NBA Drops 2017-18 Salary Cap Projection $1M, to $101M, Due to $30M Drop in Revenue Projection

April 9th, 2017 No comments
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The NBA salary cap has experienced staggering growth in recent seasons.

The cap jumped from $58.7 million in 2013-14, to $63.1 million in 2014-15, to $70.0 million in 2015-16. That’s a near 20% growth in just two years.

But it’s nothing compared to what happened this season.

On the strength of new national TV rights deals with ESPN/ABC and TNT, which will add a whopping $1.1 billion of incremental revenues in 2016-17, the cap soared higher than helium-sucking angels: to $94.1 million.

While the new national TV rights deals are the headline, they certainly aren’t the only source of growth. Not by a long shot.

For 2016-17, the league expected a $320 million, or 7.5%, increase in revenue from sources other than the national TV deals at the start of the season. The sources are both varied and highly lucrative.  Read more…

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Miami Heat Interested In Serge Ibaka?

February 13th, 2017 5 comments
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“We’re dealing with that word that you hate to use — that we have to rebuild. But we will rebuild. Quick. I’m not going to hang around here for three or four years selling this kind of song to people in Miami. We have great, great fans. They’re frustrated. They’ve been used to something great over the last 10 years, and so right now we’re taking a hit. I think we can turn this thing around… You can use that word rebuild. But we’re going to do it fast.”

That was Heat president Pat Riley two months ago, conceding to WQAM’s Joe Rose that after nearly a decade of success, his organization would finally need to initiate a true rebuild. His team was in the midst of an excruciatingly painful season that started with the shocking (if not altogether unpredictable) departure of Dwyane Wade, followed by the gut-wrenching loss and stunning war-of-words with Chris Bosh, followed by a depressing 11-30 record that culminated with a demoralizing wire-to-wire loss at the hands of the Milwaukee Bucks exactly one month ago today.

What followed could well be the most extraordinary 13-game winning streak in league history.

The streak helped to stave off what many believe would have been a Heat firesale at the Feb. 23rd trade deadline.

While Riley’s willingness to sell of pieces such as Goran Dragic and Hassan Whiteside was likely always overblown, the consensus now seems to be that the streak has flipped Miami from sellers looking to trade pieces for future assets to buyers looking to solidify a potential playoff push.

The truth probably lies somewhere in between. The streak revealed some possible building blocks for the future, but it wasn’t necessarily real. Or sustainable. The Heat still need to reload. And, as Riley said, they need to do it quickly.

The reasons why are readily transparent.

The Heat figure to have a ton of financial flexibility this summer.

Based upon the league’s current $102 million cap projection for next season, Miami currently projects to have as much as $13 million in available cap space (assuming Josh Richardson’s non-guaranteed minimum salary is retained). With Bosh relief, the total will grow to $38 million. It could grow further, to $40 million if Dion Waiters were to decline his player option ($3.0 million), to $41 million if Willie Reed were to do the same ($1.6 million), to $44 million if the Heat were to waive and stretch the salary of Josh McRoberts ($6.0 million).

From that, the cap room required by the Heat’s first-round draft pick (assuming Miami keeps it) would need to be subtracted. It the Heat continues to hover around the playoffs, the pick would cost another $1.5 million or so in cap space, leaving Miami with anywhere from $37 million to $43 million with which to attack free agency next summer.  Read more…

NBA To Create New “Fitness-to-Play” Panel Which Could Have Implications for Chris Bosh

February 9th, 2017 No comments
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Please note that this post contains details about a provision in the new CBA that will take effect next season. The applicability of these rules to the Chris Bosh situation has not yet been definitively established. While nothing in my review of the specific sections of the new CBA that pertain to the matters described in this post would suggest they would not apply, the new CBA does contain a blanket provision that states that a player’s salary with respect to any salary cap year covered by a contract entered into prior to July 1, 2017 will be calculated in accordance with the rules then in effect. That provision could be interpreted to exclude Bosh (and any player whose contract was signed under the current CBA) from the provisions of the new rules described in this post. I can say with absolute certainty that the rules described herein would apply to any player whose situation does not span two CBAs :). 

