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Can the Bulls Bring Over Nikola Mirotic?

Nikola Mirotic is Europe’s best player. Can the Bulls negotiate his buyout and their own cap position to add him next year?

Nate Duncan

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One enormous benefit of Phil Jackson’s hiring by the New York Knicks is that it has quelled the breathless speculation of Carmelo Anthony joining the Chicago Bulls this summer as a free agent. Assuming Anthony does not join the Bulls, their prime addition this summer would likely be Real Madrid power forward Nikola Mirotic. The 23-year-old Mirotic was the Spanish ACB League MVP in 2012-13 and has only improved this season. Much ink has been spilled elsewhere on his game (including my own after an in-person scouting trip last June), but it will suffice to say that his combination of shooting, skill, agility and feel are top-notch for the power forward position.

The video below provides an excellent view of the type of player he is and could become.

https://www.youtube.com/watch?v=JjaHc9Vp9wU

Mirotic would strike particular fear into the heart of opposing defenses running the pick-and-roll with Derrick Rose. His defender would have to stay relatively attached to him to prevent his popping for a three-pointer, while Rose is of course deadly on the play without a big man to deter him from getting into the lane.

Mirotic’s Buyout Complicates the Bulls’ Task

The Bulls face a number of issues bringing over Mirotic starting with his massive 2.5 million Euro buyout, which translates to $3.475 million at current exchange rates.

Buyouts from European teams are an extremely tricky business in the NBA. The Collective Bargaining Agreement prevents teams from spending more than what is known as the Excluded International Player Payment to buyout international players without it counting against the salary cap. This amount is $600,000 in 2014-15 (it has and will go up $25,000 each year of the CBA). Beyond that, any buyout amount is paid by the player. It was this buyout that prevented the Bulls from having a realistic chance to bring him over before this summer. Mirotic was the 23rd pick in the 2011 draft, and therefore was prescribed such a low salary that there is no way it would have made financial sense for him to come to the Bulls before this summer.

This summer, two things will have changed. Most importantly, the Bulls are no longer bound by the rookie wage scale, which previously would have limited Mirotic to a starting salary of a little over $1 million per year and locked him in to team control for up to four years. After three years have passed, a team has the option of signing a draftee to whatever contract it has room for via either cap room or exceptions to the cap. Such a contract must be for at least three years, exclusive of any option years.

The second new development is that the Bulls will have access to either the $5.305 million mid-level exception or cap room, which will allow them to pay Mirotic enough to entice him to come over. Here though, is where it gets even more difficult. Mirotic will have to pay the $2,875,000 remaining on his buyout after the Bulls pay the maximum $600,000 Excluded International Player Payment. Normally, this amount would count as a signing bonus.

However, paying the buyout as a signing bonus has important consequences for the size of Mirotic’s overall contract because of another rule that limits signing bonuses to 15 percent of the overall contract value. If the buyout were paid entirely as a signing bonus, that means the minimum overall value of Mirotic’s contract would be $19.2 million. On a three-year deal, this would require a first-year cap number of approximately $6.1 million, about $800,000 above the mid-level exception amount. The amount of the buyout/bonus allocable to the first (and each successive) salary cap year would be $958,333, or one third of the bonus.* If the Bulls do not amnesty Carlos Boozer to open up cap space greater than the MLE, or would simply like to pay Mirotic less, this would cause problems because they would not be able to give Mirotic a contract starting at less than $6.1 million if the entire buyout were paid as a bonus.

*For cap number purposes, the signing bonus is spread over the guaranteed years of the contract in proportion to the percentage of each contract year that is guaranteed (not the dollar amount paid in that year). Since all of the years of the contract would be fully guaranteed in this scenario, the bonus would be spread equally over the years of the contract.

