Raptors Salary Cap Situation (and planning for the future)

[DanH]

With the cap now projected all the way up at 94M (a full 5M higher than initial estimates last summer and still with the moratorium to come):

DeRozan's max is now 26.5M, up to 5/154M total.
Raptors have 5.3M in cap room if both picks are kept and DD's cap hold is kept (all other FA's jettisoned).
Raptors have 20.6M in cap room if picks are kept and all FA's walk.
RFA max is now 22M or 5/126M. JV's 4/64M looking better and better (and it already looked fantastic).

[KHD]

Unless I'm understanding that incorrectly, you're suggesting offering Biz a 2 year MLE with the promise of getting a massive pay increase afterwards. That is against NBA rules, and Minnesota was punished severely for it in the past when they tried to do it with Joe Smith.

Aside from the fact that paying Biz $25M in a given year would be a pretty bad use of cap space, tell me if you think the following consequences are worth potentially getting caught doing that:

- $3.5M fine to the team
- No 1st round picks for the next 5 years
- Voiding of Bismack's contract
- Ownership suspended for a year
- Masai Ujiri forced to step down
- Black mark on the franchise with the league and agents.

the funny thing about it to me is that it's joe friggin smith that they tried to break the rules for. what a waste.

[Gambino]

We covered that further up. He's removed the promise aspect, which removes any reason for Biz to do it.

Ah ok missed that, and yeah then Biz would never do it.

[DanH]

Unless I'm understanding that incorrectly, you're suggesting offering Biz a 2 year MLE with the promise of getting a massive pay increase afterwards. That is against NBA rules, and Minnesota was punished severely for it in the past when they tried to do it with Joe Smith.

Aside from the fact that paying Biz $25M in a given year would be a pretty bad use of cap space, tell me if you think the following consequences are worth potentially getting caught doing that:

- $3.5M fine to the team
- No 1st round picks for the next 5 years
- Voiding of Bismack's contract
- Ownership suspended for a year
- Masai Ujiri forced to step down
- Black mark on the franchise with the league and agents.

We covered that further up. He's removed the promise aspect, which removes any reason for Biz to do it.

[Gambino]

Unless I'm understanding that incorrectly, you're suggesting offering Biz a 2 year MLE with the promise of getting a massive pay increase afterwards. That is against NBA rules, and Minnesota was punished severely for it in the past when they tried to do it with Joe Smith.

Aside from the fact that paying Biz $25M in a given year would be a pretty bad use of cap space, tell me if you think the following consequences are worth potentially getting caught doing that:

- $3.5M fine to the team
- No 1st round picks for the next 5 years
- Voiding of Bismack's contract
- Ownership suspended for a year
- Masai Ujiri forced to step down
- Black mark on the franchise with the league and agents.

[DanH]

Here's my confusion - why wouldn't Biz, if he really wanted to be a free agent two years from now, not just sign a 2 year, 15M per year deal?

There's no scenario where he stays with TOR for the MLE and doesn't take a huge bath to do it.

[DonM]

Why the Raptors might not accept this arrangement:

If the NBA ever found out there was any such agreement ahead of time, it would be considered cap circumvention, Biyombo's contract would be voided, the Raps would face fines and other penalties including loss of draft picks.

DanH. Thank you very much very much for your very constructive criticism of my previous posting. It has provided me with great feedback and assistance. To bring my actions more in line with my intentions, I have posted a second version below .

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I apologize for the horizontal scroll bars after the tables for #1 Alternative and # 2 Alternative but I don't know how to get rid of them.

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How Bismack Byombo Can Make As Much Money By Resigning With The Toronto Raptors

[Hint: It's All About The Massive Amount Of NBA TV Money Coming In Until The 2024-2025 Season and The Number Of Years That An NBA Player Signs His Contract For]

Below are a few excerpts from an article by Kevin Draper at deadspin.com written on October 6, 2014
"What The NBA's Insane New TV Deal Means For The League And For You" Source: http://deadspin.com/what-the-nbas-in...e-a-1642926274

"The NBA announced on Monday that it had struck a nine-year, $24 billion media-rights deal with ESPN and Turner Sports."
"No matter how you slice it, the NBA will be making a hell of a lot of money through the 2024–25 season."
"CBA ramifications:
Since many things are tied to the salary cap—such as maximum salaries, the luxury tax, and the value of the mid-level exception—this has huge ramifications for the value of player contracts.
To prevent this huge jump in the salary cap, Adam Silver said the NBA will begin negotiations with the National Basketball Players Association this afternoon about phasing in the salary cap increases over a number of years."

