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How Can The Cavaliers Improve Their Roster?

The Cavaliers are off to a mediocre start, especially on defense. Can they upgrade the roster going forward?

Nate Duncan

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The Cleveland Cavaliers have been the league’s most newsworthy team in the first two weeks of the season, sputtering to a 1-3 start before their offense regrouped to lead the team to back-to-back wins against the Denver Nuggets and New Orleans Pelicans. Nevertheless, the first two weeks have removed any hope that this team would play passable defense out of the gate, and cast doubt on their ability to do so even in the long-term with a roster that that is missing a shot-blocker and adequate defenders in the backcourt.

With this backdrop, we turn to four key transactions the Cavaliers have made since the acquisition of Kevin Love.

• Acquired the fully non-guaranteed $5.3 million contract of Keith Bogans from the Boston Celtics for non-guaranteed players and second-round pick swaps.
• Traded Bogans and a 2018 second-rounder to the Philadelphia 76ers, acquiring a $5.3 million trade exception.
• Agreed on a three-year, $30 million extension with Anderson Varejao that locks him up through the 2017-18 season. The second year is almost entirely guaranteed, while the third year is non-guaranteed.
• Did not reach an agreement with Tristan Thompson on an extension. Thompson was believed to be seeking at least eight figures per year beginning in 2015-16. He’ll be a restricted free agent in July.

The Cavaliers currently sit at about $72.8 million in salary, $4 million below the projected luxury tax line. The reasons for the Bogans transactions are clear. The Cavs were able to acquire more salary for subsequent trades by aggregating the non-guarantees, but then were able to avoid the tax and still maintain some flexibility by exchanging Bogans for a trade exception equal to his salary. It should be noted that Dan Gilbert, reputed by some to be an owner immune to such pressures, did green light a trade that provided less future flexibility in exchange for savings.* With the trade exception, the Cavs are limited to acquiring $5.4 million in salary (the trade exception plus $100,000), whereas Bogans’ contract could have allowed them to acquire up to $6.6 million if over the tax, or $7.9 million if under the tax. Moreover, Bogans could be aggregated with other players, such as Brendan Haywood’s non-guaranteed $10.5 million contract next summer, to acquire salary up to 125 percent of their combined $15.8 million salaries.

*The Cavs likely saved around $10 million in this transaction when considering Bogans’ actual salary, foregone luxury tax distributions once the team is over the tax and actual tax payments, so it’s perfectly understandable why they went this route considering the likely tax payments in future years. On the other hand, they might have figured out another way to get under the tax later in the year if needed to maintain flexibility.

The Varejao extension was curious in timing, even though he was set to reach free agency this summer. While he has been a Cleveland stalwart as the city’s longest-tenured pro athlete, at age 32 his best years are behind him. He has also struggled to stay healthy in his career, playing over 31 games once in the last four years. What’s more, Varejao probably isn’t even worth $10 million per season this year, as Tristan Thompson has been closing games at center for the Cavs. The cap will be going up in 2016-17, but $10 million a year is still close to quality starter money even under a $90 million projected cap (assuming, as appears increasingly likely, there will not be smoothing of the money from the new television deal and it will hit all at once in 2016-17). As a borderline starter now, the chances of him being worth that kind of money at age 34 are slim.

By contrast, there would have been almost no risk to Cleveland by letting him play out the year and become a free agent. Even if he stays healthy all year, it is difficult to believe Varejao would command a two-year deal for $10 million a season on the open market next summer. Even if he were to receive such an offer, it is difficult to believe that a Cleveland fixture playing on a stacked team with LeBron James wouldn’t at least give the Cavs a chance to match or exceed an offer in free agency. And by signing Varejao now, they take on all the risk of age- or injury-related performance decline, in exchange for almost no chance of locking Varejao up at a below-market deal.