Please also note that I humbly believe there to be a minor issue with the drafting of the new CBA that pertains to the topics discussed herein. I believe Article XXII, Section 11(g) should reference Article II, Section 3(n), rather than Article II, Section 3(l). I make this suggestion because the language, as written, makes no intuitive sense (at least to me); my suggestion fixes the issue. The following post utilizes the provision as I believe the NBA intended it to be drafted.   

Finally, please note that for more details covering all aspects of the Chris Bosh situation — including his contract, insurance, the rules for cap relief, the potential subsequent rescission of such cap relief, and the mechanisms the Heat can employ to protect itself against such an event, among various other aspects — I might recommend you see this post.


It was a year ago today, Feb. 9, 2016, that Chris Bosh played his last NBA game.

The one-year anniversary that nobody wanted is here. With it, the Miami Heat is now eligible to apply to have his substantial salaries — $23.7 million for this season, $25.3 million for 2017-18 and $26.8 million for 2018-19 – removed from its cap sheet.

The entirety of that $75.9 million would still be owed, of which as much as $41.0 million would be reimbursed through insurance, but Bosh would no longer take up a massive amount of the Heat’s cap space if the application were to be granted.

The process, designated for long-term injury situations, which we’ll call the “long-term injury cap clearance process,” would go like this:

Following the now-completed waiting period(1), the Heat would apply to the NBA to have Bosh’s salary removed from its cap sheet on the basis that it believes he is dealing with a career-ending medical situation. The league and the players association would then jointly select a physician to review the situation. Salary cap relief would be granted if the physician determines that Bosh’s condition is career-ending, or severe enough that it would subject him to a medically unacceptable risk of suffering a life-threatening or permanently disabling injury or illness. The Heat would receive the associated cap relief upon waiving him.

It seems likely that the Heat would be granted such relief  (though see here for reasons why such a determination might prove challenging). Read more…

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NBA Reduces Salary Cap Projections Despite Rising Revenues

February 5th, 2017 No comments
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The NBA salary cap has experienced staggering growth in recent seasons.

The cap jumped from $58.7 million in 2013-14, to $63.1 million in 2014-15, to $70.0 million in 2015-16. That’s a near 20 percent growth in just two years.

But it’s nothing compared to what happened this season.

On the strength of new national TV rights deals with ESPN/ABC and TNT, the cap soared higher than helium-sucking angels: to $94.1 million.

The outsized growth was projected to continue.

At the start of the regular season in October, the league was projecting a salary cap of $103 million for 2017-18, and a salary cap of $107 million for 2018-19.

But the growth, at least for now, is finally starting to taper off. At the Board of Governors meetings in New York on Dec. 15, teams were advised that cap projections were declining:

  • For 2017-18, the salary cap is now projected at $102 million, with a luxury tax threshold of $122 million.
  • For 2018-19, the salary cap is now projected at $103 million, with a luxury tax threshold of $125 million.

The drop in the latter season is particularly rattling — not only because it represents a $4 million drop, but also because it represents just a $1 million increase over the previous season projection.

Are league-wide revenues finally beginning to slow?  Read more…

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Breaking Down the Complex Carmelo Anthony Trade Talks

January 30th, 2017 No comments
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Update (04/16/17)

“We have not been able to win with him on the court at this time. I think the direction with our team is that he’s a player who would be better off somewhere else, using his talent somewhere where he can win or chase that championship.”

That was Phil Jackson speaking about forward Carmelo Anthony, just one day after it was revealed that both Jackson and the New York Knicks had exercised the mutual option for the two years remaining on Jackson’s contract as team president.

The audacity with which Jackson continues to speak in public about his star player is, for many, shocking. But what he is doing, wise or not, is clearly strategic in nature. He wants to move on from Anthony. But he is also aware that Anthony holds the balance of power in that regard.

