Mobile Menu
HEADLINES

Hoops Rumors Originals

Community Shootaround: Early Western Conference Predictions

July 26th, 2018 at 12:44pm CST by Luke Adams

NBA teams aren’t necessarily done reshaping their rosters for 2018/19 quite yet, but nearly all of this summer’s impact free agents are off the board. And unlike last year, when Kyrie Irving was traded in late August and Carmelo Anthony was moved in September, the majority of this year’s biggest-name trade candidates have already been dealt or seem unlikely to go anywhere at this point.

With the major offseason roster moves out of the way, we can start evaluating what the NBA playoff picture might look like next season. We’ll kick off that discussion today by examining the Western Conference, where it took 47 wins to claim a postseason berth this past spring.

The competition in the West figures to be no less fierce in 2018/19. With the possible exception of the Rockets, who lost Trevor Ariza and Luc Mbah a Moute, and the Pelicans, who lost DeMarcus Cousins and Rajon Rondo, none of the eight Western Conference teams from last year look any worse.

The Warriors are bringing back all their key pieces and added Cousins; the Trail Blazers, Timberwolves, and Jazz look almost the same as they did last year, with all their top players still under contract; the Thunder brought back all their most important free agents while adding a couple complementary pieces in Dennis Schroder and Nerlens Noel; and the Spurs replaced a star who appeared in just nine games last season with another All-Star in DeMar DeRozan.

There aren’t many clear candidates to fall out of the top eight in the West, and there are plenty of teams in the bottom seven who improved their rosters and have postseason aspirations. The Lakers‘ addition of LeBron James was the most obvious and noteworthy free agent move made by a Western lottery team, but it was hardly the only one.

The Nuggets re-signed Nikola Jokic and Will Barton while adding Isaiah Thomas, and will have a healthy Paul Millsap this year as they look to improve upon a 46-win season. The Clippers, who finished above .500, are deeper and arguably more talented than they were last season. The Mavericks made a pair of very intriguing additions in DeAndre Jordan and Luka Doncic. The Grizzlies should have Mike Conley at full health to go along with Marc Gasol and newcomers like Kyle Anderson, Jaren Jackson, and Garrett Temple.

We’ve mentioned 13 of the 15 Western Conference teams, with only the Suns and Kings perhaps not viewed as viable playoff threats. Even those clubs have plenty of promising young talent and could theoretically improve upon last season’s results — particularly the Suns, who added Deandre Ayton, Mikal Bridges, and Trevor Ariza.

What do you think? Are there any playoff locks in the West besides the Warriors and Rockets? Which of last year’s teams will fall out of the top eight? Which Western lottery teams are on track to reach the postseason next spring?

Jump into the comment section below to share your two cents and your Western Conference top eight.

Retweet 1 Share 0 Send via email0

How Non-Guaranteed Contract Rules Have Affected Recent Trades

July 25th, 2018 at 12:00pm CST by Luke Adams

As we detailed at length back in March, the NBA’s new Collective Bargaining Agreement made some changes to the trade rules related to non-guaranteed contracts.

Under the NBA’s old CBA, which was in effect through the 2016/17 season, a player’s full salary (not including unlikely incentives) was used for trade purposes, whether or not it was guaranteed. If a player had a $10MM salary with a partial guarantee of $1MM, his outgoing salary in a trade was the same as it would have been for a player who had a fully guaranteed $10MM contract.

[RELATED: Hoops Rumors Glossary: Traded Player Exception]

That’s no longer the case under the league’s new CBA, however. While contracts signed under the old agreement still operate by the old rules, contracts signed after July 1, 2017 are subject to the rules of the current CBA. And under the current CBA, only the guaranteed portion of a player’s contract counts for outgoing salary purposes in a trade, limiting the appeal of non-guaranteed salaries as trade chips.

In the example above, the player with a $10MM salary and a $1MM guarantee would now only count for $1MM for outgoing salary purposes in a trade, but the team acquiring him would still have to consider him a $10MM player.

These new rules have perhaps put a damper on the trade market for players on non-guaranteed contracts this offseason, but there have still been a handful of moves involving those players. Here’s a breakdown of this month’s trades that have featured a non-guaranteed salary, and how the new rules impacted each deal:

Bulls acquire Julyan Stone ($1,656,092 non-guaranteed salary) from Hornets in three-team trade

The Hornets also sent Timofey Mozgov to the Magic for Bismack Biyombo in this deal, and Mozgov’s salary was large enough to match Biyombo’s. As such, it didn’t matter from Charlotte’s perspective that Stone counted as $0 for outgoing salary purposes.

