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Four Teams Who Could Become Taxpayers By Re-Signing Key Free Agents

June 7th, 2018 at 3:59pm CST by Luke Adams

The Cavaliers, Warriors, and Thunder had the three most expensive rosters in the NBA in 2017/18, finishing the season well over the tax line. While those three clubs don’t currently project to be taxpayers again in 2018/19, that will change quickly if they’re able to re-sign their top free agents.

If LeBron James returns to Cleveland, Kevin Durant re-ups with the Dubs, and Paul George remains in Oklahoma City, all three clubs will blow past the luxury-tax threshold once again, barring separate cost-cutting moves.

For those teams, the possibility of going back into tax territory and continuing to run their repeater-tax clocks probably isn’t particularly appealing. But based on their high payrolls this past season, we know that ownership is willing to pay those penalties to contend, if necessary.

Heading into the 2018 offseason, there are several more clubs who could see their respective team salaries surpass the tax line if they re-sign certain free agents, and it remains to be seen just how comfortable some of those ownership groups are with the idea of becoming taxpayers.

Here are four teams whose team salaries are worth watching as they navigate free agency:

  1. Houston Rockets: With a little less than $78MM in guaranteed salaries on their books for 2018/19 at the moment, the Rockets appear to have some breathing room. However, lucrative new contracts for Clint Capela and Chris Paul would quickly change that equation. If we assume Paul gets a maximum-salary deal and Capela receives a starting salary in the range of $15-20MM, that would mean adding $50-55MM to Houston’s 2018/19 cap, which would put the team over the projected tax line with only eight players under contract. Ditching Ryan Anderson‘s contract would almost certainly be the club’s preferred method of avoiding a massive tax bill, but as we saw last offseason when the Rockets unsuccessfully shopped Anderson in trade talks, that won’t be easy.
  2. New Orleans Pelicans: With seven players on guaranteed contracts worth about $93MM, the Pelicans will get into some financial trouble if they re-sign DeMarcus Cousins to a pricey new contract. Even if we assume Cousins’ Achilles injury will prevent him from landing a max deal, he’s probably a good bet for a starting salary in the neighborhood of $20-25MM. Filling out the rest of the roster with minimum-salary contracts around Cousins and their other seven players would see New Orleans carry a team salary in the $122-127MM range — and that’s a conservative estimate which doesn’t include another important free agent, Rajon Rondo. Solomon Hill ($12.75MM) would be the most logical trade or release candidate if the Pels need to cut costs.
  3. Portland Trail Blazers: A solid but unspectacular season for Jusuf Nurkic should ensure that the Trail Blazers won’t have to pay him near-max money to keep him. Still, Portland is already carrying more than $110MM in guaranteed money for eight players, and Nurkic is probably worth an eight-figure salary. If the Blazers want to bring him back and avoid the tax, it’s possible we’ll see the team try to move one or more highly-paid players like Evan Turner ($17.87MM), Maurice Harkless ($10.84MM), or Meyers Leonard ($10.6MM).
  4. Denver Nuggets: While the Nuggets only have about $85.6MM in guaranteed 2018/19 money on their cap, a pair of player options for Wilson Chandler and Darrell Arthur figure to increase that total to about $105.9MM. Will Barton will also be due a raise, increasing team salary even further if he’s re-signed. But the real killer will be a potential extension for Nikola Jokic. Denver could probably avoid the tax by simply exercising Jokic’s cheap team option for 2018/19, but doing so would put him on track to become an unrestricted free agent in 2019 and wouldn’t sit well with the young center’s camp. Turning down the option, making him a restricted free agent, and locking him up to a mega-deal this offseason might be the Nuggets’ best move, but doing so would likely put the team over the tax line. Chandler ($12.8MM), Arthur ($7.46MM), Kenneth Faried ($13.76MM), and Mason Plumlee ($12.92MM) would become trade or release candidates in that scenario.

The Toronto Raptors deserve an honorable mention on this list, since re-signing Fred VanVleet would create some financial issues for them. However, even if they let VanVleet walk, the Raps will need to find a way to shed some salary in order to avoid becoming a taxpayer. Toronto already has more than $126MM in guaranteed contracts on its 2018/19 books without accounting for VanVleet.

Photo courtesy of USA Today Sports Images.