Anthony has a sizable contract – it will pay him $26.2 million next season, and $27.9 million in 2018-19. He has a 15% trade kicker. And, most importantly, he has a no-trade clause. If he wants to remain a Knick, he will. And there’s little Jackson can do to stop it. Other than make his stay in New York so unpleasant as to cause him to want to leave.

Anthony, 32, is a seasoned NBA veteran. He is well aware of what Jackson has been saying, and why. He is not about to allow it to influence him to make a hasty decision.

But Anthony has reportedly conceded that he would consider waiving his no-trade clause under the right circumstances. Which, in turn, could leave Jackson with an unknown list of potential trade partners, an unknown list of demands from those suitors, and with some technical difficulties that would still need to be overcome if there is to be an interest.  Read more…

Gordon Hayward Could Become Most Interesting Man in NBA This Summer

December 30th, 2016 No comments
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Update (3/2/17): The Utah Jazz lost a potentially significant opportunity to ease its future cap sheets when it couldn’t come to agreement with George Hill on a renegotiation and extension by the Mar. 1, 2017 deadline, one that could’ve paid out up to $88.7 million in new money in exchange for a commitment through the 2019-20 season. The Jazz would’ve been able to frontload $13.6 million of that payout to this season – reducing future season payouts to no more than $23.3 million in 2017-18, $25.0 million in 2018-19 and $26.8 million in 2019-20, an effective per season cap hit reduction of about $4.5 million – and reduce the commitment to just three new seasons.

Instead, Hill will reportedly be gunning for a maximum contract in free agency. The Jazz will be able to offer him a contract of up to five years in length, but they surly won’t be willing to give the soon-to-be 31-year-old any more than the four seasons other teams can offer. The most Hill can get with any other team: 4 years, $131.6 million. It remains decidedly unclear as to whether the Jazz, or any other team, will give it to him. Is Hill truly that valuable (or even anywhere close to it)? If you feel he is, it could subtract at least an extra $4.5 million (for a contract that has an equivalent $88.7 million payout over the next three seasons), and maybe as much as $7 million (for a max contract), from Utah’s cap sheet in future seasons. 

A key number for the Jazz in its negotiations with Hill next summer: 4 years, $103.8 million. That’s the point at which the contract would produce an equivalent payout over the first three years as that which Hill apparently rejected. Anything below that and the Jazz will have been better served over the next three seasons by not signing Hill to a renegotiation and extension, albeit in return for a very costly fourth-year guarantee. Anything above that and the Jazz lose out. 

It’s difficult to imagine Hill will break $103.8 million over four years on the free agent market. But, by rejecting a renegotiation and extension of up to $88.7 million over three years, he clearly thinks he can. 

How much it takes to re-sign Hill will have implications for how the Jazz proceed in constructing the rest of their roster, including what they might offer Gordon Hayward if he qualifies for a designated player veteran extension this summer in the unlikely event he earns All-NBA honors and exercises his player option (if he doesn’t, what the Jazz will offer is clear – the full max), whether they will look to trade Derrick Favors, whether they will retain Boris Diaw, how they will approach negotiations with Rodney Hood, etc.

While I have chosen to focus solely on Hayward in this post, how the Jazz choose to manage their entire roster this summer will be equally fascinating.

It’s tough to get a great read on where exactly the Utah Jazz stand.

They’ve got an undeniably talented and youthful core which has the potential for excellence. They’re one of four teams which rank top 10 in the NBA in both offensive efficiency and defensive efficiency. And they have a top 10 NBA record.

On the other hand, they sit in the bottom half of the Western Conference playoff standings and aren’t really in the same class as the top three. They haven’t won a single post-season game since 2010. And they’ve been waging a losing battle against injury for years, which makes it nearly impossible to tell just how good they can be.

The lack of clarity is becoming a serious problem for the small-market organization, as it navigates whether it’s even possible to pay its five when-healthy starters — George Hill, Rodney Hood, Gordon Hayward, Derrick Favors and Rudy Gobert – within the confines of a luxury tax threshold which they have been historically adverse to cross.