Stone’s inclusion in the trade allowed Chicago to acquire an incoming piece without taking on any guaranteed salary. If Stone hadn’t been a part of the deal, the Bulls would have to receive a draft pick or the NBA rights to a draft-and-stash player just to ensure that they were getting something in the deal. Chicago waived Stone shortly after acquiring him.

Thunder acquire Rodney Purvis ($1,378,242 non-guaranteed salary) from Magic

Purvis was swapped for Dakari Johnson in this deal and both players were on two-year minimum salary contracts. That meant that each team could acquire its incoming player using the minimum salary exception without having to worry about matching salaries.

Under the old rules, each club would have created a $1,378,242 traded player exception in the deal — that’s the amount of Purvis’ 2018/19 salary as well as Johnson’s. Under the new rules, however, only the Thunder could create such an exception, since Johnson’s salary was guaranteed. Purvis counted as $0 for Orlando’s outgoing salary purposes, so the Magic were unable to create a TPE as a result of the swap.

Thunder acquire Abdel Nader ($450,000 of $1,378,242 salary guaranteed) from the Celtics in exchange for Rodney Purvis ($1,378,242 non-guaranteed salary)

This is the most interesting deal of the three. Although Nader is technically earning the minimum salary, his deal runs longer than two years, meaning the Thunder couldn’t use the minimum salary exception to acquire him. They also couldn’t match salaries using Purvis, since he counted as a $0 outgoing salary.

So how did the Thunder acquire Nader? Using that traded player exception they’d just created in their deal with the Magic. Because Johnson and Nader had equal $1,378,242 salaries, Oklahoma City used up the entire trade exception just three days after it was created, making it the rare TPE to be used in full.

Meanwhile, the Celtics acquired Purvis using the minimum salary exception, but were only able to create a $450K trade exception for Nader — that’s the amount of his partial guarantee, so that was his outgoing-salary amount from Boston’s perspective.

Note: Richaun Holmes and Isaiah Whitehead, both on non-guaranteed contracts, were also involved in trades this month, but they were signed under the old CBA. As such, their contracts operated under the old rules.

Retweet 3 Share 0 Send via email0

How Teams Are Using 2018/19 Bi-Annual Exceptions

July 24th, 2018 at 10:01am CST by Luke Adams

The bi-annual exception is one of the tools available to NBA teams who are over the cap, giving those clubs the flexibility to offer free agents more than the minimum salary. In 2018/19, the bi-annual exception is worth $3.382MM, and can be used to offer a deal worth up to about $6.933MM over two years.

However, the bi-annual exception isn’t available to every team. Clubs that go below the cap in order to use cap room lose access to the exception. Additionally, using the BAE imposes a hard cap of $129.817MM (the tax apron) on a club. So if a team has surpassed the tax apron – or wants to retain the flexibility to do so – that team can’t use the bi-annual exception.

Finally, as its name suggests, the bi-annual exception can’t be used by a team in consecutive years. In 2017/18, three teams used the BAE — the Grizzlies (Tyreke Evans), the Rockets (Tarik Black), and the Pistons (Anthony Tolliver). As such, the exception isn’t available to those clubs during the 2018/19 league year. They’ll be able to use it again next summer.

With all those factors in mind, here’s a breakdown of how teams are using – or not using – their respective bi-annual exceptions in 2018/19:

BAE Still Available:

  • Charlotte Hornets
  • Cleveland Cavaliers
  • Los Angeles Clippers
  • Minnesota Timberwolves
  • Orlando Magic
  • Utah Jazz

Unless a taxpaying team drastically cuts costs at some point, the seven clubs listed above are the only ones that could still use their bi-annual exception at some point during the 2018/19 season.

Four these seven teams – the Hornets, Clippers, Timberwolves, and Knicks – have already hard-capped themselves by using more than the taxpayer portion of the mid-level exception, so they could theoretically use their BAEs without worrying about further restrictions. The Cavaliers, Magic, and Jazz may be more reluctant to use theirs, particularly since they all have significant portions of the MLE still available.