This leaves two potential solutions. The first would be offering Mirotic a four-year contract. This would allow a cap number of about $4.5 million in the first year. However, Mirotic would be unlikely to take such an offer; a big part of the incentive for him to come to the NBA is to get past his first contract as soon as possible. If he is as good as it appears he will be, his second contract could be into eight figures per year.*

*One idea to make coming over more palatable, as suggested to me by Danny LeRoux, would be for Mirotic to have a fourth-year player option on his contract. This would at least allow him a larger guarantee if he is injured or underperforms. The bonus could not be spread over the fourth year because it is an option year, but it would at least make the offer slightly more appealing to Mirotic. Edit: As I wrote here (scroll down) it is not clear whether the contract could legally contain an option or not.

The second potential solution would allow the Bulls to fit Mirotic within the mid-level exception while still providing him enough cash at signing to pay his buyout. If Mirotic were to sign for the full MLE amount, his signing bonus would be limited to about $2.47 million.* This would result in a shortfall of about $397,000 to pay his buyout. However, he and the Bulls could take advantage of a provision in the CBA that allows the advance payment of salaries for a given season starting on July 1. Up to 25 percent of a player’s base compensation (i.e., not including bonuses) may be paid before October 1, and another 25 percent may be paid before regular checks start on November 15. The first 25 percent could easily cover this, as that amount would be a little over $1.1 million. Therefore, Mirotic could be given almost $3.6 million immediately upon approval of the contract, more than enough to pay the buyout.

*This is slightly less than 15 percent of the overall contract, for reasons explained by Larry Coon.

Of course, such gyrations very well might not be necessary. I am not a specialist in the Byzantine world of European basketball contracts, but it is often the case that European teams are willing to negotiate a buyout down as a reward for excellent service and/or to maintain a reputation as a good place to play. It also is not necessarily the case that all of the buyout would be due immediately, or that it could not be paid over time. But this approach would guarantee that Mirotic could meet any draconian buyout terms, if needed. In fact, that might assist in the effort to negotiate it down.

The Mirotic Negotiations Will be Fascinating

On the other hand, if the Bulls do amnesty Boozer (as appears likely), an intriguing negotiation could develop. Rare is the situation where both sides have so much leverage and yet so much incentive to get a deal done.

From Mirotic’s standpoint, he makes a reported 3.5 million Euros per year from Real Madrid, or about $4.8 million.* Contrast that with his buyout amount of $3.475 million. Considering his buyout, he will be taking a paycut over the next three years if he signs for the MLE. This would be taken out of his contract, although an international tax lawyer I consulted stated that the buyout expense should be deductible against income. Mirotic is by all accounts very happy in Spain, and plays for a dominant team. Moreover, he is really good. The Bulls desperately need the offense he would bring, and given his European performance he might merit a contract of almost eight figures right away if he were on the open market. Ryan Anderson is in the midst of a four-year, $34 million contract, and Mirotic projects to be at least his equal as a player. All of these tend to favor him getting a larger salary from the Bulls.

*Edit as of April 30, 2014: I have had multiple sources tell me that there is no way Mirotic makes anywhere near $3.5 million Euros, and in fact that they would be shocked if it is over 1 million Euros per year. That changes the calculus for him significantly.

On the other hand, the Bulls have Mirotic’s exclusive draft rights. While he is no longer bound by the rookie scale, it is not the same as if he were on the open market. Back before the rookie scale, rookies still were not paid quite as much as they would have been as veteran free agents because they can only negotiate with one team. Perhaps more importantly, Mirotic will want to get to free agency as soon as possible so that he can truly maximize his earnings over the course of his career with two big contracts that he could never hope to match in Europe. At age 23 and forced to take a minimum three-year deal to start, he needs to get to the league now. Mirotic also faces the risk that his demands will be so steep that the Bulls will decide to use their cap space on someone else, retain his rights, and go through the whole dance again next year. Mirotic is so appealing precisely because the Bulls have his exclusive draft rights and can expect to get him on a value contract. If he totally eliminates that appeal, they could go in another direction and push back the clock on his potential big payday another year.

The timing issue will also be fascinating. If the Bulls get under the cap, Mirotic will need to convince them that their cap space is worth using on him during the fast-moving free agent market. The Bulls will fear missing out on free agents and being stuck with a ton of cap space and nobody to use it on except Mirotic. That, of course, would increase his leverage. Yet by waiting, Mirotic takes the risk the Bulls will settle on someone else and be left with minimal or no cap space to offer him a deal.* This would be a bitter pill to swallow indeed and also likely lead to his remaining in Europe for another year.

