Ed. note: Added to the front page because it's informative and nobody wants to talk about an 11-game losing streak right now. -- Packey
The salary cap is an incredibly complex topic. I’m not an expert. All of my numbers should be taken as rough approximations but should be accurate enough to give our discussions of future Piston acquisitions a realistic context. If you notice any omissions and/or errors, please feel free to offer a correction or addition. Also, I’ve linked to the sources I used if you’re interested.
Since the trade last season, we’ve all speculated on what the next moves for Joe Dumars and the Pistons should be. To give this larger conversation some context, I thought it would be helpful to examine three things (not in order of how they appear in the post): One: how much money the Pistons already have committed in player salary for 2010-201. Two: how the salary cap and luxury tax impact Dumars’ options for this season, this summer, and the 2010-2011 season. Three: the strengths and weaknesses of three potential scenarios for future acquisitions.
A Shrinking Salary Cap
Let’s start with the shrinking salary cap. This summer, the NBA notified teams that the salary cap is estimated to drop to somewhere between $50.4 million and $53.6 million. Correspondingly, the luxury tax line will fall somewhere between $61 and $63 million.
Who's on the books?
With that in mind, let’s have a look at what the Pistons will have on the books for the 2010-2011 season given their current contracts:
Richard Hamilton $12,500,000
Tayshaun Prince $11,147,760
Ben Gordon $10,800,000*
Charlie Villanueva $7,020,000
Jason Maxiel $5,000,000
Rodney Stuckey $2,767,126
Austin Daye $1,803,720
Chris Wilcox $3,000,000 (player option)**
DaJuan Summers $762,195 (not fully guaranteed)**
Jonas Jerebko $762,195 (not fully guaranteed)**
In addition to those commitments, the Pistons will need to decide how to handle these three players, whose 2009-2010 contracts are shown:
Kwame Brown $4,000,000
Will Bynum $825,497
Ben Wallace $825,497 (actual) | $1,306,455 (figure that counts toward luxury tax)
We know that Joe Dumars wants to retain Will Bynum, and we know that he’s no longer a secret around the league. It’s going to take more than this year’s salary to retain him, but it’s difficult to estimate exactly how much. For the sake of conversation, let’s say $2,000,000 (it could very well be higher). Also for the sake of conversation, let’s say that Joe lets Kwame walk (although I don’t think that’s a certainty). And finally, let’s say Ben Wallace is retained on a minimum contract, which doesn’t impact how much FA money we can spend but does get included when considering the luxury tax.
That leaves us with two important numbers. First and more importantly, $58,869,451 in salary will count toward the luxury tax. This figure is vital, because Dumars will not want to exceed the luxury tax threshold. Second, $57,562,996 which is the salary that will count toward the salary cap after Big Ben’s minimum contract is deducted. That salary would be committed to the following 12 players:
For the sake of conversation, let’s assume a $52 million salary cap and a $62 million dollar luxury tax threshold for 2010-2011. Obviously, we will be well over the cap at $57,562,996 and dangerously close to the luxury tax at $58,869,451. Being over the cap allows us to use the Mid-Level Exception, which was $5.854 million last summer. We will also have the Bi-Annual Exception at our disposal, which will be $2.08 million in 2010-2011. However, those two exceptions cannot be combined and offered to the same player.
What Are the Options?
With that in mind, let's examine three potential scenarios that Piston fans have suggested. 1) Salary dump: trade some of our big contracts for large expiring contracts and use all that cap space to rebuild. 2) Trade our assets for other assets. 2b) Trade assets for assets and spend the MLE + Bi-Annual this summer. 3) Don’t trade anyone and spend the MLE + Bi-Annual this summer.
Here are the pros and cons, as I see them, to each of these scenarios.