The Varejao extension should not be evaluated solely in a vacuum though. The opportunity cost for next season and beyond is the key consideration. LeBron James and Kevin Love have player options for 2015-16, which they will almost certainly decline so they can sign new maximum contracts. Kyrie Irving’s maximum extension kicks in, and Tristan Thompson will likely be re-signed for something into eight figures. That alone will put the Cavaliers around $90 million in payroll, about $9 million above the projected luxury tax line.

The Cavaliers also have Haywood’s non-guaranteed final season of his contract, which rises to $10.5 million on their books after only $2.2 million this year for the Cavs.* The Cavaliers can use Haywood’s contract to match salaries, and use their protected first-rounder from Memphis** and/or Dion Waiters as a sweetener to pick up another big man. Players with 2016 expiring contracts like Roy Hibbert, David West, Al Horford, Timofey Mozgov or Nene might all conceivably be available for such a package if their teams fear losing them as free agents.

*This is because he was amnestied, meaning the remainder of his contract this year is being paid by Dallas. Amnesties only apply to the guaranteed portion of the contract, so Dallas’ responsibility ends next year and he appears in full on the Cavaliers’ books.
**The Memphis pick protections: Top-five protected and 15-30 protected through 2016, top-five protected in 2017 and 2018, unprotected in 2019. It will likely be conveyed in the high teens or early 20s in 2017 if Memphis continues on its current track, but could be much higher if the Grizz lose Marc Gasol this summer.

If the Cavaliers were to acquire one of the previously mentioned players, their salary structure might look something like this.

Cavs 2016-17 projection

That is a payroll over $102 million, without accounting for more salary potentially obtained via the Bogans trade exception, or a signing by the taxpayer mid-level exception of $3.4 million. A $102 million payroll would mean a luxury tax payment of $46 million, and it would rise at a rate of $3.75 per $1 in salary from there, with an additional 50 cents per $1.00 for every $5 million increment over $106 million in payroll.* Paying $9.6 million to Varejao in 2015-16 could cost Dan Gilbert more than double that in luxury tax payments. That will be quite a bitter pill if Varejao declines or is injured.

*Note that these figures are based on the projected cap and tax for 2015-16. It will not be finalized until next July.

As a tax team, the Cavs’ transactions will be limited. They will not be able to engage in sign-and-trades since they have a team salary above the apron (a figure $4 million above the tax line), eliminating perhaps the most useful potential application of Haywood’s contract—obtaining a free agent rim protector such as Marc Gasol, Robin Lopez, Hibbert (if he opted out) or Omer Asik. And they can only acquire players up to 125 percent of the traded salary, instead of for Haywood’s $10.5 million salary plus $5 million were they not in the tax. Other players could also be added to the trade to increase the amount received, of course.

The options to improve are somewhat limited for the Cavs aside from that Haywood trade. Would it be otherwise if the Cavs had not extended Varejao? Possibly, although it would also require moving on from Tristan Thompson and renouncing his rights next summer. There are off-court considerations here, as Thompson is a client of Klutch Sports, an agency with which James is heavily involved. Thompson has his strengths and can be a dominant offensive rebounder, but his lack of shooting range and ball skills make him a center offensively despite his power forward size. It is hard to imagine him holding up at the rim or on the block the way a center needs to defensively, even with the improvement most young players experience. The Cavs also have Kevin Love already at power forward. Moving on from Thompson would be reasonable if the Cavs could replace him with a better option at center or shooting guard. That is a decision that did not have been made until they knew another option were available at the onset of free agency.  Waiting to extend Thompson made sense, especially if he was not going to come at a discount.  But it would have made more sense in conjunction with foregoing an extension for Varejao as well.

If the Cavs would have parted ways with Thompson and Varejao, the payroll looks like this during free agency, accounting for cap holds to James and Love once they have opted out. (Those cap holds are what they likely would eventually sign for anyway.)