BAE Unavailable:

Used:

  • Milwaukee Bucks
  • New Orleans Pelicans
  • New York Knicks
  • San Antonio Spurs

Went under cap:

  • Atlanta Hawks
  • Brooklyn Nets
  • Chicago Bulls
  • Dallas Mavericks
  • Indiana Pacers
  • Los Angeles Lakers
  • Philadelphia 76ers
  • Phoenix Suns
  • Sacramento Kings

Over or near tax apron:

  • Boston Celtics
  • Denver Nuggets
    • Note: The Nuggets have shed salary since being over the tax apron, but they’re ineligible to use the BAE because they used a portion of their taxpayer mid-level exception.
  • Golden State Warriors
  • Miami Heat
  • Oklahoma City Thunder
  • Portland Trail Blazers
  • Toronto Raptors
  • Washington Wizards

Used last year:

  • Detroit Pistons
  • Houston Rockets
  • Memphis Grizzlies

Salary information from Bobby Marks of ESPN and Eric Pincus of Basketball Insiders was used in the creation of this post.

Retweet 1 Share 0 Send via email0

How Teams Are Using 2018/19 Mid-Level Exceptions

July 23rd, 2018 at 1:50pm CST by Luke Adams

In addition to receiving nearly $102MM in cap room and being allowed to surpass that threshold in order to sign players using Bird Rights or the minimum salary exception, each NBA team also receives a mid-level exception. The value of this exception varies depending on a club’s total team salary.

A team that goes under the cap to use its available cap room, for instance, receives only a modest form of the MLE known as the room exception. An over-the-cap team receives the full mid-level exception, unless that team is also over the tax line, in which case it gets a taxpayer version of the MLE that falls in between the full MLE and the room exception. We detailed the exact values of each form of mid-level exception earlier this offseason, but here’s a quick breakdown:

  • Room exception: Can be used for contracts up to two years, with a starting salary worth up to $4.449MM.
  • Taxpayer mid-level exception: Can be used for contracts up to three years, with a starting salary worth up to $5.337MM.
  • Full mid-level exception: Can be used for contracts up to four years, with a starting salary worth up to $8.641MM.

Now that a majority of the NBA’s teams have used up their cap space, it’s worth keeping an eye on which teams still have part or all of their mid-level exceptions available, which we’ll do in the space below. This list will be kept up to date throughout the 2018/19 league year.

Here’s where things currently stand:

Mid-Level Exception:

Boston Celtics

  • Available: $5,337,000 (taxpayer)
  • Used: $0

Charlotte Hornets

Cleveland Cavaliers

Denver Nuggets

Detroit Pistons

Golden State Warriors

Houston Rockets

Los Angeles Clippers

Memphis Grizzlies

Miami Heat

Milwaukee Bucks

Minnesota Timberwolves

New Orleans Pelicans

New York Knicks

Oklahoma City Thunder

Orlando Magic

Portland Trail Blazers

San Antonio Spurs

Toronto Raptors

  • Available: $5,337,000 (taxpayer)
  • Used: $0

Utah Jazz

  • Available: $8,641,000
  • Used: $0

Washington Wizards

Room Exception:

Atlanta Hawks

  • Available: $99,000
  • Used: $4,350,000 (Alex Len)

Brooklyn Nets

  • Available: $0
  • Used: $4,449,000 (Ed Davis)

Chicago Bulls

  • Available: $4,449,000
  • Used: $0

Dallas Mavericks

  • Available: $4,449,000
  • Used: $0

Indiana Pacers

Los Angeles Lakers

Philadelphia 76ers

  • Available: $4,449,000
  • Used: $0

Phoenix Suns

Sacramento Kings

Salary information from Basketball Insiders and ESPN was used in the creation of this post.

Retweet 9 Share 0 Send via email0

Weekly Mailbag: 7/16/18 – 7/22/18

July 22nd, 2018 at 12:46pm CST by Arthur Hill

We have an opportunity for you to hit us up with your questions in this, our weekly mailbag feature. Have a question regarding player movement, the salary cap or the NBA draft? Drop us a line at HoopsRumorsMailbag@Gmail.com.