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Latest On Paul George’s Free Agency

June 5th, 2018 at 9:21pm CST by ChrisCrouse

Paul George has one season remaining on his contract, but he’s expected to opt out of his deal this summer and become a free agent. ESPN’s Adrian Wojnarowski discussed George’s future on the network’s NBA Draft Special (h/t Brett Dawson of The Oklahoman), explaining how the Thunder are now in a better position to keep George than they were last offseason.

“Oklahoma City’s done a great job of selling him on a future there, and he liked playing with Russell Westbrook and Steven Adams and Billy Donovan,” Wojnarowski said.

While OKC has an opportunity to keep George, the Lakers remain a serious threat. George and LeBron James will at least discuss the possibility of teaming up in Los Angeles prior to free agency, per Woj.

The Rockets will be aggressive in their pursuit of George. While Houston isn’t expected to have salary cap space, we saw what GM Daryl Morey is capable of in last summer’s Chris Paul deal. Morey and the Rockets will search for a way to get George on the roster should the small forward have interest in joining the club.

Wojnarowski also mentions that the Sixers would be a good fit for George. Philadelphia has slightly over $67.4MM in guaranteed salary on the books with the cap projected to come in at $101MM.

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Chris Paul Unlikely To Do Team-Friendly Deal With Rockets?

June 5th, 2018 at 3:07pm CST by Luke Adams

Heading into last summer’s free agent period, it looked as if Chris Paul was poised to opt out of his contract and sign a new max deal. When he picked up his player option instead as part of a trade to Houston, there was a belief that CP3 and the Rockets had an understanding about what his next contract would look like. ESPN’s Adrian Wojnarowski suggested as much during a recent podcast, as Shane Mickle of ClutchPoints.com notes.

“When the Rockets made that deal for Chris Paul, knowing they would re-sign him, they made a conscious decision that they were going to have to live with [a] $46-47MM salary when he’s not nearly the player anymore in his late 30s, but, ‘We’re going to make a run at it now, we want to win a championship now. We’ll deal with it [Paul’s contract] later,'” Wojnarowski said, according to Mickle.

“We’ll see how that plays out in their contract talks [with Paul] here in free agency,” Wojnarowski continued. “Chris Paul didn’t turn down $200MM from the Clippers because he thought that somehow the Rockets were gonna talk him into saving them luxury tax money. I don’t imagine it playing out that way.”

While it sounds like Wojnarowski expects Paul to look to maximize his earnings, the Rockets are headed way into tax territory if both CP3 and Clint Capela sign lucrative new deals. It will be interesting to see whether GM Daryl Morey and the Houston front office can convince the veteran point guard to take any sort of discount in order to help accommodate other roster reinforcements.

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Rockets Confident Heading Into Free Agency

June 3rd, 2018 at 12:59pm CST by Arthur Hill

The Pelicans may have put themselves in position to be competitive on their free agent market, but GM Dell Demps hasn’t indicated if that’s the strategy he plans to pursue, writes Scott Kushner for The Advocate. New Orleans earned the sixth seed and swept its way into the conference semifinals, giving the team a reputation that it didn’t have last year when P.J. Tucker passed on an offer and signed with the Rockets for $3MM less.

  • After falling a game short of the NBA Finals, the Rockets are confident they can land a top free agent this summer, relays Stefano Fusaro of ESPN. Houston has its own concerns with Chris Paul, Clint Capela, Trevor Ariza and Luc Mbah a Moute all headed for free agency, but owner Tilman Fertita has expressed a willingness to pay the luxury tax to compete for a title. “With our winning and the stories around the league about our locker room, our players and our coaches, we are going to have our pick of plenty of free agents out there,” said GM Daryl Morey.
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And-Ones: 2018/19 Odds, Fredette, Hensley, USA Basketball

June 3rd, 2018 at 10:21am CST by Arthur Hill

The Warriors have already been set as the favorites to win the 2018/19 title, relays Ben Fawkes of ESPN, but there’s a huge variable that hangs over the equation. The Westgate Las Vegas SuperBook gives Golden State 5-4 odds to capture the championship, followed at 7-2 by the Rockets and Sixers, two teams believed to be in the running to sign LeBron James.