2015 No Thompson

With a payroll of about $78 million, Cleveland could deal Haywood in a sign-and-trade, so long as the team salary did not exceed the $85 million apron at the conclusion of the trade. The Cavs would then be hard-capped during the year at the apron. Depending on the amount of salary acquired (or whether they just make a trade rather than a sign-and-trade), they might also have been able to use some combination (though likely not each) of the Bogans trade exception, the full mid-level exception or the bi-annual exception. The Cavs could also have opened up maximum cap room in the unlikely but terrifying scenario that Kevin Love leaves as a free agent.

It may well be that Varejao and Thompson play well and the Cavs want to bring this whole band back together next season. But as some of the early struggles have shown, success is by no means assured. It probably made more sense for the Cavs to wait to extend Varejao and keep their options open for next summer, especially considering they are not sure how this new team is going to play as a unit. But now that Varejao’s extension has assured the Cavs of a high payroll, it probably makes sense to re-sign Thompson as well since they will have no way to replace him so far over the cap. They will also need him as insurance for Varejao’s potential health issues.

The Cavs’ lack of flexibility remains an issue as we look further ahead. Return to the 2016-17 projection:

Cavs 2016-17 projection

While the rest of the league will be flush with cash, assuming the cap explodes to $90 million in 2016, the Cavaliers will likely be looking at another big tax bill. Given the amount the cap is projected to rise in 2016, Love and James may both sign similar contracts to LeBron’s most recent deal, two years with a second-year player option. This will allow them to become free agents again in 2016, when their individual maximums should be about $30 million and $25 million respectively if the cap rises to $90 million with no smoothing. Between James, Love, Irving, Varejao, Thompson’s new contract, the potential Haywood trade booty, a new contract for Waiters* and various smaller contracts, the Cavaliers are looking at about $118 million in payroll for 2016 and a huge tax bill even with the exploding cap. Now there are various permutations by which they could avoid being a tax team in 2016, but the chances of adding a player using cap room (which would require a team salary well below $90 million in the summer of 2016) are low indeed with this salary structure.

*His $10.3 million cap hold is indicated on the graphic.

The coming years are going to be fascinating for the Cavaliers. They are not without avenues for improvement, as Waiters, the Haywood contract and the Memphis pick could net some juicy pieces in a trade. But to make that happen, it seems almost certain that Gilbert will be paying massive luxury tax bills. The early extension for Varejao may greatly complicate the Cavs’ task going forward.

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: Rich Cho Out As Charlotte Hornets GM

The Charlotte Hornets opted to not move forward with GM Rich Cho and are expected to pursue former Lakers GM Mitch Kupchak.

Buddy Grizzard

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The fateful moment for Rich Cho came days after he was hired as GM of the Charlotte Hornets in June of 2011. With the NBA Draft coming up just nine days later, Cho started work on a three-team trade that would land Charlotte a second top-10 pick to pair with its own ninth pick, which was used to draft franchise cornerstone, Kemba Walker.

In that draft, Klay Thompson went 11th to the Golden State Warriors and Kawhi Leonard went 15th to the Pacers. Of the 17 players selected after Bismack Biyombo, whom went to the Hornets with the seventh pick, 12 are regular contributors on current NBA rosters. The Orlando Magic are currently being outscored by 11.6 points per 100 possessions with Biyombo on court, a rotation-worst.

Today, Hornets owner Michael Jordan announced that Cho is out as Charlotte’s GM.

“Rich worked tirelessly on behalf of our team and instituted a number of management tools that have benefited our organization,” said Jordan in a press release. “We are deeply committed to our fans and to the city of Charlotte to provide a consistent winner on the court. The search will now begin for our next head of basketball operations who will help us achieve that goal.”

While the failure to obtain Thompson, Leonard or any of the other numerous impact players in the 2011 draft will always mar Cho’s record, falling to the second pick in the 2012 NBA Draft will continue to haunt the Hornets. Despite a brutal 7-59 record in the lockout-shortened 2011-12 season, which set the record for lowest win percentage in an NBA season (.110), the New Orleans Pelicans won the right to the first overall pick in the 2012 NBA Draft and selected Anthony Davis.

