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Raptors Salary Cap Situation (and planning for the future)

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  • #31
    DANH over here over here pick me!

    okay here it goes

    1.) Is there a good guestimate as to how much the cap will rise given players such as Lebron are giving up long term security in order to exploit the new TV deal?

    2.) With the cap expected to rise substantially in July 2016 does that mean flat contracts like Lowry's more or less have the same effect as being frontloaded?
    Last edited by thead; Mon Jul 14th, 2014, 01:58 PM. Reason: meant frontloaded
    For still frame photograph of me reading the DeRozan thread please refer to my avatar

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    • #32
      thead wrote: View Post
      1.) Is there a good guestimate as to how much the cap will rise given players such as Lebron are giving up long term security in order to exploit the new TV deal?
      Tough one. Last time they extended their TV deal (in 2008), the terms went from an average of $767M per year to $930M per year. Projections are based on a) set TV income and b) a 4.5% increase in other revenues. So this season, which uses the 930M in TV revenue, had a total revenue of $4.522B. Projected revenue was $4.481B. So the projections are coming up short. How short? Well, take that 930M off (it's fixed income) and the rest of the BRI was about 1.1% short. So the next couple year's projections, with an additional 1.1% added, are $4.701B (this year) and $4.913B (2015-16). So, by 2016-17, the non-TV revenue portion looks to be $4.215B by itself. With the same $930M TV deal that would mean a cap of $69.4M.

      So. What amount does the TV deal go up? Last time, 6 years after the previous extension, it went up 21%. This time it has been 8 years. So maybe you assume a 28% increase. That would mean $1.19B in TV income. Meaning a total revenue of $5.405B, which translates to a $72.9M cap.

      Or maybe you look at total revenue and assume it is linear with that. In 02-03, when they started the first TV deal I referenced (767M), the total BRI was $2.662B - so non-TV revenue was $1.895B, and the TV deal was at about 40% of other BRI totals. In 08-09, when the newest deal started, the total revenue was $3.608B. So non-TV revenue was $2.678B, and TV revenue was about 35% of non-TV BRI. So based on that, we can assume that the ratio will keep going down - it dropped from 40% to 35% in 6 years, so in 8 years you'd expect it to drop to 29.2%. As noted above, the projected non-TV revenue is $4.215B - meaning $1.23B in TV deal revenue. This seems more reasonable, considering the increase in viewership and revenue in general over the past decade for the NBA. So given that, you'd see a total revenue of $5.445B and a cap of $73.5M.

      Current projections show a cap of $68.7M that year (assuming the same TV deal they are on now), and a cap of 66.5M the year before, so it is a significant difference. Up to an extra 5M, and a total of $7M over the prior year. Bigger jump than this past year, which was a big one.

      2.) With the cap expected to rise substantially in July 2016 does that mean flat contracts like Lowry's more or less have the same effect as being frontloaded?
      Sure. Well, even without big jumps like what might (MIGHT being the operative word) happen in 2016, the cap still rises over time (NBA inflation is much faster than regular inflation). Of course, being frontloaded would make the effect even more extreme.
      twitter.com/dhackett1565

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      • #33
        What happens if we don't sign Kevin Durant , but have Milsap and look for 18- 20 point Sf, what is your financial crystal Ball say

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        • #34
          Heatdreamer wrote: View Post
          What happens if we don't sign Kevin Durant , but have Milsap and look for 18- 20 point Sf, what is your financial crystal Ball say
          Well, by 2016 we are stuck with trades and SnT's to acquire big money talent. So sub in any SF you like in that trade I outlined - just with less assets outgoing if the player is not as good as Durant.

          Otherwise we are stuck with the mid level to make improvements at that point.
          twitter.com/dhackett1565

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          • #35
            The impacts of the new TV deal:











            So no wonder LeBron only signs for 2 years. By doing this he can add up to $5.25M per year on a max contract.

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            • #36
              Good lord, that means the cap could be bordering on $80M in 2016...

              Yeah, DeRozan is not signing an extension with a potential max salary starting at like what, 20M?

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              • #37
                Heatdreamer wrote: View Post
                What happens if we don't sign Kevin Durant , but have Milsap and look for 18- 20 point Sf, what is your financial crystal Ball say

                If we have JV, Millsap, Demar and Lowry, the last thing we need is a SF who provides 18-20 ppg. If we happen to land Durant, then I would imagine Demar is expendable. I see no reason to keep Demar in this scenario, as Durant basically does what Demar does, only better. Also, I imagine Millsap would also be expendable (given JV develops in the post). Lowry, Durant and JV should be plenty to initiate an offense and keep it humming for a starting lineup. Ross would probably fit better next to Durant than Demar, unless Demar turns into a well above average defender. And a solid defensive PF that sets screens and does alot of the little things (like Amir) may be better than a Millsap. Or even Patterson on a cheaper deal than Millsap might be sufficient. Of course, if JV does not develop into a reliable post player, than a guy like Millsap might be great.

                But a lineup of JV, Millsap, Durant, Demar and Lowry looks fantastic on paper, but I just don't see how it can work. There just doesn't seem to be the right balance of skills. The bulk of the defensive responsibility would fall on JV and Lowry so I'm not sure how that would work out.

                And if you add a guy like Durant, you're not doing it to score more points. We already have a top10 offense, it's not like we have trouble scoring...we ain't the Bulls. You simply add Durant to make the offence more efficient and to give you that caliber of player that you can lean on when things aren't going right and to take the tough shots down the stretch.

