How $5 million salary cap increase affects the Pistons

Editor's note: Bad math alert. Post has been updated throughout with revisions to payroll and possible salary cap space. Detroit Bad Boys apologizes for the earlier errors.

The NBA is expected to see an increase in the salary cap of about $5 million, which should have a significant impact on every team in the league including the Detroit Pistons.

The Pistons are a team in flux after another disappointing season in which the team signed high-profile free agents Josh Smith and Brandon Jennings to big-money deals, young big man Greg Monroe enters restricted free agency and the team has money to spend to fix holes all over the roster.

The numbers are preliminary but an announcement like this is not unexpected. Detroit Bad Boys previously wrote about increased revenues, including an upcoming new TV deal could see the salary cap explode after years of relative stagnation.

Even without the new TV deal in place it appears that the league is seeing an explosion in revenue similar to the other major professional sports.

According to NBA salary cap guru Larry Coon, the current salary cap of $58.6 million is expected to rise to $63.2 million. The luxury tax threshold is expected to increase from $71.7 million to $77 million.

Pistons Cap Space

Now lets explore some complicated cap-related math as it pertains to the Pistons. First, The Pistons have $35,177,875 $33,413,230 dedicated to the cap without factoring in any cap holds or team options. We can, however, make some assumptions:

1. Jonas Jerebko exercises his $4.5 million player option
2. Chauncey Billups retires from the NBA
3. Josh Harrellson and Peyton Siva get their options picked up by the team

That puts the team at $34,197,941 $39,677,875 without Billups (if you'd like to include him add $2.5 million). So does that mean the Pistons will have $29 million $23,522,125 in cap space this summer? Even accounting for the Greg Monroe-sized hole still in the cap the answer is a resounding NO. Here is why.

We'll handle Monroe's restricted free agency last. First, the Pistons are slotted to pick in this year's NBA draft lottery. Assuming the Pistons select at No. 8 that is an additional $2,288,200 against the salary cap. Also, peg the minimum rookie salary of $507,336 for the team's second-round pick.

That puts the Pistons new cap number at $31,402,405 $42,473,411. And we're not done yet as we have to add an additional $507,336 roster hold on the last remaining spot on the roster. So the final number, before Monroe, is now $30,895069 $42,980747. Now things get expensive.

Greg Monroe can take the qualifying offer of $5,479,934 and opt for restricted free agency next year. Or, he could work out a long-term extension with the Pistons or convince another team to sign him to an offer sheet and the Pistons could have a chance to match.

To retain Monroe's rights while this drama plays out, the Pistons will have a cap hold of $10,216,135 -- this represents 250 percent of Monroe's 2013-14 salary. This puts the Pistons cap space at $20,678,934. This puts the Pistons payroll at $53,196,882 and potential cap space at about $9 million. One thing I believe but am not 100 percent sure on -- I believe the Pistons could spend up to the cap based on Monroe's salary cap hold and then exceed that hold value in whatever extension he signs.

Monroe's Extension

If the Pistons are able to peg free agent spending up to Monroe's cap hold they should have $20 million $9 million to spend. But even if that is the case the money owed to him will have a significant impact on its balance sheet going forward.

The basement for Monroe compensation will be set at about $12 million with the maximum allowable 7.5 percent annual raise. The Pistons simply won't get him cheaper than that. Monroe's agent David Falk has said that he is looking for a maximum deal for Monroe and with the new salary cap in place that maximum just got more expensive.

The maximum deal a player can sign is 25 percent of the salary cap and the salary cap is based on Basketball Related Income (BRI). Though for reasons I don't understand, the salary cap is based on 44.74 percent of BRI while maximum salaries are based on 42.14 percent of BRI, according to Coon. Under the old cap that would have meant that Monroe could have signed for around $14.4 million. Under the new cap, though, Monroe could sign for about $15.5 million.

If Monroe negotiated a four-year deal with the maximum allowable raises that would mean he would sign a four-year deal worth between $53 million and $70 million. Is Monroe worth $70 million. I'd say no, but he's also unlikely to get the maximum raises allowable under the CBA. A flat salary of $15.5 million means the Pistons would be on the hook for $62 million. That might seem like a lot of money to provide a 16-and-10 player that isn't coming off of his best season, but it is important to remember that if the salary cap continues to grow then what looked like lavish overspending now looks like a bargain in the future.

Case in point -- Greg Monroe. If the Pistons gave into his agent's demands last offseason and signed him to a max extension then he would have signed a maximum deal of $13.7 million with escalators putting a four-year deal at $61.28 million. In just one offseason he became possibly $9 million more expensive.

Tomorrow (or in the near future), we will look at teams with cap room and how this expanded cap could help facilitate a trade of Josh Smith and/or Brandon Jennings.