*A previous version of this article stated that the Bulls could offer Mirotic their $2.7 million Room Exception for teams under the cap. However, Room Exception contracts are limited to two years. Because any Mirotic deal in excess of the Rookie Scale must be for three years, the Room Exception cannot be offered to Mirotic.

I expect a deal to get done, because both sides ultimately have the incentive to make it happen. But each also has powerful leverage on their side to push the numbers in their direction. Either way, the negotiations between Mirotic and the Bulls promise to be absolutely enthralling.

Noah and Gibson’s Incentives: The Gifts That Keep On Giving

Others have previously reported on the luxury tax ramifications incentives for Joakim Noah and Taj Gibson might have for the Bulls this season. To refresh, Noah is due a $500,000 bonus if he makes first-team All-NBA, while Gibson will earn $250,000 for making the All-Defensive Second Team and another $250,000 ($500,000 total) for making the All-Defensive First Team.  While the last of these is likely out of reach for Gibson, there is a good chance these players combine to add $750,000 to their ledgers this year.

Reaching these incentives this year would also have cap ramifications for next year, assuming the players have similar incentives in 2014-15. The general rule is that incentives are included as a part of team salary if they were earned the previous year. So, any incentives earned by Noah and Gibson in 2013-14 would by default be included in the Bulls’ team salary for next season. This could lower the available cap room for the Bulls by the amount of those incentives for 2014-15, presumably $750,000 again.

Although these incentives would be included in team salary by default, there is still a procedure by which this could be challenged by the NBAPA, which theoretically has an incentive to create more cap room so that other players can get paid more. The Players’ Association can request that a basketball expert jointly selected by it and the NBA determine whether it is very unlikely that the bonus will be earned.*

*The full procedure:
1. The expert conducts a hearing within five business days, and renders a determination within five business days after that.
2. The party initiating the proceeding has the burden of proof.
3. To grant the challenge, the expert must find that player is very unlikely to earn the bonus (in the case of an NBAPA challenge) or very likely to earn bonus (in the case of an NBA challenge).
4. No party can mention whether the bonus would or wouldn’t be included under the default rule.
5. The expert’s opinion is unappealable.
6. The costs of the expert are borne equally by the parties.

In practice, however, the NBAPA has rarely challenged such designations, and seems unlikely to now when they still lack a union leader (although that will hopefully be rectified by July). Note that there is no procedure for the Bulls themselves to challenge the likely or unlikely designation of the incentives; although the team might like to do so the NBA and the NBAPA are the only parties that may initiate the procedure.

Nate Duncan is an NBA analyst and attorney. He writes regular features for Basketball Insiders and chats weekly at 11 Eastern on Tuesdays.

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NBA Daily: Rookie Contributors Lifting Playoff Teams

This year’s impressive rookie class has translated their regular season performances to the playoff stage.

Dennis Chambers

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This past NBA season had the luxury of an incredibly entertaining and high-powered rookie class. Every other day it seemed like the feats of either Donovan Mitchell, Jayson Tatum, Lauri Markkanen, Dennis Smith Jr., Kyle Kuzma, or Ben Simmons were dominating the discussion about how advanced the league’s crop of newbies appeared to be.

As a result, the 2017-18 Rookie of the Year race was a much more heated discussion than the year before.

With the impressive campaign these NBA freshmen put together, it should come as no surprise that on the on bright stage of playoff basketball, three of the aforementioned crop are helping lead their team’s in tight first-round battles.

Donovan Mitchell has been the leading scorer for the Utah Jazz through two games in their series against the Oklahoma City Thunder. Jayson Tatum is stepping up for the Boston Celtics to help fill in the void of Kyrie Irving as they take on the Milwaukee Bucks. Ben Simmons is nearly averaging a triple-double through three games for the Philadelphia 76ers in their matchup with the Miami HEAT.