Who do you think got the steal of the draft at the center position? The Celtics with Robert Williams or the Knicks with Mitchell Robinson, who averaged five blocks per game in the summer league? — Greg Dizon

Robinson was the clear winner in summer league and looks like the primary backup to Enes Kanter after his outstanding performance in Las Vegas. Williams, meanwhile, was sidelined by a sore left knee and didn’t see any action. Summer league can be deceiving, of course, and none of this means Robinson will be a better player than Williams, either this season or throughout his NBA career. He still needs to develop an offensive game, and he is behind schedule overall after not playing in college. However, Knicks fans need something to be excited about and the summer performance of Robinson and Kevin Knox certainly provides that.

Who should the Mavericks look at in free agency to account for the loss on the wing with the departures of Seth Curry, Doug McDermott and Yogi Ferrell, or would a trade make more sense at this point? — M.D. Jordan Sports, via Twitter

Dallas is using the last of its cap space to re-sign Dirk Nowitzki and will have just the $4.45MM room exception available, so the options are limited. Rodney Hood is probably the top wing player left on the market, but he’s a restricted free agent and the Cavaliers would happily match an offer that started at $4.45MM. David Nwaba, who is now unrestricted after the Bulls pulled their qualifying offer, could be an interesting option if he doesn’t get a better offer somewhere else. Beyond that, the free agent pool is filled with veterans such as Jamal Crawford, Corey Brewer, Nick Young, Devin Harris and Arron Afflalo, none of whom would have a long-term future with the Mavericks.

I know Chandler Parsons‘ contract is bigger, but with the right adjustments, would a Luol Deng for Parsons trade work? The Grizzlies seem like a team that could at least try using Luol on the court, and an on-point Chandler alongside LeBron James would be awesome. Then again, I’m on the fence with Parsons, I understand why Houston, Dallas and Memphis were willing to pay him, but I also understand why they regret it. — Nicolas Galipeau

The Lakers are still in the business of trying to preserve as much cap space as possible for next year’s free agent frenzy. It’s unlikely they would gamble on Parsons even without the scary injury history. Deng and Parsons benefited from the irrational contracts that were handed out in 2016 and both have become salary cap albatrosses. Deng will make $36.8MM over the next two seasons, while Parsons is due more than $49.2MM. Their salaries make them virtually untradable, even for each other. It’s much more likely that the Lakers will use the stretch provision to make Deng’s deal less of an impediment to their free agent plans.

Retweet 1 Share 0 Send via email0

Community Shootaround: Carmelo In Houston

July 21st, 2018 at 8:28pm CST by Arthur Hill

Carmelo Anthony‘s path to the Rockets now seems clear after an agreement was reached this week on a three-team trade that will send him to the Hawks, who will buy him out. Once that process plays out and Anthony clears waivers, he will be free to sign with anybody, but it’s a poorly kept secret that he plans to head to Houston.

There’s a lot to be figured out about what Anthony’s role will be with the Rockets, but he didn’t exactly excel as a third option in Oklahoma City. His playing time dropped to a career-low 32.1 minutes per game last season and his scoring average fell bellow 20 PPG for the first time since he entered the NBA in 2003.

After winning 65 games and reaching the Western Conference finals, Houston suffered a couple of key personnel losses. Trevor Ariza signed with the Suns on the first night of free agency, and Luc Mbah a Moute left for the Clippers soon afterward. That’s a loss of two defensive specialists who match up very well with the Warriors, while Anthony represents a question mark on both counts.

There have been whispers that the Rockets may be considering a sixth-man spot for Anthony, with defensive-minded free agent addition James Ennis taking Ariza’s spot in the starting lineup. Chris Paul, one of Anthony’s close friends, may be able to sell him on the idea, but his response when asked about a similar role with the Thunder isn’t encouraging.

“I’m not sacrificing no bench role,” he told ESPN’s Royce Young in April. “So that’s out of the question.” (Twitter link).

Anthony brings extra firepower to a Rockets offense that is already loaded. As several observers have noted, he is most effective when playing with elite passers — as he has done on the Olympic team — and he’ll have those in Houston with Paul and James Harden. However, the move from Ariza to Anthony won’t be a seamless switch. They are very different types of players, and many writers are predicting a greater gap between the Warriors and Rockets with Anthony on board.

We want to get your prediction. Will a move to Houston bring out the best in Anthony’s game, or will he be a distraction on offense and a liability on defense? Please leave your answers in the space below.