Below is an example With two alternatives for an NBA player [such as Bismack Byombo] to choose from:

The circumstances: An NBA player becomes a free agent [July 1, 2016] after having played one year [2015-2016] on a 1 year NBA player`s contract with an NBA team

# 1 Alternative: An NBA player signs a 4 year contract with any of the 29 NBA teams other than his current team [$15,000,000 per year for $60,000,000 in total].

# 2 Alternative: a] An NBA payer signs a 2 year Non-Tax Mid Level Exception contract with his current team [$5,628,000 and $5,881,000].
b] After the 2 year Non-Tax Mid Level Exception NBA player contract with his current team expires, the NBA player becomes a free agent for a second time.
c] The NBA free agent signs a new 2 year NBA player contract any one of the 30 NBA teams. This NBA player contract would pay the NBA free agent $24,245,000 per year for each of the 2 years [2018-2019 and 2019-2020].
d] The formula to arrive at #2 Alternative NBA contract offer [2018-2019 and 2019-2020] of $24,245,000 is: $60,000,000 [#1 Alternative: New Team NBA player contract offer for 4 Years] - $5,628,000 - $5,881,000 = $48,491,000 / 2 years = $24,245,500

#1 Alternative: NBA Player Signs 4 Year Contract With Any Of 29 NBA Teams Other Than His Current Team
[NBA Player Chooses To Get Higher Payments in years 1 and 2 and locks into a longer term 4 Year NBA player contract]

Year	Period	$ Payments	# Of Years	Contract Type	Higher $ Contracts & Lock Out Period
1st	2016-17	$15,000,000	4 Years	Cap Space	Player signs 4 yr contract with 1 of 29 teams
2nd	2017-18	$15,000,000	4 Years	Cap Space	Higher $ locked out until F.A. 2020-2021
3rd	2018-19	$15,000,000	4 Years	Cap Space	Higher $ locked out until F.A. 2020-2021
4th	2019-20	$15,000,000	4 Years	Cap Space	Higher $ locked out until F.A. 2020-2021
4 Yr	Total	$60,000,000
4 Yr	Average	$15,000,000

#2 Alternative: NBA Player Signs 2 Year Non-Tax Mid Level Exception Contract With Current Team And Then A Second 2 Year Contract With Any Of 30 NBA Teams
[NBA Player Chooses To Get Lower Payments In Years 1 and 2 And Then Signs a second NBA player contract paying much more]

Year	Period	$ Payments	# Of Years	Contract Type	Higher $ Contracts & Lock Out Period
1st	2016-17	$5,628,000	2 Years	Non-Tax Mid	Player signs 2 year Non-Tax Mid (current team)
2nd	2017-18	$5,881,000	2 Years	Non-Tax: +4.5%	Higher $ locked out until F.A. 2018-2019
3rd	2018-19	$24,245,500	2 Years	Full Bird or N.T. Cap	Higher $ now available. 1st year new contract
4th	2019-20	$24,245,500	2 Years	Full Bird or N.T. Cap	Higher $ now available. 2nd year new contract
4 Yr	Total	$60,000,000
4 Yr	Average	$15,000,000

This illustration quantifies how the massive increases in NBA TV money can make smaller dollar 2 year NBA player contracts at the start of the contract equal to larger dollar 4 year NBA player contracts at the end of the contract
A 4 year contract NBA player is locked out of of higher paying NBA player contracts from New NBA TV money until his existing NBA player contract expires.

Why would the NBA player select a 4 year period? Why wouldn't the NBA player select a series of 1 year contracts and get paid the most he could for each year?
Answer: If the NBA player signed with a new team each year by becoming a free agent each year, all NBA teams would be forced to sign him each year using cap space.
No NBA team would be able to acquire the NBA player's full bird rights [need at least 3 years] making it more difficult for teams to sign him.
As a result, a series of 1 year contracts would diminish the NBA player's market value. It would reduce the number of teams that could offer the player a 1 year contract and the $ amount those teams would be able to give him.

What if the NBA player signs a 2 year Non-Tax Mid Level Exception contract with his current NBA team at the beginning of year 1 [2016-2017]?
Which NBA team would most likely offer the NBA player a 2 year $24,245,500 NBA player contract at the start of year 3 [2018-2019] when he becomes a free agent again?
Answer: The NBA player's current NBA team [the Toronto Raptors in the case of Bismack Byombo]. Why?
29 of the 30 NBA teams would have to sign the NBA player by using cap space. This would be difficult, costly and undesirable for a lot of NBA teams.
Only the NBA player's current Team [the Toronto Raptors] could sign the NBA player [Bismack Byombo] by using full bird rights and would not have to use cap space.