The Hornets selected Michael Kidd-Gilchrist with the second pick. Although the 2012 Draft wasn’t nearly as deep as 2011’s, the Hornets still left players like Bradley Beal (third) and Andre Drummond (ninth) on the board. Either player would have been an outstanding compliment to Walker, who remains with the team despite rumors of his availability leading up the the trade deadline.

“I feel like I’m going to be in Charlotte,” said Walker at his All-Star media availability. “So that’s where I’m at, that’s where I’m playing. So I never really sat and thought about any other teams.”

Walker made his second All-Star appearance after Kristaps Porzingis suffered a season-ending ACL injury.

“I wish K.P. hadn’t gotten hurt,” said Walker. “Everybody hates to see guys go down, especially great players like him. But when I was able to get the call to replace him, it was a really good feeling.”

Another fateful moment in Cho’s tenure came during the 2015 NBA Draft. According to ESPN’s Zach Lowe, the Boston Celtics offered the 15th and 16th picks, a future protected first rounder from the Brooklyn Nets and a future first from either the Grizzlies or Timberwolves in exchange for the ninth pick, which Cho used to draft Frank Kaminsky.

“If it was such a no-brainer for us, why would another team want to do it,” Cho asked rhetorically in defense of the Kaminsky selection, according to Lowe.

Years later, it’s evident that the Celtics dodged a bullet when both Charlotte and the Miami HEAT rebuffed its attempts to move up and draft Justise Winslow. The latter has not panned out while Jaylen Brown and Jayson Tatum, the players Boston subsequently selected with Brooklyn’s picks, have developed into starters.

Chris Mannix of Yahoo! Sports reported in the first week of February that Charlotte may target former Lakers GM Mitch Kupchak for a high-ranking role in the organization with Cho’s contract set to expire. Kupchak, like Jordan, is a former UNC star. Kupchak would join Jordan’s UNC teammate and Charlotte assistant GM Buzz Peterson.

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The G-League is a Path Back to the NBA

The G-League has become an avenue for several player types toward the NBA, writes David Yapkowitz.

David Yapkowitz

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When the NBA first instituted their development league, its main purpose was two-fold. The first was to give experience to young players who perhaps were not seeing regular playing time on their respective NBA teams. The second was to give undrafted players a chance at getting exposure and ultimately getting to the NBA.

With the growth in size and popularity of the development league, now known as the G-League, it’s begun to serve another purpose. It’s become a place for older veterans who have already tasted the NBA life to get back to the highest level of basketball that they once knew.

One player in particular who has a wealth of NBA experience is Terrence Jones. Jones is currently playing with the Santa Cruz Warriors, the G-League affiliate of the Golden State Warriors.

Jones was originally drafted by the Houston Rockets with the 18th overall pick in the 2012 draft. He was part of a vaunted class of Kentucky Wildcats that year, which included Anthony Davis, Michael Kidd-Gilchrist, Marquis Teague, Doron Lamb, and Darius Miller. During his four years with the Rockets, he emerged as a dependable reserve and part-time starter. He averaged 9.5 points per game on 49.5 percent shooting and 5.3 rebounds.

“It was just a lot of excitement and a lot of joy, being part of the Houston Rockets was a lot of fun,” Jones told Basketball Insiders. “We had great memories and great seasons, a lot of up and downs, I just enjoyed the journey.”

Jones’ dealt with injuries his last two season in Houston, and when he was a free agent in the summer of 2016, the Rockets didn’t re-sign him. He was scooped by the New Orleans Pelicans, however, and he made an immediate impact for them. Prior to the trade deadline, he played in 51 games for the Pelicans, including 12 starts while putting up 11.5 points on 47.2 percent shooting, and 5.9 rebounds.

When the Pelicans acquired DeMarcus Cousins, however, they cut Jones. He didn’t stay unemployed for long, though, as he was signed by the Milwaukee Bucks to add depth for a playoff run. He was unable to crack the rotation, though, and the Bucks cut him as well before the playoff started. After a brief stint in China, he’s now back stateside and using the G-League to get back to the NBA.

