- Grizzlies GM Chris Wallace confirmed at the club’s Media Day that Chandler Parsons is healthy and ready to go for camp. Parson, who has been playing five-on-five ball, will be a full participant, tweets Ronald Tillery of The Memphis Commercial Appeal.
The Grizzlies are expected to part ways soon with big man Jarell Martin, according to Ronald Tillery of The Memphis Commerical Appeal, who reports (via Twitter) that Martin has been told he’ll be waived. However, Martin has the option to remain in camp with Memphis as a showcase opportunity for potential suitors, Tillery adds.
Martin, 23, was the 25th overall pick in the 2015 draft, but has failed to develop into a reliable rotation player for the Grizzlies in his first two NBA seasons. In total, the LSU product has appeared in 69 regular season contests, averaging 4.6 PPG and 3.6 RPG with a .419 FG% in 13.6 minutes per game.
Martin has a minimum salary cap hit of $1,471,382 for 2017/18, so the Grizzlies won’t be on the hook for a ton of dead money if and when they waive him. Martin’s contract also includes a $2,416,222 team option for 2018/19, but that money is non-guaranteed, and will disappear unless the 6’10” power forward is claimed on waivers.
Even after trading Troy Daniels to the Suns last week, the Grizzlies were expected to make another move to clear a guaranteed salary from their books. Counting Martin, the club is currently carrying 15 guaranteed contracts, and would add a 16th by re-signing JaMychal Green, the final restricted free agent on the market.
The Grizzlies have traded shooting guard Troy Daniels to the Suns in exchange for a second-round pick, Shams Charania of The Vertical tweets.
John Gambadoro of Arizona Sports 98.7, also privy to the deal, adds that the Suns will also acquire a second-round pick in the deal and that the pick the Grizzlies will acquire is heavily protected.
As details emerged, Charania has summarized the deal as follows: Phoenix receives Daniels and the middle of Memphis’ second-rounders (they hold their own, Charlotte’s and Miami’s). The Grizz, in contrast, who free up nearly $4MM in cap room this season by pulling the trigger here, acquire the top-55 protected second-rounder.
Shipping Daniels to Phoenix drops Memphis down to 19 players (15 guaranteed), freeing up a roster spot and creating a little extra spending flexibility as they pursue a deal with restricted free agent JaMychal Green.
Having spent time with four franchises over the course of his four-year career, Daniels’ impact on the court is negligible. He hasn’t, however, been given a significant chance to showcase his abilities.
Daniels’ best season in the NBA thus far was his first. As a rookie with the Rockets, he posted 8.4 points in 17.7 minutes per game.
SEPTEMBER 21, 12:08pm: The Grizzlies have officially signed Rabb, the team announced today in a press release.
SEPTEMBER 18, 7:58pm: The Grizzlies and Rabb have agreed to a three-year deal, with the first two seasons fully guaranteed, reports Geoff Calkins of The Memphis Commercial Appeal.
5:56pm: The Grizzlies are close to reaching an agreement with rookie forward Ivan Rabb on a three-year contract, reports Marc J. Spears of The Undefeated. Rabb, the 35th overall pick in this year’s draft, had been one of the last 2017 draftees who remained unsigned.
Many draft experts and NBA observers expected Rabb to declare for the draft a year ago, but he made the surprise decision to stay at Cal for his sophomore season. In his second year with the Golden Bears, Rabb averaged a double-double with 14.0 PPG and 10.5 RPG, though his FG% dipped from .615 in his freshman year to .484 in 2016/17.
Viewed as a probable first-rounder if he had entered the 2016 draft, Rabb slipped to the second round this spring. The Grizzlies sent a 2019 second-round pick to Orlando in order to acquire the No. 35 overall pick, which they used to select Rabb.
While exact terms of the agreement aren’t yet known, the Grizzlies figure to use their mid-level exception to sign Rabb — that exception allows the club to offer slightly more than the minimum and to go beyond a two-year contract. Memphis already used most of its MLE to lock up Ben McLemore, Rade Zagorac, and Dillon Brooks, but still has about $1.44MM left, which is more than enough for Rabb’s starting salary.
Assuming Rabb’s 2017/18 salary is fully guaranteed on his new deal with Memphis, the team will have 16 players on guaranteed contracts. That number would increase to 17 if the Grizzlies work out a new deal with JaMychal Green, who remains a restricted free agent. Teams are only allowed to carry 15 players on their regular season rosters, so the Grizzlies will potentially have to make a trade or two before opening night in order to avoid eating some guaranteed money.
