The Cleveland Cavaliers are stacked. They’re a nearly perfect team on paper.
They’re also going to be very expensive next year.
Want to see how expensive?
I had a fun-filled 45 seconds creating the excel document below for someone who asked me for it. I thought you might enjoy it too. Pick whatever numbers you want. See how ludicrous (or how reasonable) you can make their 2015-16 payroll obligations!
You can change any of the numbers with light grey backgrounds. You can make them whatever numbers you want (within the parameters of what is legal; if you make a mistake, the number will change color to red to alert you). If you don’t want a player to return, simply delete his salary (or set it to $0).
If you’re feeling particularly ambitious, you can even model potential trade scenarios into this. But bear in mind that the Cavs have limited assets for trade. They still have their 2015 first round pick, but because of a swap right given to the Chicago Bulls, it will likely be a very low pick (the pick attributable to whichever of the Bulls or Cavs finish with a better regular season record), and it can’t be traded until after the selection is made anyway. And because they owe their 2016 first round pick to the Boston Celtics, which is top-10 protected through 2018 and unprotected in 2019, thanks to the Ted Stepien rule, they are restricted from trading any further first round pick until that which is two years after the obligation to the Celtics is fulfilled. Do you really want to be trading picks that could extend out to 2021? As far as second round picks, the Cavs don’t even have any until the year 2020.
I have added notes for each row to guide you along. If you mess up, just refresh the page and start over. Enjoy!
These numbers, of course, need to be viewed in context.
Dan Gilbert, owner of the Cavs, has an estimated net worth of $4.5 billion. His basketball team has an estimated valuation of nearly another $1 billion. The Cavs produced an estimated operating profit of $20 million last season, and that was without LeBron James. And the league’s new national TV rights deal, which kicks in two years from now, will add an immediate $18 million to per-team profitability (which amount shall further increase by 5 percent every year thereafter).
On the other hand, the Cavs are, by the league’s definition, a small-market team (the 11th smallest in the NBA). The estimated $20 million of operating profit from last season was generated on the basis of a total player payroll (net of luxury tax and escrow reimbursements) of about $60 million. And while revenues will surely increase substantially with the addition of LeBron James, any increases will restrict the team’s ability to receive revenue sharing distributions (an ugly consequence faced by the small-market Miami Heat last season).
What does it all mean? As you generate projected total salary obligations well into the nine-figure range, it would be reasonable to conclude that the Cavs could turn unprofitable, even sharply so, at least for one season. After that, however, with the new national TV deal and potential lockout to serve as potential catalysts, the Cavs could actually become surprisingly affordable.