike are aware that the Association has a salary cap, limiting the amount that teams can spend on player salaries without the help of various cap exceptions. What's not quite as widely discussed is the league's salary "floor" — the minimum amount a team must spend on player salaries without being penalized.
As Larry Coon explains in his CBA FAQ, 2013/14 is the first season that the minimum team payroll must be 90% of the cap, which works out to $52.811MM. Most teams have comfortably surpassed that salary floor, but not every team is in the clear.
A quick perusal of salary estimates for 2013/14 shows that the Bucks' team salary is about $1.5MM below the minimum threshold. However, for minimum payroll purposes, amnestied salary is counted, so the $6.69MM salary Milwaukee is paying Drew Gooden takes the team comfortably above the floor.
The 76ers, on the other hand, are no longer paying their amnesty victim (Elton Brand) any salary. And according to figures from ShamSports and HoopsWorld, the Sixers currently have just $39,642,581 committed to players for 2013/14, plus cap holds for first-round picks Nerlens Noel and Michael Carter-Williams. Even if we assume that Noel and Carter-Williams sign for the full 120% of their rookie-scale amounts, and that Philadelphia hangs onto all its non-guaranteed players, the team's salary only increases to $45,015,821, still nearly $8MM below the floor.
The Sixers' significant remaining chunk of cap room would make them the odds-on favorites for virtually any free agent they wanted, including restricted T-Wolves big man Nikola Pekovic. But the team has shown little inclination to sign free agents or, for that matter, to build a roster capable of winning games in 2013/14. So how exactly does the club plan to reach the minimum payroll threshold? There are a few options available to them, as follows:
1. Sign free agents.
Extending a $13MM-per-year offer sheet to Pekovic would be an intriguing move for the Sixers, but nothing we've heard since the start of July suggests the team is interested in doing that. Of the other free agents still on the board, few are worth even mid-level type deals, so it would likely take at least two or three smaller signings for Philadelphia to reach the floor.
Overpaying veterans like Chris Duhon, Antawn Jamison, and/or Drew Gooden could bring minimum payroll up to where it needs to be, but would those players sign with a lottery-bound team like the Sixers, even if the price was right? And is Philadelphia even interested in adding that much veteran talent?
2. Make trades.
The Jazz reached the 90% threshold in large part by absorbing several expiring contracts from the Warriors in a deal that netted them multiple future draft picks. I'd imagine Sam Hinkie and the Sixers would be interested in a similar sort of deal, and some in-the-tax teams could be willing trade partners. The Celtics, Heat, Lakers, and Bulls may qualify as teams currently in the tax who would like to try to get out (or at least reduce their bill).
But it won't be easy to make a deal. If the Sixers were to take on, for instance, Kris Humphries, they'd want at least one future first-round pick, and it seems unlikely that Boston would be willing to give up such a pick, having just started stockpiling first-rounders. Other teams, like the Lakers, don't have an excess of future first-rounders available to trade. And the Sixers would likely be reluctant to take on multiyear contracts like Joel Anthony's, Courtney Lee's, or others, since that would compromise the team's 2014 cap space.
There are definitely possibilities here — the Thunder, Pacers, and Grizzlies are all among the other cost-conscious teams who are getting dangerously close to the tax line and could look to cut salary. But it takes at least two teams to make a deal, so the Sixers can't necessarily rely on this option.
Additionally, taking on salary sooner rather than later is important, since minimum payroll is calculated by money actually paid to a player, rather than team salary at year's end. For instance, if the Sixers were to acquire Humphries halfway through the season, he'd only count as $6MM (his remaining salary) rather than $12MM (his full salary) for minimum payroll purposes.
3. Do nothing.
In truth, the Sixers don't need to surpass the minimum payroll threshold this season, and may in fact be perfectly happy sitting on a sub-$50MM payroll through next June. Even if a team doesn't meet the salary floor, the penalties aren't exactly severe. Philadelphia would be required to pay the difference between its payroll and the minimum payroll, with the money divided among the club's players.
For a team that seems more interested in contending for Andrew Wiggins than contending for the postseason, it may be appealing to stay below the salary floor and reward its players with small bonuses for what will certainly be a tough season. If a trade opportunity arises that allows the Sixers can add an asset or two, I'm sure that would be their preference, but remaining below the floor would mean spending the bare minimum, and wouldn't involve bringing in unwanted free agents.
We'll have to wait to find out what the Sixers ultimately decide, but based on how long it's taken the team to hire a new head coach, it's clear that Hinkie and the front office make moves carefully and deliberately. I'll be interested to see where that deliberate approach eventually leads.