Gobert already got his big-money extension this past October – a four-year, $94 million payout that kicks in next season. His fate is secure.

Hill and Favors are each currently eligible for extensions of their own, ones that could leverage Utah’s $13.6 million of available cap space to renegotiate their current salaries as the baseline for it.

Favors is five years younger than Hill and still very much in his prime, but he’s also under a low-value contract through next season and could be the odd man out if there is to be one. Among the team’s when-healthy starters, his long-term tenure in Utah would appear the least secure. So he’s not likely to get an extension.

Hill is a guy the Jazz would love to renegotiate and extend, and they can make a offer to do so — one that pays out up to $88.7 million in new money in exchange for a commitment through the 2019-20 season, which, for the Jazz, would: (i) deflect $13.6 million of the associated future cap hits by paying it out this season (effectively a cap savings of $4.5 million per future season), (ii) render $4.2 million of that $13.6 million as essentially free (since the Jazz are below the salary floor, they’d need to pay that $4.2 million out anyway), and (iii) reduce the maximum term of the deal for the soon-to-be 31-year-old to three new seasons (vs. up to five in free agency). But he seems to prefer to hash things out in free agency.

Hood will be eligible for an extension of his own starting this coming July, which would kick in when his rookie-scale contract expires at the end of next season. He’s a solid two-way talent. He won’t be cheap.

And then there’s Hayward, the heart and soul of the franchise, who will become a prized free agent this summer if he declines his $16.7 million player option by his June 29 deadline.

The last time Hayward hit the open market, as a restricted free agent in the summer of 2014, talks with the Jazz broke down to point where he was forced to pursue other options. Utah could have kept him off the market had they negotiated a contract extension the prior October, but Hayward was reportedly seeking a four-year deal valued at $50 million while the Jazz reportedly held firm at $48 million. The hard line ultimately proved costly.

Rather than even attempt to negotiate a new deal that could have extended as long as five years the following July, the Jazz made known its intention to match any offer sheet Hayward signed. He went on to sign a four-year, $63 million max offer sheet with the Charlotte Hornets on July 10, 2014. To make the deal particularly unpleasant for Utah, the Hornets threw in a 15 percent trade kicker and a player option on the final season. They matched anyway.

Nearly three years later, that contract sets Hayward up for one of the league’s most intriguing summer scenarios. Read more…

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The Death of The Free Agency Rebuilding Plan?

December 21st, 2016 2 comments
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The NBA and the National Basketball Players Association announced last week that they have reached agreement on a new Collective Bargaining Agreement. If the deal is ratified by both sides, which is a formality, the league will be assured of labor peace for at least the next six years.

At the highest of levels, not much would change in the new deal.

The split of league-wide revenues will remain the same – the players will be virtually assured to receive a 51 percent share (as they are in the current agreement). The salary cap will be calculated the exact same way. The luxury tax will be calculated the exact same way, and teams will be penalized just as severely for crossing it.

Rather than pushing for sweeping changes, the NBA was clearly focused on one thing — stopping superstar players from leaving their teams in free agency. Since 2010, several top-tier players have left as free agents, including LeBron James and Chris Bosh (2010), Dwight Howard (2013), and Kevin Durant (2016). Carmelo Anthony (2011), Chris Paul (2011) and Kevin Love (2014) also forced trades under the threat of leaving their teams with nothing in free agency.

To stop the flow, the league created new rules that provide huge financial incentives for a select group of top-tier players to stay with their existing teams – rules with which the players (the union for whom was led by the players who would benefit the most) were more than happy to oblige.   Read more…

How New CBA Changes Will Impact the Miami Heat

December 16th, 2016 4 comments
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When the NBA’s new collective bargaining agreement becomes official, benefits should abound for both players and teams. Minimum salaries, rookie-scale contracts, the mid-level exception, the bi-annual exceptions, and maximum salaries are all increasing, which should placate most players. Various rules will be implemented to entice players to remain with their existing teams, which should placate most teams.