“When you have LeBron in free agency, you have to be careful,” oddsmaker John Murray said. “You’ve got Philadelphia, Miami, the Lakers and even Houston as potential destinations [outside of Cleveland]. We cut all of those teams’ odds down, and we’ll raise back up the teams he doesn’t sign with.”

Murray adds that the Rockets would take over as favorites if they are able to add James and keep Chris Paul and Clint Capela. The Celtics, who come in at 8-1, will be favored to win the East if James leaves Cleveland and goes anywhere but Philadelphia. The Lakers and Heat are tied for fifth place at 20-1, followed by the Spurs at 25-1 and the Cavaliers at 30-1.

There’s more basketball-related news to pass along:

  • Former lottery pick Jimmer Fredette hopes to use The Basketball Tournament this summer to get another shot at the NBA, writes Myron Medcalf of ESPN. The 10th selection in the 2011 draft, Fredette played for four teams in five years before heading overseas. “I would always love to get another chance in the NBA,” Fredette said. “I’ve gotten better in China and improved every year. … You hope somebody takes notice.” He has another year remaining on his Chinese Basketball Association contract.
  • J.R. Hensley, a prominent NBA agent, has been placed on 18 months’ probation, tweets Liz Mullen of Sports Business Journal. The action came because Hensley refused to fully cooperate in an investigation of potential violations, according to a press release from the NBPA.
  • The USA Men’s Under 18 National Team made its first round of cuts this morning, trimming the squad from 33 players to 18. Adam Zagoria of ZagsBlog has the complete list of players who advanced.
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Gersson Rosas Withdraws From Consideration For Pistons GM Job

June 1st, 2018 at 7:24pm CST by marksuleymanov

Rockets executive Gersson Rosas has withdrawn from consideration for the Pistons‘ general manager/senior basketball leadership position, ESPN’s Adrian Wojnarowski reports.

Rossas has spent more than a decade with the Rockets and is currently the executive vice president of basketball operations for the team. A close associate of general manager Daryl Morey, Rosas had a brief stint as Mavericks general manager in 2013 but returned to Houston shortly thereafter.

This is the latest development today in the Pistons’ search for a GM as the team parted ways with the incumbent, Jeff Bower. Bower was former head coach Stan Van Gundy‘s right-hand man and viewed as a possible long-term solution.

Ed Stefanski was hired last week as a senior advisor in charge of overhauling the team’s basketball operations.

As Brian Lewis of the New York Post noted, Nets assistant GM Trajan Langdon remains a top contender for the Pistons’ vacancy.

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Rockets GM Confident In Chris Paul’s Future With Team

May 31st, 2018 at 9:44pm CST by marksuleymanov

Despite going up 3-2 against the Warriors in the Western Conference Finals, the Rockets failed to win the series and the absence of Chris Paul played a huge part. The Houston point guard suffered a Grade 2 strain of his right hamstring, sidelining him for both Game 6 and Game 7 of the series.

After meeting with Paul, both Rockets general manager Daryl Morey and head coach Mike D’Antoni came away feeling optimistic about his free agency plans, Jonathan Feigen of the Houston Chronicle writes. Paul will hit unrestricted free agency this summer and will be a highly sought-after free agent. In his first season with Houston, Paul averaged 18.6 PPG, 7.9 APG, and 5.4 RPG.

It has been believed that Paul, along with possible 2017/18 NBA Most Valuable Player James Harden, will help the Rockets recruit big name free agents this summer.

With an injury shortening his postseason and possibly costing Houston a trip to the NBA Finals, Paul was hit the hardest by the loss and will be on a mission to improve, according to Morey.

“He took it the hardest, I thought, because he knew if he hadn’t had the unfortunate injury, he’s dragging us the last (way to the Finals),” Morey said.“He’s been there before at those moments and got injured sometimes. Yeah, he took it hard. But you know what, he’ll be back. He’ll be back 100% and we’re ready to go.”

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Rockets Notes: Paul, Capela, Offseason, Gentile

May 30th, 2018 at 3:03pm CST by Luke Adams

Having assumed control of the Rockets last fall, new owner Tilman Fertitta is entering his first offseason with the franchise, and predictably identified re-signing free agents Chris Paul and Clint Capela as his club’s top priorities, as Mark Berman of FOX 26 Houston relays (video link).