Retweet 8 Share 0 Send via email0

Hoops Rumors Originals: 7/14/18 – 7/21/18

July 21st, 2018 at 3:36pm CST by clarkcrum

Every week, the writing team here at Hoops Rumors creates original content to complement our news feed. Here are our segments and features from the past seven days:

Retweet 1 Share 0 Send via email0

Max Amount Each NBA Team Can Offer FAs

July 20th, 2018 at 2:52pm CST by Luke Adams

We’re nearly three weeks into the NBA offseason, and cap room around the league has dried up. Only the Kings still have substantial cap room, with more than $20MM in space still available.

However, Sacramento isn’t the only team capable of making a competitive offer to the remaining free agents. Many other clubs around the league still have various exception money available that could be put toward a free agent signing.

With the help of information from ESPN’s Bobby Marks and Basketball Insiders, we’ve listed below the maximum starting salary that each of the NBA’s 30 teams can offer an outside free agent right now. Teams can potentially offer more to their own free agents if they hold some form of Bird rights.

Because we’re listing the maximum starting salary a team has to offer, this list doesn’t necessarily take into account every one of a club’s exceptions. For instance, if a team has its $8.64MM mid-level exception and its $3.38MM bi-annual exception available, we won’t list their BAE here.

These figures could change if teams make other roster moves, and in some cases using the maximum available amount on a free agent would create a hard cap or tax-related concerns for the club.

Here’s the breakdown:

  1. Sacramento Kings: $20.52MM (cap room)
  2. Cleveland Cavaliers: $8.64MM (MLE)
  3. Utah Jazz: $8.64MM (MLE)
  4. Orlando Magic: $6.75MM (MLE)
  5. Boston Celtics: $5.34MM (tax MLE)
  6. Houston Rockets: $5.34MM (tax MLE)
  7. Miami Heat: $5.34MM (tax MLE)
  8. Oklahoma City Thunder: $5.34MM (tax MLE)
  9. Toronto Raptors: $5.34MM (tax MLE)
  10. Atlanta Hawks: $4.45MM (room exception)
  11. Chicago Bulls: $4.45MM (room exception)
  12. Dallas Mavericks: $4.45MM (room exception)
    • The Mavericks are reportedly using their remaining cap room (more than $4.45MM) to re-sign Dirk Nowitzki.
  13. Los Angeles Lakers: $4.45MM (room exception)
  14. Philadelphia 76ers: $4.45MM (room exception)
  15. Phoenix Suns: $4.45MM (room exception)
  16. Detroit Pistons: $3.73MM (MLE)
  17. Charlotte Hornets: $3.38MM (bi-annual exception)
  18. Los Angeles Clippers: $3.38MM (bi-annual exception)
  19. Minnesota Timberwolves: $3.38MM (bi-annual exception)
  20. New York Knicks: $3.38MM (bi-annual exception)
  21. San Antonio Spurs: $3.38MM (bi-annual exception)
  22. Denver Nuggets: $2.5MM (tax MLE)
  23. Portland Trail Blazers: $1.7MM (tax MLE)
    • For players with five or more years of NBA experience, the minimum salary would be worth more.
  24. Milwaukee Bucks: $1.64MM (MLE)
    • For players with five or more years of NBA experience, the minimum salary would be worth more.
  25. Brooklyn Nets: Minimum salary
    • The Nets are reportedly using their $4.45MM to sign Ed Davis.
  26. Golden State Warriors: Minimum salary
  27. Indiana Pacers: Minimum salary
  28. Memphis Grizzlies: Minimum salary
  29. New Orleans Pelicans: Minimum salary
  30. Washington Wizards: Minimum salary
Retweet 6 Share 0 Send via email0

Hoops Rumors Glossary: Exhibit 10 Contract

July 19th, 2018 at 3:16pm CST by Luke Adams

After the NBA’s biggest-name free agents come off the board, many teams shift their focus to filling out their training-camp rosters. Teams can only carry 15 players on NBA contracts (plus two on two-way deals) during the regular season, but their maximum roster size increases to 20 players in the offseason, allowing clubs to bring a few extra players to camp to audition for a place on the regular-season roster or a spot on the team’s G League affiliate.

Many of those players will sign a contract with an Exhibit 10 clause. Introduced in the NBA’s most recent Collective Bargaining Agreement, Exhibit 10 contracts are one-year deals worth the minimum salary. They don’t come with any compensation protection, but can include an optional bonus ranging from $5K to $50K.