(For full details on all the changes in the new CBA, clink this link.)

But all those changes do come at a consequence – it will be more difficult for teams to rebuild through free agency, teams like the Miami Heat.

The Heat is, as president Pat Riley declared, a rebuilding team.

But Miami has compiled a solid core of multi-talented youngsters — in guards Tyler Johnson and Josh Richardson, forward Justise Winslow, and center Hassan Whiteside — from which to work. And it has a strong lead guard in Goran Dragic to spearhead the charge.

In his first season, Winslow showed promise as a defender. But his offense at times proved to be so limited that defenders constantly sagged away from him, often effectively relegating the Heat to playing four-on-five basketball. If he improves his shooting, he could quickly become one of the Heat’s most vital players. If he doesn’t, his future as a starter (or even on this team) could quickly be jeopardized.

Imagine, for a moment, a Dragic – Johnson – Richardson – Whiteside four-man unit.

In an offense system designed to capitalize upon it, what was once a shocking inability to space the floor – predicated largely on the always imperfect backcourt tandem of Dragic and Wade — could now be considered a strength. And depending upon where Richardson – who led the entire NBA in three-point shooting percentage after the All-Star Break, at 53 percent – and Johnson – who shot 41 percent on three-pointers last season (excluding heaves), despite often being miscast on offense as a point guard, which has continued on this season at full detriment to his development — level off with their shooting, a potentially big one at that.

That type of shooting could provide Whiteside — now a franchise cornerstone with his four-year, $96.4 million contract secured – the much-coveted floor-spacing into which to maneuver.

At 7-feet, 265-pounds, and with a ridiculous 7-foot-7-inch wingspan, Whiteside alters the geometry of the game. He’s not at all a back-to-the-basket big — and the Heat is doing the offense a huge disservice by treating him as such — but he can a huge initiator of offense, whether or not he ever even touches the ball. He hasn’t yet mastered the art of either the pick or the roll, but he has the tools to become of the best roll men in the NBA. And, even if not, his mere presence in the paint sucks in defenses with more force than a Dyson. That yields tons of garbage points and offensive rebounds for him, and open shots for others.

This Heat team may not be showing it on the court thus far this season, but it has the potential to be fast in transition and to capitalize upon a type of floor spacing in the half court it hasn’t had in quite some time.

Imagine what Dragic, a relentless attacker of the rim, and Whiteside, a dominant interior presence, could do in an offense that spaced the floor around them. Is it so preposterous to envision a constant stream of Whiteside pick-and-rolls, and swished corner three-pointers when defenders rotate away from Heat shooters to try to stop it?

Is it so preposterous to imagine that with Whiteside down low; Richardson and Johnson to space the floor around him; and Dragic’s speed and ability to break down a defense; that the team could develop into be a force with which to be reckoned, if they’re able to add a star player or two — perhaps a power forward to replace the unfortunately departed Chris Bosh, a small forward that would allow the Heat to stagger Johnson and Richardson, or both?

The organization has maneuvered around various salary cap issues in order to maximize its free agency options to achieve that goal. The summer of 2017 will be a particular emphasis, with the Heat able to begin the process of removing the salary of Bosh from its cap sheet on or after Feb. 9, 2017 and the salary of Johnson set to soar the season thereafter.

(For full details on Bosh’s contract and its impact on the Heat’s salary cap situation, including potential cap relief and a possible return of his salary to the Heat’s cap sheet in the seasons thereafter, click this link.)

But the new agreement, when ratified, will have several implications for the Heat in pursuit of its desired summer of 2017 rebuild.  Read more…

NBA, Players’ Association Reach Agreement on New CBA

December 14th, 2016 1 comment
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The NBA and the National Basketball Players Association jointly announced Wednesday that they have reached a tentative deal on a new Collective Bargaining Agreement (CBA), pending ratification by both team owners and the league’s players.

In order to give both sides enough time to review the terms of the agreement, hash out a new CBA, and hold their respective votes to ratify it, they have agreed to extend their mutual deadline to opt out of the existing CBA from Dec. 15, 2017 to Jan. 13, 2017.