Outside of bringing back those two key players, Fertitta believes the Rockets don’t need to make major adjustments to their roster, though GM Daryl Morey will certainly do all he can to bring in reinforcements. The Rockets’ owner also expressed confidence that the club will be in position to make another deep playoff run next spring.

“We’re going to be back,” Fertitta said, per Berman (video link). “We have a great team, great coaches, and we have a great organization. You’re not going to see a lot of change over the year. You don’t mess with success.”

Here’s more on the Rockets:

  • ESPN’s Bobby Marks (Insider link) takes an in-depth look at Houston’s coming offseason, breaking down the possibility of the Rockets acquiring LeBron James, exploring what Chris Paul‘s next contract will look like, and explaining why Clint Capela‘s agent figures to use Rudy Gobert and Steven Adams as points of comparison for his client.
  • Capela is considered a very good bet to return to the Rockets, but Frank Urbina of HoopsHype identifies a few other clubs who could make a play for the restricted free agent this offseason.
  • After initially committing to playing on the Rockets’ Summer League roster this July, draft-and-stash prospect Alessandro Gentile will likely have to miss Summer League and the next FIBA World Cup qualifiers. As Emiliano Carchia of Sportando details, Gentile is undergoing surgery to repair a fractured finger on his right hand.
  • On Tuesday, we took a closer look at the Rockets’ cap situation entering the 2018 offseason.
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2018 NBA Offseason Salary Cap Digest: Houston Rockets

May 29th, 2018 at 1:28pm CST by Luke Adams

The Rockets went all-in on Chris Paul last June, trading nearly half their roster for the star point guard, and the acquisition paid dividends throughout the 2017/18 season — led by Paul and MVP favorite James Harden, Houston won an NBA-best 65 games. However, CP3’s old injury issues resurfaced at the worst possible time, sidelining him for the last two games of the Rockets’ season as the team failed to hang onto a 3-2 lead over Golden State in the Western Conference Finals. And with Paul and Clint Capela up for new deals, Houston’s roster could get awfully expensive this summer.

Here’s where things currently stand for the Rockets financially, as we continue our Offseason Salary Cap Digest series for 2018:

Guaranteed Salary

Player Options

  • None

Team Options

Non-Guaranteed Salary

  • Zhou Qi ($1,378,242)
  • Total: $1,378,242

Restricted Free Agents

Unrestricted Free Agents / Other Cap Holds

Projected Salary Cap: $101,000,000

Projected Cap Room: None

  • We’re assuming that the Rockets will keep cap holds for Paul and Capela on their books in an effort to re-sign both players. In that scenario, the team would remain well over the cap.
  • In the extremely unlikely event that Houston wants to clear space by parting with those two players and the rest of their free agents, the Rockets could get up to about $18.38MM in cap room without trading or cutting any guaranteed contracts.

Footnotes:

  1. Based on CBA rules, Paul’s cap hold should be $36,899,243. However, his cap hold can’t exceed his maximum salary, which currently projects to be $35,350,000.

Note: Rookie scale cap holds are estimates based on salary cap projections and could increase or decrease depending on where the cap lands.

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

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Joe Johnson Intends To Continue Playing Career

May 29th, 2018 at 10:27am CST by Luke Adams

Joe Johnson‘s 17th NBA season came to an end on Monday night, and his current contract will expire in a little over a month. However, Johnson told ESPN’s Tim MacMahon that he has no doubts about wanting to continue his playing career next season.

“Hell yeah, I want to keep rolling,” Johnson said. “I’m not even thinking about [retiring].”

Johnson, who turns 37 next month, has seen his role and production decline in recent years. He established new career lows in several categories this year, averaging 6.8 PPG in 55 games (21.9 MPG) with the Jazz and Rockets. While Johnson is still capable of making the occasional big shot, his .276 3PT% was the worst mark of his career, and his .406 FG% was well below his career rate.

Still, having already earned over $200MM in his NBA career, Johnson likely won’t be seeking more than a minimum salary deal this summer, and his locker-room leadership should earn him a spot on a 15-man roster, so it will be a matter of finding the right fit. The veteran forward tells MacMahon that he’d have interest in re-signing with the Rockets or perhaps joining another team capable of vying for a title.

“I would love to have a chance to win a ring,” Johnson said. “I thought we had a great opportunity, man. It slipped away from us. I want to go to a contender. I don’t want to just be out here playing just to be playing.”

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