                From a financial standpoint, with JV, Millsap, Demar and Lowry all making over $10M, it may be best not to even add a Durant to that lineup. What would that starting lineup be worth, ~$70M? Move Millsap and Demar, and then you have options to fill out the roster nicely. Leave Durant out altogether, and you would have options to fill out the roster nicely.

                It would be nice to upgrade the PF position and still have a chance to add Durant to the lineup. I just don't think it makes much sense from a basketball or financial standpoint. People are wondering how LBJ will mesh with Irving and Waiters because there may not be enough ball to go around. How do you find enough ball for JV, Millsap, Durant, Demar and Lowry? Maybe it could work, but then you are basically overpaying some of those guys given the roles they would fill. If Millsap only operates as a stretch 4, then we are squandering his skills and overpaying him for that job, as cheaper options would be available (eg. Patterson). Demar playing off the ball to Durant for $14-15M per would be a huge waste of his skills and money too. How about JV? We gonna pay him $11-12M+ just to rebound and set screens?

                These are things I consider when talking about adding players to our lineup, especially someone like Durant. I like to get the most out of our players, fitting them in a way that maximizes their capabilities, or near about to it. Otherwise, you are overpaying and limiting the teams ability to fill out the roster, with so much money tied up in starting lineup.

                I'm probably the only guy that thinks like this. I'd be ecstatic if we could get Durant, although I think it's extremely unlikely. But I have no interest in doing what MIA did, i.e. pay Bosh the max to be stretch 4. I don't think $18M per year is a wise purchase for a guy to stretch the floor and shoot mid range jumpers and provide good PnR defense. I'd rather pay Patterson $6M and use the other $12M to fill out the roster. Bosh may be worth $18M or more per year, but not in the role he filled in MIA. The same was true for Wade.

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                • #38
                  mcHAPPY wrote: View Post
                  The impacts of the new TV deal:

                  So no wonder LeBron only signs for 2 years. By doing this he can add up to $5.25M per year on a max contract.
                  Yeah, although Coon does oversimplify due to twitter constraints. Say it does actually double (a Wall Street Journal article published yesterday claims that is the NBA's intent) and adds Coon's 900M to the current 930M. Then the 900M gets muliplied by .5 to get the new players' total (450M). Then take off benefits (usually about 8%) to get to 414M in salaries. Then divide by 30 to get a per team salary increase (13.8M). Then multiply by .88 to get the cap increase, since teams spend over the cap, leaving the new cap total at 12.1M additional dollars. Translate that to a max salary (use .42 instead of .44, leaving a cap for max salary purposes of 11.4M) by taking 35% and you see an increase of about 4M for max salaries.
                  twitter.com/dhackett1565

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                  • #39
                    imanshumpert wrote: View Post
                    Good lord, that means the cap could be bordering on $80M in 2016...

                    Yeah, DeRozan is not signing an extension with a potential max salary starting at like what, 20M?
                    Assuming a 900M increase in TV revenue to 1.83B per year, it works out like this:

                    Non-TV revenue (projected): $4.215B
                    TV revenue: $1.83B
                    Total revenue: $6.045B
                    Players' share: $3.023B
                    Salary total: $2.781B
                    Share per team: $92.7M
                    Cap: $82.948M

                    DD would have 7 years of experience at that point. Meaning he would be eligible for 30% of the cap. That's 23.4M. Whoa boy.
                    twitter.com/dhackett1565

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                    • #40
                      Lol we might need James Johnson to take out derozan at the knees to keep that money down

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                      • #41
                        DanH wrote: View Post
                        Assuming a 900M increase in TV revenue to 1.83B per year, it works out like this:

                        Non-TV revenue (projected): $4.215B
                        TV revenue: $1.83B
                        Total revenue: $6.045B
                        Players' share: $3.023B
                        Salary total: $2.781B
                        Share per team: $92.7M
                        Cap: $82.948M

                        DD would have 7 years of experience at that point. Meaning he would be eligible for 30% of the cap. That's 23.4M. Whoa boy.
                        Luckily his cap hold will be 'just' $14.5m.

                        Raps should be in good position regardless.

                        Still looking at plus $6.5m in cap space plus whatever is added in 2015 assuming reported doubling tv deal actually happen.

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                        • #42
                          Rumors are that Fox 1 will get a Saturday package that will increase the tv revenue a little bit more. Can u imagine the average salary will be almost $7 million dollars annually.
                          Guess Bryan Gumble can call Adam Silver a plantation owner as well. I want to live and play on that Plantation.

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                          • #43
                            What does the luxury level become if tv increases by 900 million?

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                            • #44
                              Heatdreamer wrote: View Post
                              What does the luxury level become if tv increases by 900 million?
                              Projection would put it at 99.7M. But there are adjustments made each season depending on how much salary is paid to the players the previous year.
                              Last edited by DanH; Wed Jul 16th, 2014, 11:02 AM. Reason: Oops forgot benefits subtraction - used to say 107.8M
                              twitter.com/dhackett1565

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                              • #45
                                definitions of overpaid would have to change.

                                for instance 2 - 4 million for end of bench guys
                                5 - 10 million for significant role players
                                10 - 15 million for non all star starters
                                15 - 25 for all stars
                                25+ for franchise players

                                spitballing of course. But if Greivis resigns for 8million next contract that would only be 10% of cap for a significant role player
                                For still frame photograph of me reading the DeRozan thread please refer to my avatar

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