Lottery pick talents are expected in today’s NBA to come in and have some level of impact for their clubs. Usually, they play the role as a foundational building block that shows flashes of promise with an expected up-and-down first season. While these three playoff contributors haven’t been perfect all year long, under the pressure of the postseason, they’ve stepped up their play and appear to be avoiding the learning curve.

With that, let’s highlight further what Mitchell, Tatum, and Simmons have been able to do thus far in the postseason.

Donovan Mitchell, Utah Jazz

All season long Mitchell threw the entire scoring load of Salt Lake City on his back for the Jazz and helped carry them to a 5-seed in the Western Conference when early season projections suggested they should head towards in the wake of Rudy Gobert’s injury.

However, the 13th pick out of Louisville had no intentions of missing out on the postseason. And from the looks of his production so far, who can blame him?

Through the first two games of the Jazz-Thunder series, Mitchell yet again placed his name in the same breath as Michael Jordan. Mitchell’s 55 points in his first two playoff games broke Jordan’s record of 53 for most points scored by a rookie guard in that scenario.

Mitchell’s 27 points in Game 1 and 28 points in Game 2 led the Jazz to even the series and steal home court advantage from the Thunder. While he hasn’t been responsible for setting up the team’s offense, tallying just five assists through those two games, Mitchell is fulfilling the role of Gordon Hayward as the team’s primary scorer.

In a series against a team that features the likes of Russell Westbrook, Paul George, and Carmelo Anthony, Utah needs Mitchell to go out there and get as many buckets as he possibly can.

So far, he appears to be welcoming the challenge.

Jayson Tatum, Boston Celtics

When it was announced that Kyrie Irving would be lost for the entire postseason due to injury, the Boston Celtics’ hold on the 2-seed seemed a lot less intimidating than it once was in the Eastern Conference.

However, three games into the first round series against the Bucks, the Celtics hold a 2-1 lead. A lot part of that has to do with the role Tatum has been able to step in and play right away with the Celtics down their main scorer and playmaker.

Throughout the first three games of the series, Tatum 12.3 points, 7.3 rebounds, 2.3 assists, and 2.3 steals. The third overall pick in the 2017 draft started the series off with 19 points, 10 rebounds, and three steals to help Boston start off the matchup with a 1-0 lead.

At just 20 years old, Tatum is matching his age number with his usage percentage thus far against Milwaukee. For some perspective, Jaylen Brown managed just 12 minutes a night for the Celtics last season as a rookie when the playoffs rolled around.

Granted, injuries and missing players are helping in Tatum being on the court as much as he has, but the rookie is earning his time out there on the court.

Ben Simmons, Philadelphia 76ers

The perceived frontrunner for Rookie of the Year, Ben Simmons has taken control in his first ever playoff series.

For starters, Simmons is averaging nearly a triple double over his first three games against the HEAT; 20 points, 10 rebounds, and 9.7 assists.

On top of his triple double ways, Simmons has upped arguably his biggest weakness so far in the playoffs, shooting 75 percent from the charity stripe. During the regular season, Simmons struggled from the line, hitting only 56 percent of his attempts.

With the offensive prowess of Simmons obvious, it’s the job he’s doing on the defensive end of the court against an aggressive and tough Miami squad that’s elevating his play to the next level.

Simmons’ ability to switch all over the defensive end of the court has placed his responsibilities from Goran Dragic to Justise Winslow to James Johnson, and seemingly everywhere in between.

Now with Joel Embiid back in the fold for the Sixers and Simmons, the rookie point guard has his defensive partner on the floor to help ease the workload on that end. A two-way performance each night will be imperative for Simmons in helping lead the young Sixers past the experienced HEAT team.

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Pelicans Role Players are Key to Success

The supporting cast in New Orleans is a big part of their playoff surge, writes David Yapkowitz.

David Yapkowitz

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The New Orleans Pelicans have taken a commanding 3-0 lead in their first-round playoff series again the Portland Trail Blazers. While surprising to some, the Pelicans only finished one game behind the Blazers in the standings. The Pelicans have the best player in the series in Anthony Davis and the defensive duo of Rajon Rondo and Jrue Holiday have stifled Portland’s backcourt.