Ratification of the deal is, at this point, nothing more than a formality. In the meantime, however, a term sheet containing the key terms of the agreement has been distributed. According to that term sheet, the following changes to the current CBA will be made:
Read more…

The Bizarre Saga of Donatas Motiejunas

December 7th, 2016 No comments
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Update (12/15/16):

The Houston Rockets apparently never actually signed Donatas Motiejunas. But whether they did or did not  sign him is irrelevant. In both cases, the Rockets could have conditioned the contract (in a case where they didn’t sign him, as a condition to offering the contract; and in a case where they did sign him, as a condition to the validity of the contract in accordance with Exhibit 6) on him passing a physical exam. The Rockets did so condition it, and Motiejunas failed. Which returned him to restricted free agency once again. 

After consultation with the league office to find an amicable solution to a contentious situation, the Rockets have renounced their rights to Motiejunas, making him an unrestricted free agent. He is now free to sign with an team except the Brooklyn Nets, who are prohibited from signing or acquiring him until December 9, 2017. 

Update (12/9/16):

The Houston Rockets and Donatas Motiejunas have agreed to a new contract. The Rockets’ first refusal exercise notice to match the offer sheet Motiejunas signed with the Brooklyn Nets has been withdrawn, and the new deal will presumably be signed shortly.

The new deal will contain the same basic structure as the offer sheet (as detailed herein), including $31 million in base salary, $4 million in likely bonuses and $2 million in unlikely bonuses. It will have a salary cap hit for this season of $9.3 million (equal to his $8.3 million base salary, plus $1 million in likely bonuses).

The primary differences between the new deal and the offer sheet will be that: (i) the guarantee on Motiejunas’ second year salary will get pushed back to July vs. March 1, and (ii) the Rockets will be able to trade Motiejunas without restrictions after the end of the season (i.e., the end of the regular season or, if he’s on the playoff roster, after the Rockets either win the title or are eliminated) vs. being restricted from trading him without his consent for one year.

The lengthy saga, however, is not quite over just yet.

The Rockets could have conditioned the new contract on Motiejunas passing a physical examination (Exhibit 6 to the Uniform Player Contract). The determination would be made in the sole discretion of a physician designated by the Rockets. The exam would need to be completed within three business days of executing the contract (which, if it were executed today, would be by next Wednesday) and the results would need to be reported to Motiejunas within six business days of executing the contract (which, if it were executed today, would be by the following Monday).  If the physician appointed by the Rockets determines that Motiejunas has failed his physical, he would be returned to restricted free agency. 

Whatever happens, the Nets are now officially prohibited from signing or acquiring Motiejunas for one year from the date the first refusal exercise notice was withdrawn (i.e. until December 9, 2017 or thereafter). 


Donatas Motiejunas is having a tough time navigating the difficult world of restricted free agency.

There are two types of free agency in the NBA: unrestricted and restricted. Both types of free agents are free to re-sign with their prior teams. An unrestricted free agent is free to sign with any other team as well, and there’s nothing his prior team can do to stop it. A restricted free agent can also sign with any other team, but his prior team can retain him by matching the terms of that offer. This is called the “right of first refusal.”

Restricted free agency is allowed only in limited circumstances: For first-round draft picks who complete all four years of their rookie-scale contracts, and for players who have been in the league for three or fewer seasons. Only these players qualify for restricted free agency, and only if their prior teams first submit to them a “qualifying offer” at some point between the day following the completion of the NBA Finals and the subsequent June 30. A qualifying offer is a standing offer of a one-year guaranteed contract, which the player can accept at any time while it remains outstanding.

Motiejunas was the twentieth pick in the first-round of the 2011 NBA draft. After having completed the fourth and final year of his rookie-scale contract in 2015-16, the Houston Rockets tendered a $4.4 million qualifying offer on June 30, 2016. Motiejunas therefore became a restricted free agent this summer.  Read more…