At this point in the NBA offseason, most free agents who remain on the open market will have to settle for minimum salary contracts, if they receive an NBA offer at all.
There are some exceptions, particularly on the restricted free agent market, where Mason Plumlee just signed a three-year, $41MM deal with the Nuggets. Within the last week or two though, we’ve seen top remaining unrestricted free agents like Shabazz Muhammad, Tony Allen, and Andrew Bogut settle for minimum salary contracts.
That’s good news for several teams who have used all their available cap room and/or exceptions and can only offer minimum salary contracts for the rest of the 2017/18 league year. They won’t necessarily be at a disadvantage when it comes to signing free agents if those players aren’t being offered more than the minimum by teams with the means to do so.
In some cases though, an inability to offer more than the minimum can handicap a team. Dante Cunningham‘s free agent decision this week reflects this — according to multiple reports, the deal Cunningham agreed to with the Pelicans is actually worth $2.3MM, which is more than his minimum salary of $2.1MM. While we haven’t seen the official terms of Cunningham’s new contract yet, it’s possible that the $200K difference was one reason Cunningham chose New Orleans over a suitor like the Timberwolves, who could only offer the minimum.
Teams with the flexibility to offer more than the minimum could also benefit later in the NBA season. For instance, if Dwyane Wade negotiates a buyout with the Bulls and considers which team to join as a free agent, the fact that the Heat have retained their $4.328MM room exception could be a factor — it would allow Miami to make a stronger offer than the Cavs could.
With that in mind, here’s a breakdown of the teams that currently don’t have the ability to offer more than the minimum salary, which is $815,615 for a first-year player:
- Boston Celtics
- Detroit Pistons
- Golden State Warriors
- Houston Rockets: $350 of mid-level exception available
- Los Angeles Clippers: $774,770 of mid-level exception available
- Memphis Grizzlies: $1,440,385 of mid-level exception available, but will use at least $815,615 to sign Ivan Rabb.
- Minnesota Timberwolves
- New York Knicks
- Oklahoma City Thunder
Meanwhile, the following teams have less than $3.29MM (the value of the bi-annual exception) to offer to free agents:
- Cleveland Cavaliers: $2,549,143 of taxpayer mid-level exception available
- Utah Jazz: $1,128,000 of room exception available
- Washington Wizards: $1,902,000 of taxpayer mid-level exception available
Of course, just because a team has an exception available, that doesn’t mean the club will be eager to use it. Teams like the Bucks or Pelicans, for instance, still have various MLE and BAE exception money available, but their proximity to the luxury tax threshold will make them reluctant to offer more than the minimum salary to anyone the rest of the way.
For a full breakdown of how teams have used their mid-level, room, and bi-annual exceptions for the 2017/18 league year, be sure to check out our MLE tracker and BAE tracker.
ESPN’s Zach Lowe and Brian Windhorst have published an expansive and well-researched report on NBA teams’ finances, providing details on the league’s revenue sharing system, the impact from national and local television deals, and how a lack of net income for NBA franchises could push the league toward considering relocation or expansion.
The report is wide-ranging and detailed, so we’re going to tackle it by dividing it up into several sections, but it’s certainly worth reading in full to get a better picture of whether things stand in the NBA. Let’s dive in…
Which teams are losing money?
- Nine teams reportedly lost money last season, even after revenue sharing. Those clubs were the Hawks, Nets, Pistons, Grizzlies, Magic, Wizards, Bucks, Cavaliers, and Spurs. The latter two teams – Cleveland and San Antonio – initially came out ahead, but paid into the league’s revenue sharing program, pushing them into the red.
- Meanwhile, the Hornets, Kings, Pacers, Pelicans, Suns, Timberwolves, and Trail Blazers also would have lost money based on net income if not for revenue sharing, according to Lowe and Windhorst.
- As a league, the NBA is still doing very well — the overall net income for the 30 teams combined was $530MM, per ESPN. That number also only takes into account basketball income, and doesn’t include income generated via non-basketball events for teams that own their arenas.
- The players’ union and its economists have long been skeptical of NBA teams’ bookkeeping, alleging that clubs are using techniques to make themselves appear less profitable than they actually are, Windhorst and Lowe note. The union has the power to conduct its own audit of several teams per season, and it has begun to take advantage of that power — according to ESPN, the union audited five teams last season, and the new CBA will allow up to 10 teams to be audited going forward.