The truth is, the Pelicans have been a good team all season long. A lot of attention and recognition has been given to Davis, Rondo and Holiday this season and playoffs, and rightfully so. But New Orleans wouldn’t be where they are without the important contributions of some of their role players.

Take E’Twaun Moore, for example. Moore bounced around the NBA early in his career, with stops in Boston, Orlando and Chicago before finding long-term stability contract wise with the Pelicans. He’s primarily been a bench player with them before this season, his second in New Orleans, his first as a full-time starter.

He’s given the Pelicans a huge boost, especially from the three-point line. He’s put up 12.5 points per game on 50.8 percent shooting from the field, both career-highs. He’s shooting 42.5 percent from three-point range.

“I think it’s just our style of play,” Moore told Basketball Insiders. “We play fast and open. Coach [Gentry] gives us a lot of freedom, a lot of confidence. That’s why my game is up, my shooting is up.”

It’s not just offensively though. Moore has always been one of the more underrated defensive guards in the league. Paired up alongside Rondo and Holiday, the trio form a solid wing defensive unit. They’re a big reason for Portland’s offensive struggles.

Moore is the type of role player that every playoff contender needs to succeed. He knows that his role may change from game to game. Some nights he may be asked to score a little more. Other nights his defense is going to be called upon. Whatever it may be, he’s always ready to do what’s asked of him.

“I bring the energy. I bring a spark,” Moore told Basketball Insiders. “It’s knocking down shots, playing defense, getting out in transition. Just trying to be a spark.”

The Pelicans bench has also been a huge factor all season long. Their depth took a major hit early in the season with the injury to Solomon Hill. Hill has since returned to the lineup, but his absence paved the way for other players such as Darius Miller to step up.

This is Miller’s second stint with the Pelicans after spending two years overseas. Drafted 46th overall in 2012, he didn’t play much his first three years in the NBA. In 2014, he was cut by the Pelicans only about a month into the season. This year was different, he was thrown into the rotation from the get-go.

“This is a huge opportunity,” Miller told Basketball Insiders. “I just come in and try to work every day, try to get better every day. My teammates have done a great job of putting me in situations where I can be successful.”

Miller has given the Pelicans a capable stretch four in the second unit who can slide over to small forward if need be. He’s averaging a career-best 7.8 points per game, the most out of any of New Orleans’ reserves. He’s their best three-point shooter off the bench, connecting on 41.1 percent of his long-range attempts.

While he acknowledges that he’s enjoying his best season yet as an NBA player, he’s quick to praise his teammates for allowing him to flourish.

“I just try to bring a spark off the bench. I come in and try to knock some shots down,” Miller told Basketball Insiders. “My teammates do a great job of finding me when I’m open, I just try and knock down shots and compete.”

Sometimes time away from the NBA helps players grow and mature. The NBA game is fast paced and it can take awhile to get used to it. While some players have begun to use the G-League as a means of preparing for the league, Miller took an alternate route of heading to Germany.

For him, it’s a big reason why he’s been able to make an easier transition back to the NBA. His contract for next season is non-guaranteed, but he’s probably done enough to warrant the Pelicans keeping him around. He’s a much different and much-improved player. If not, he’s sure to draw interest from other teams.

“It was a lot to learn for me personally,” Miller told Basketball Insiders. “I had to learn a lot of different things like how to take care of my body, how to manage my time, a whole bunch of stuff like that. The time overseas really helped me to mature and grow up and learn a few things.”

These Pelicans have most certainly turned quite a few heads since the playoffs began. We shouldn’t deal too much with hypotheticals, but it’s interesting to wonder what this team’s ceiling would’ve been had DeMarcus Cousins not been lost for the season due to injury.

This is a confident bunch, however. They’ve beaten both the Golden State Warriors and Houston Rockets during the regular season. They’ve already shattered a lot of expert predictions with their performance in the first-round. The Pelicans feel like they can hang with anyone out West.

“As far as we want to go,” Miller told Basketball Insiders. “I feel like we’ve competed with all the best teams in the league this whole season. We just got to come out, stay focused and do what we do.”