Option 1) Let’s take Tracy McGrady as an example of a big expiring contract, and let’s use Rip and Tay as the pieces to complete that deal, as has been proposed here and elsewhere around the interwebs. McGrady’s salary is $22,483,124 for 2009-2010. Assuming we renounce our rights to him immediately after the season (which we would have to do to avoid an absurd cap hold), we would be left with $35,079,872 in committed salaries; however, we would be left with only 9 players and several cap holds for those open roster spots (cap holds are incredibly confusing, so I’m going to ignore specifics and give a rough estimate). Conservatively, I’ll estimate $5 million for those open slots and our first round pick’s cap holds. That leaves us with approximately $40,079,972 in committed salaries for 2010-2011 to the following players:
And just under $12 million to replace Rip and Tay and find a big man (as well as positions 12-14 on the roster, probably draft picks or minimum contracts). That’s a tall order. Also, I think Houston values the cap space McGrady’s expiring deal will create for them, and I suspect his contract isn't available.
Option 3) If we don’t trade anyone, we will have the MLE and Bi-Annual at our disposal, which total just under $8 million. In this scenario, we don’t lose Rip and Tay, and we have only $4 million less in available money than a trade for McGrady would acquire.
However, there is a significant problem: the luxury tax threshold. Given the numbers we’re assuming for conversation, there is only $3,130,549 to spend before we have to pay the luxury tax (for every $1 a team goes over the tax, the team pays $1 to the league). That’s not a lot of wiggle room, and we simply cannot sign the players we need with $3 million dollars.
Option 1 has significant problems: it leaves us with approximately $11.8 million, which isn’t enough to replace the players we need, at least not immediately. It’s further problematized by the fact that everyone in the NBA values large expiring deals right now – there’s a very good reasons for teams to retain such deals or trade them assets more valuable than Rip + Tay.
Option 2 leaves us with approximately $8 million in available money and retains our talent, but is potentially crippled by the luxury tax payments that would have to be paid if we spend all the money that is available to us.
That leaves us with Option(s) 2(b). In my opinion, this is our only option. We have to find a way to trade our assets for other assets. But it has to be done very creatively so that we can utilize our available exceptions this summer and avoid the luxury tax. We have to trade talent for talent, shed a little salary, and make smart signings this summer.*** It’s worth keeping in mind that trades don’t necessarily have to be made this summer. We have until the middle of the season in 2011 (Jaunary?) before the luxury tax would kick in, so trades could be made up until that point in order to avoid that tax. Even so, Dumars has his work cut out for him, to say the least.
Summing It Up
I don't think salary dumps are the answer (catch the pun?). And while I certainly favor acquiring talent, not cap space, it's going to require some creative and very strategic thinking.
What say you, DBB?
*There is some dispute as to exactly how much Ben Gordon’s contract is worth, either 55 million of 58.2 million over the entirety of the contract. In my opinion, 58.2 is more likely, but regardless of which figure is correct, it has little bearing on available money for the summer of 2010, because the Pistons will likely be over the cap in the summer of 2010. **In my opinion, all of those contracts will carry over from this season to next season. I don’t see Wilcox opting out of that kind of money; Jonas will definitely be back; and, although I’m not particularly high on Summers, he’s young and cheap. ***Unless, of course, our owner is willing to pay the luxury tax, in which case we should retain everyone for now, wait for suitable trade partners, and spend all our available money this summer
*There is some dispute as to exactly how much Ben Gordon’s contract is worth, either 55 million of 58.2 million over the entirety of the contract. In my opinion, 58.2 is more likely, but regardless of which figure is correct, it has little bearing on available money for the summer of 2010, because the Pistons will likely be over the cap in the summer of 2010.
**In my opinion, all of those contracts will carry over from this season to next season. I don’t see Wilcox opting out of that kind of money; Jonas will definitely be back; and, although I’m not particularly high on Summers, he’s young and cheap.
***Unless, of course, our owner is willing to pay the luxury tax, in which case we should retain everyone for now, wait for suitable trade partners, and spend all our available money this summer