How does the gap between large and small market teams impact income?
- Even after paying $49MM in revenue sharing, the Lakers finished the 2016/17 with a $115MM profit in terms of net income, per ESPN. That was the highest profit in the NBA, ahead of the second-place Warriors, and could be attributed in large part to the $149MM the Lakers received from their huge local media rights deals.
- On the other end of the spectrum, the Grizzlies earned a league-low $9.4MM in local media rights, which significantly affected their bottom line — even after receiving $32MM in revenue sharing, Memphis lost money for the season. The Grizzlies will start a new TV deal this year that should help boost their revenue, but it still won’t come anywhere close to matching deals like the Lakers‘.
- The biggest local TV deals help drive up the NBA’s salary cap, with teams like the Lakers and Knicks earning in excess of $100MM from their media agreements. According to the ESPN report, the Knicks made $10MM more on their TV deal than the six lowest-earning teams combined.
- As one owner explained to ESPN, “National revenues drive up the cap, but local revenues are needed to keep up with player salaries. If a team can’t generate enough local revenues, they lose money.”
- Playoff revenue from a big-market team like the Warriors also helps push up the salary cap. Sources tell Lowe and Windhorst that Golden State made about $44.3MM in net income from just nine home playoff games last season, more than doubling the playoff revenue of the next-best team (the Cavaliers at about $20MM).
How is revenue sharing affecting teams’ earnings?
- Ten teams paid into the NBA’s revenue sharing system in 2016/17, with 15 teams receiving that money. The Sixers, Raptors, Nets, Heat, and Mavericks neither paid nor received any revenue sharing money. Four teams – the Warriors, Lakers, Bulls, and Knicks – accounted for $144MM of the total $201MM paid in revenue sharing.
- While there’s general agreement throughout the NBA that revenue sharing is working as intended, some teams have “bristled about the current scale of monetary redistribution,” according to ESPN. “The need for revenue sharing was supposed to be for special circumstances, not permanent subsidies,” one large-market team owner said.
- The Grizzlies, Hornets, Pacers, Bucks, and Jazz have each received at least $15MM apiece in each of the last four years via revenue sharing.
- However, not all small-market teams receive revenue-sharing money — if a team outperforms its expectations based on market size, it forfeits its right to that money. For instance, the Thunder and Spurs have each paid into revenue sharing for the last six years.
Why might league-wide income issues lead to relocation or expansion?
- At least one team owner has raised the idea of expansion, since an expansion fee for a new franchise could exceed $1 billion and it wouldn’t be subject to splitting 50/50 with players. A $1 billion expansion fee split 30 ways would work out to $33MM+ per team.
- Meanwhile, larger-market teams who aren’t thrilled about their revenue-sharing fees have suggested that small-market clubs losing money every year should consider relocating to bigger markets, sources tell ESPN.
- As Lowe and Windhorst observe, the Pistons – who lost more money than any other team last season – are undergoing a relocation of sorts, moving from the suburbs to downtown Detroit, in the hopes that the move will help boost revenue.
What are the next steps? Are changes coming?
- The gap between the most and least profitable NBA teams is expected to be addressed at the NBA’s Board of Governors meeting next week, per Lowe and Windhorst. Team owners have scheduled a half-day review of the league’s revenue sharing system.
- Obviously, large- and small-market teams view the issue differently. While some large-market teams have complained about the revenue sharing system, they’re outnumbered, with smaller-market teams pushing those more successful clubs to share more of their profits, according to ESPN.
- Trail Blazers owner Paul Allen is one of the loudest voices pushing for more “robust” revenue sharing, sources tell ESPN. Some team owners have argued that the system should ensure all teams make a profit, while one even suggested every team should be guaranteed a $20MM profit. There will be “pushback” on those ideas, Lowe and Windhorst note. “This is a club where everyone knows the rules when they buy in,” one owner said.
- On the other end of the spectrum, some teams have floated the idea of limiting the amount of revenue sharing money a team can receive if it has been taking payments for several consecutive years.
- Any change to the revenue sharing system that is formally proposed at the NBA’s Board of Governors meeting would require a simple majority (16 votes to 14) to pass.
SEPTEMBER 15: The Pelicans have officially signed Allen, announcing their deal today in a press release.