Let’s say an undrafted rookie signs an Exhibit 10 contract with the Knicks that includes a $50K bonus. He attends camp with the Knicks, but is waived before the regular season begins, with New York designating him an affiliate player in order to retain his G League rights. In that scenario, if the rookie elects to play in the G League for the Westchester Knicks and remains with the club for 60 days, he’d be entitled to his full $50K bonus.

The player wouldn’t receive that bonus if he opts to sign with a team overseas after being waived by the Knicks. Essentially, the Exhibit 10 bonus serves as an incentive for players to stick with their team’s G League affiliate — they must spend at least 60 days with the NBAGL club in order to get their bonus.

There’s another scenario in which that undrafted rookie who signs an Exhibit 10 deal with the Knicks would receive his $50K. Exhibit 10 contracts can be converted into two-way contracts, so if New York opted to do that before the season begins, the $50K bonus would turn into a salary guarantee for the player. As soon as his contract becomes a two-way deal, he’s entitled to that bonus, even if the Knicks waive him a week later.

Only teams with a G League affiliate can include an Exhibit 10 bonus in a contract. In 2018/19, the Wizards will become the 27th NBA team with its own affiliate, leaving only the Pelicans, Trail Blazers, and Nuggets on the outside looking in. Those clubs could technically sign players to Exhibit 10 deals, but wouldn’t be able to include bonus money.

Here are a few more notes relating to Exhibit 10 contracts:

  • A team can’t carry more than six Exhibit 10 contracts at a time.
  • An Exhibit 10 contract can only be converted to a two-way deal before the regular season begins.
  • An Exhibit 10 contract that gets converted to a two-way deal can later be converted into a standard NBA contract.
  • An Exhibit 10 bonus earned by a player who ends up in the G League or on a two-way contract isn’t counted toward the NBA team’s total salary.

Note: This is a Hoops Rumors Glossary entry. Our glossary posts will explain specific rules relating to trades, free agency, or other aspects of the NBA’s Collective Bargaining Agreement. Larry Coon’s Salary Cap FAQ was used in the creation of this post.

Retweet 15 Share 0 Send via email0

Financial Impact Of Leonard/DeRozan Blockbuster

July 18th, 2018 at 3:54pm CST by Luke Adams

The blockbuster trade completed today by the Spurs and Raptors involving Kawhi Leonard and DeMar DeRozan will, of course, have massive on-court ramifications for both teams. However, it’s also worth taking a closer look at the deal from a financial perspective to see exactly how it worked, how it will impact the players involved, and how it will affect the Spurs’ and Raptors’ short- and long-term cap outlook.

Let’s dive right in and examine the financial implications of today’s mega-deal…

No more Designated Veteran Extension for Kawhi

By earning a spot on the All-NBA First Team in two of the last three seasons, Leonard became eligible for a super-max contract known as a Designated Veteran Extension. Generally, players with Leonard’s years of NBA experience are only eligible for maximum-salary contracts worth up to 30% of the cap, but Kawhi’s All-NBA nods qualified him for a deal starting at up to 35% of the cap in 2019/20.

As we outlined on Tuesday, a five-year Designated Veteran Extension starting in ’19/20 is currently worth a projected $221MM+ based on the NBA’s latest cap projections. However, since a player can only get that form of contract extension from the team that signed him to his initial rookie scale extension, Leonard will no longer qualify. Instead, he’ll be eligible next summer for a five-year deal with the Raptors worth a projected $189.66MM, or a four-year contract with another team worth a projected $140.6MM.

While many observers will say that Leonard “lost” $30MM+ (or $80MM) due to today’s trade, that’s not necessarily accurate. There’s no guarantee that San Antonio would have put that Designated Veteran Extension offer on the table for Kawhi as he came off an injury-plagued season, so it’s not as if he formally turned down $221MM+. Depending on how his 2018/19 season plays out, there’s also no guarantee he’ll be in line for a max deal next offseason — a lot can change in a year.

Still, Leonard’s maximum possible earnings for the next several years have a lower ceiling as a result of today’s trade.

Leonard gets a trade bonus

It wasn’t all bad news for Leonard, who lost access to that super-max extension and will move to Canada from Texas, a state with no income tax. His contract included a 15% trade kicker, so he’ll receive a modest bonus as a result of today’s trade.