Everyone appears to have accepted that there is no possible way that Bismack Byombo will be back with the Toronto Raptors after this year [2015-2016].
The reason Bismack Byombo would go to another team is that everyone is looking at how much Bismack Byombo would be paid over a 1 year period [2016-2017].

This illustration demonstrates that Bismack Byombo could be paid as much money [$60,000,000] over a 4 year period [2016-2020] from the Toronto Raptors as he could from a new team.

This may not be a perfect solution for Bismack Byombo to remain with the Toronto Raptors. However, it is a viable solution for Bismack Byombo to consider.

[Miekenstien]

As noted in the DeRozan thread, he made even more incentives than expected this year (with the Raps making the ECF his playoff bonus went from $250k to $450k), so his salary was actually 10.35M instead of 10.15M, and his cap hold this summer is going up from the assumed 15.225M to 15.525M. It's only 300k but it's worth noting.

i'm happy he did the most amount of work for his 200 k

[DanH]

As noted in the DeRozan thread, he made even more incentives than expected this year (with the Raps making the ECF his playoff bonus went from $250k to $450k), so his salary was actually 10.35M instead of 10.15M, and his cap hold this summer is going up from the assumed 15.225M to 15.525M. It's only 300k but it's worth noting.

[Bonus Jonas]

Luxury Tax,period. U want 2 go for Championship,that's what u gotta do. There is ure salary cap situation,spend the money 2 Win..ie Jays,enough said.

It's not that easy. Baseball doesn't have a salary cap.

[Dr Hannibal Lecter]

Luxury Tax,period. U want 2 go for Championship,that's what u gotta do. There is ure salary cap situation,spend the money 2 Win..ie Jays,enough said.

[DanH]

Good article Dan. Pimp your stuff anytime. You should be writing for RR. Of course you are, but I mean on the front page.

Thanks.

It was a possibility at one point. I had done some support stuff and enough commentary that there was some discussion of something like that, but the timing was off as I had just started at RapsHQ (both sites had gone through a bit of an overhaul in terms of writers at around the same time).

[Puffer]

I try not to pimp my own stuff very much, but I've got a big salary prep piece for the upcoming draft and free agency up right now that I think is worth a read (note: I may be biased in this matter).

http://www.raptorshq.com/2016/6/1/11...p-update-draft

For those who prefer not to click to read the excess verbage, here are the raw numbers for at the draft:

DeMarre Carroll $13,600,000
Kyle Lowry $12,000,000
DeMar DeRozan $10,050,000
Cory Joseph $7,000,000
Patrick Patterson $6,268,675
Jonas Valanciunas $4,660,482
Terrence Ross $3,553,917
Luis Scola $2,900,000
Bismack Biyombo $2,814,000
James Johnson $2,500,000
Lucas Nogueira $1,842,000
Bruno Caboclo $1,524,000
Delon Wright $1,509,360
Norman Powell $650,000
Jason Thompson $245,177
Ronald Roberts $75,000
Axel Toupane $25,000
Michale Kyser $25,000
Shannon Scott $25,000
Nando de Colo $1,900,000

Total committed salary: $73,169,511

Salary Cap: $70,000,000
Luxury Tax: $84,740,000
Tax Apron (Hard Cap): $88,740,000

And this summer:

Jonas Valanciunas $14,382,024
DeMarre Carroll $14,200,000
Kyle Lowry $12,000,000
Terrence Ross $10,000,000
Cory Joseph $7,315,000
Patrick Patterson $6,050,000
Lucas Nogueira $1,921,320
Bruno Caboclo $1,589,640
Delon Wright $1,577,280
Norman Powell $874,636

Cap projection: $92,000,000
Salary committed: $71M
With draft picks: $73.2M

And cap holds:

DeMar DeRozan $15,225,000
Luis Scola $3,480,000
Bismack Biyombo $3,376,800
James Johnson $3,250,000
Nando de Colo $1,900,000
Jason Thompson $1,136,731

Good article Dan. Pimp your stuff anytime. You should be writing for RR. Of course you are, but I mean on the front page.

[Gambino]

Lol I don't think it's worth potentially throwing away the future of our franchise to re-sign Biz in some super shady way. Let's just play by the rules.

[3inthekeon]

Or the Playoff Shine will have worn off by then and the Raps could easily renege on paying him $24M a season.

Or in 2 yrs Masai isn't our GM anymore.

But Dan nailed it. The Joe Smith penalty would destroy a franchise for years.

And this isn't doing an under the table deal for Steph Curry or Lebron. I've said good things about Biz all year, but give your head a shake - you'd risk those penalties for Bismack Biyombo?