SEPTEMBER 11: The Pelicans are finalizing a one-year contract with veteran swingman Tony Allen, Shams Charania of The Vertical tweets.
Barring a late breakdown in negotiations, this ends a prolonged free agent odyssey for the 35-year-old defensive stalwart. Early in the process, the Clippers were reportedly interested in working out a sign-and-trade deal for Allen until their roster got overloaded with newcomers. The Timberwolves were also interested, as Tim MacMahon of ESPN.com reported.
It was apparent that the Grizzlies were moving on from Allen when one of the free agents they signed, shooting guard Ben McLemore, broke his foot and they still didn’t show any serious interest in Allen.
New Orleans needed another small forward after Solomon Hill suffered a torn hamstring, an injury that is expected to sideline him for most of the upcoming season.
Allen has only played for two teams in his NBA career. He spent his first six seasons with the Celtics before joining Memphis for the 2010/11 season. He was a rotation player for the Grizzlies over the past seven seasons and started 66 games for them last year. Overall, he appeared in 71 games and averaged 9.1 PPG, 5.5 RPG and 1.6 SPG in 27.0 MPG. He’s a career 28% shooter from long range, which has made him an increasing offensive liability in a league that has become heavily reliant on 3-point shooting.
Allen should still see quite a bit of action at both small forward and shooting guard, where Jrue Holiday is expected to start with the addition of point guard Rajon Rondo. With the offensive firepower provided by Holiday, Anthony Davis and DeMarcus Cousins, the Pelicans can afford to have a defensive specialist at the wing spot.
As for the terms of Allen’s one-year deal, those haven’t yet been reported, but the Pelicans still have their bi-annual exception ($3.29MM) available and have a bit more breathing room below the luxury tax line after trading Quincy Pondexter earlier this month.
SEPTEMBER 12: As Ridiculous Upside (Twitter link) reported on Monday night, Hunter’s contract with the Grizzlies is officially in the books as a two-way deal, according to RealGM’s log of NBA transactions. Memphis has now filled both its two-way openings, with Kobi Simmons occupying the other spot.
SEPTEMBER 11: The Grizzlies have signed forward Vince Hunter, the team announced in a press release. It’s apparently a two-way contract, Chris Herrington of the Memphis Commercial Appeal tweets.
The 6’8” Hunter played in Russia last season, appearing in 26 games for Avtodor Saratov in the VTB United League and averaging 14.7 PPG, 7.1 RPG, 1.35 SPG and 1.31 BPG in 26.0 MPG.
Memphis is quite familiar with Hunter, a Texas-El Paso product who went undrafted in 2015. He was on its training camp roster last season, appearing in four games and averaging 8.8 PPG, 4.0 RPG and 1.0 BPG in 19.4 MPG. He also played for the Grizzlies’ summer-league team in Las Vegas the last two seasons. He saw action in six summer-league games this season, averaging 8.5 PPG, 5.7 RPG and 1.5 SPG in 17.7 MPG.
Hunter has also played professionally in Greece, Romania and the G League.
The Raptors wanted to bring 40-year-old free agent Vince Carter back to Toronto this summer, tweets Ryan Wolstat of The Toronto Sun.
Many observers were surprised when Carter elected to sign with the Kings instead of trying to finish his career with a contender. Money was certainly a factor, as Sacramento offered $8MM for one season, along with the chance to play for former Grizzlies coach Dave Joerger again. The Kings signed Carter, Zach Randolph and George Hill as veteran presences on an otherwise youthful team.
Despite his age, Carter has remained a productive player. He appeared in 73 games for Memphis last season, starting 15, and averaged 8.0 points, 3.1 rebounds and 1.8 assists per night. He could have provided wing depth to a Toronto team that traded DeMarre Carroll to the Nets in July and sent Terrence Ross to the Magic at the February deadline to pick up Serge Ibaka.
Carter has a checkered history in Toronto, winning Rookie of the Year honors in 1999 and spending more than six seasons there before demanding a trade. However, that was almost 13 years ago and it didn’t prevent the management team currently running the Raptors from reaching out to him.
- The Grizzlies will be a team in transition, Shaun Powell of NBA.com writes. With Zach Randolph and Vince Carter now members of the Kings, the Grind House era could be coming to a close. Powell wonders if Memphis would look to shop Marc Gasol at the deadline if the team gets off to a rough start.