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Is LeBron Enough For Cavs To Get Through The East?

Cleveland’s offense has struggled through the first two games of the playoffs. Can the four-time MVP consistently bail them out? Spencer Davies writes.

Spencer Davies

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After a less-than-encouraging series opener versus the Indiana Pacers, LeBron James responded emphatically and led the Cleveland Cavaliers to a bounce back 100-97 victory to even things up at one game apiece.

Scoring the first 13 points of the game itself, The King was a one-man wrecking crew out of the gate and carried that momentum throughout all four quarters of Game 2. His 46 points were James’ second-highest scoring mark between the regular season and the playoffs. In addition, he shot above 70 percent from the field for the sixth time this year.

The four-time MVP pulled down 12 rebounds total, and but all but one of those boards were defensive—the most he’s had since Saint Patrick’s Day in Chicago a month ago.

What James did was another classic instance where LeBron reminds us that through all the injuries, drama, and on-court issues, whatever team he’s on always has a chance to go all the way. But having said all of that—can the Cavaliers realistically depend on that kind of spectacular effort for the rest of the postseason? It’s a fair question.

Kevin Love is a solid secondary go-to guy, but he’s struggled to find his rhythm in the first two games. He’s done a solid job defensively between both, but he’s getting banged up and is dealing with knocked knees and a reported torn thumb ligament in the same hand he broke earlier in the season.

Love has admitted that he’d like more post touches instead of strictly hanging out on the perimeter, but it’s on him to demand the ball more and he knows it. But finding that flow can be challenging when James has it going and is in all-out attack mode.

Kyle Korver came to the rescue for Cleveland as the only shooter that consistently converted on open looks. Outside of those three, and maybe J.R. Smith, really, there hasn’t been a tangible threat that’s a part of the offense during this series.

We all pondered whether or not the “new guys” would be able to step up when their respective numbers were called. So far, that hasn’t been the case for the most part.

Jordan Clarkson looks rushed with tunnel vision. Rodney Hood has had good body language out there, but seems reluctant to shoot off dribble hand-offs and is second-guessing what he wants to do. The hustle and effort from Larry Nance Jr. is obvious, but he’s also a good bet to get into foul trouble. Plus, he’s had some struggles on an island against Pacer guards.

As for George Hill, the good news is the impact on the floor just based on his mere presence on both ends (game-high +16 on Wednesday), but he hasn’t really done any scoring and fouled out of Game 2.

Maybe these things change on the road, who knows. But those four, the rest of the rotation, absolutely have to step up in order for the Cavaliers to win this series and fend off this hungry Indiana group, which brings us to another point.

Let’s not forget, the offensive issues aren’t simply because of themselves. After all, the Cavs were a team that had little trouble scoring the basketball in the regular season, so give a ton of credit to the Pacers’ scheme and McMillan’s teachings to play hard-nosed.

Unlike many teams in the league, the strategy for them is to pressure the ball and avoid switches as much as possible on screens. The more they go over the pick and stick on their assignments, the better chance they have of forcing a bad shot or a turnover. That’s what happened in Game 1 and in the majority of the second half of Game 2.

Cleveland has also somewhat surprisingly brought the fight on defense as well. In the first two contests of the series, they’ve allowed under 100 points. Lue’s said multiple times that they’re willing to give up the interior buckets in order to secure the outside, and it’s worked. It doesn’t seem smart when there’s a yellow-colored layup line going on at times, but it certainly paid off by only allowing 34 percent of Indiana’s threes to go down.

Still, looking ahead to what the Cavaliers can do in the playoffs as a whole, it doesn’t bode well. They’re not only locked in a tug-of-war with Indiana, but if they get past them, they could have a Toronto Raptors group chomping at the bit for revenge.

If they’re having this much trouble in the first round, what should make us believe they can barrel through the Eastern Conference as they’ve done in the past?

It’s not quite as obvious or as bad as Cleveland’s 2007 version of James and the rest, but it feels eerily similar for as much as he’s put the team on his back so far. The organization better hope improvement comes fast from his supporting cast, or else it could be a longer summer than they’d hoped for.

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