Because player-option years aren’t taken into account when calculating trade bonuses, Leonard’s 15% trade kicker will only apply to his $20,099,189 salary for 2018/19. His 15% bonus will be worth $3,014,878, increasing his ’18/19 earnings to $23,114,067.

How salary-matching worked in the trade

Due to the size of the contracts changing hands in this deal, both the Raptors and Spurs were permitted to take back up to 125% (plus $100K) of their outgoing salaries. This was slightly complicated by the fact that Leonard counted for $20,099,189 (no trade kicker) from the Spurs’ perspective and $23,114,067 (15% trade kicker) from the Raptors’ perspective.

For the Spurs, simply sending out Leonard wasn’t enough to take back DeRozan ($27,739,975), let alone Jakob Poeltl ($2,947,320). San Antonio had to include more salary in the swap, which was one reason why Danny Green ($10,000,000) was part of the deal. Combining Leonard’s and Green’s cap hits, San Antonio was eligible to absorb up to about $37.72MM. DeRozan and Poeltl comfortably fit within that threshold.

For the Raptors, simply sending out DeRozan’s $27,739,975 salary allowed them to take back up to about $34.77MM. That was more than enough to absorb both Leonard and Green, even after taking into account Kawhi’s trade kicker.

Since Poeltl wasn’t needed for salary-matching purposes, the Raptors will create a traded player exception worth his $2,947,320 salary. It’s the only TPE generated in the deal, and Toronto will have until July 18, 2019 to use it.

Impact on 2018/19 cap outlook

In an unusual development, both the Spurs’ and Raptors’ team salaries will actually increase as a result of this deal due to Leonard’s trade kicker. That’s not a big deal for San Antonio, whose team salary will only increase very marginally — the Spurs are still well below the luxury-tax threshold.

For the Raptors though, the modest increase in 2018/19 salary will have an impact. By my count, the club now has about $138.99MM committed to 13 players. That would result in a total tax bill of about $29.59MM, and that number will increase when Toronto fills out its roster with a 14th player.

A cost-cutting move is a possibility for the Raptors. C.J. Miles ($8,333,333) and Norman Powell ($9,367,200) became more expendable today with Leonard and Green joining the small forward mix, so perhaps Toronto will explore moving one of them. For now though, this projects to be one of the league’s most expensive rosters.

Impact on 2019/20 and beyond

While the Raptors added a little salary for 2018/19, they cleared their cap for future seasons in today’s deal. DeRozan remains under contract for $27,739,975 in 2019/20, with a player option worth the same amount in 2020/21, while Poeltl has a ’19/20 team option worth $3,754,886. Conversely, Leonard and Green are on expiring contracts.

Prior to today’s trade, the Raptors had $113.27MM in projected guaranteed money on their cap for 2019/20, with player options for Miles and Jonas Valanciunas bringing that number up to $139.62MM. In other words, the team was a strong bet to remain in the tax again next season.

By removing $31.49MM from that total in today’s deal, the Raps no longer project to be a tax team in 2019/20. They probably won’t have cap room, which would be a problem if Leonard walks. But the club would be loaded with expiring contracts in that scenario — by 2020/21, only Powell ($10,865,952) and OG Anunoby ($3,872,215) remain on the books, creating a ton of flexibility for Toronto to go in any number of directions a couple years from now if the Leonard experiment doesn’t work.

As for the Spurs, they’ve significantly reduced their potential cap flexibility for next summer, with their projected guarantees increasing from about $59.16MM to $90.65MM, by my count. That total doesn’t include Marco Belinelli‘s player option or Bryn Forbes‘ salary, since the exact details of those newly-signed contracts aren’t yet known. With a cap of $109MM projected for 2019/20, the Spurs may not end up having any real space available.

The Spurs’ 2020/21 outlook might not be impacted by the deal, since DeRozan and Poeltl can both reach free agency that year. However, if DeRozan exercises his $27,739,975 player option and the Spurs look to lock up Poeltl beyond his rookie deal, those deals would once again eat into the club’s projected space.

Photos courtesy of USA Today Sports Images. Salary information from Basketball Insiders was used in the creation of this post.

Retweet 3 Share 0 Send via email0
Load More Posts