“That’s the goal. Right now, I feel I’ve been playing pretty well and just trying to help my team get wins,” Jones told Basketball Insiders. “I think I can play multiple positions offensively and defensively. Whether that’s creating plays for myself or for others, I think I can help contribute on the offensive end.”

He’s been the second-leading scorer for Santa Cruz with 19.9 points per game. He’s pulling down 7.1 rebounds, and even dishing out 4.5 assists. In the G-League Challenge against the Mexican National Team at All-Star Weekend, he finished with eight points on 50.0 percent shooting, six rebounds, four assists, and two steals. He’s definitely a name to watch for as NBA teams scour the market for 10-day contract possibilities.

Another player who’s had a taste of the NBA is Xavier Silas. Silas is currently with the Northern Arizona Suns, the affiliate of the Phoenix Suns. He went undrafted in 2011 and started his professional career in France. That only last a few months before he came back the United States and latched on with the Philadelphia 76ers.

He played sparingly with the 76ers and was ultimately cut before the start of the 2012-13 season. Since then, he’s played summer league with the Bucks, and been in two different training camps with the Washington Wizards.

“It was amazing, any time you get to go and play at the highest level, and I even got to play in the playoffs and play in the second round and even score, that was big,” Silas told Basketball Insiders. “It was a great time for me and that’s what I’m working towards getting back.”

While his professional career has taken him all across the globe from Israel to Argentina to Greece to Germany and even Ice Cube’s BIG3 league, he sees the G-League as being the one place that will get him back to where he wants to be.

He’s done well this season for Northern Arizona. He’s their third-leading scorer at 19.3 points per game and he’s one of their top three-point threats at 39.9 percent. At the All-Star Weekend G-League Challenge against the Mexican National Team, Silas had a team-high 13 points for Team USA including 3-5 shooting from three-point range.

It’s isn’t just what he brings on the court that Silas believes makes him an attractive candidate for an NBA team. At age 30, he’s one of the older guys in the G-League and one with a lot of basketball experience to be passed down to younger guys.

“I think it’s a little bit of leadership, definitely some shooting. I’m a vet now so I’m able to come in and help in that aspect as well. But everybody needs someone who can hit an open shot and I think I can bring that to a team,” Silas told Basketball Insiders. “I think it’s the best place for anyone who’s trying to make that next step. We’re available and we’re right here, it’s just a call away.”

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NBA Daily: Lillard Playing For Something Bigger

Portland Trail Blazers star Damian Lillard has his eyes set on a bigger prize than just being an NBA All-Star.

Steve Kyler

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Playing For Something Bigger

The NBA All-Star Game is a spectacle.

By design, the game is meant to be a showcase, not just for the players selected to compete, but for the league and all of its partners, on and off the floor. It is easy to get caught up in how players selected actually play, but the reality is while most see the game as important for a lot of reasons, Portland Trail Blazer star Damian Lillard understands it has to be put into perspective.

“I don’t think it’s fair to expect people to go out there and treat it like they are playing for the team they’re under contract for,” Lillard explained this weekend.

“It’s the one time in an 82-game season plus playoffs, preseason and training camp that we actually get a break. It’s necessary to take a mental break, along with a physical break from what we do every day. There’s nothing wrong with that, so I don’t think it’s fair to ask guys to go out there and play like it’s for the Trail Blazers. My loyalty is to my team; I got to stay healthy for my team. I got to do what’s best for my team. Obviously, go out there [during All-Star] and not mess around too much and that’s how people get hurt and stuff like that. You got to go out there and play and have respect for the game, but I don’t think it’s necessary to go out there and go crazy like it’s a playoff game.”

Lillard notched 21 minutes in Sunday’s big game, going 9-for-14 from the field for 21 points for Team Stephen, a roster that included three Golden State Warriors players. Lillard believes that eventually, he’ll get the chance to share the weekend, his third, with teammate C. J. McCollum.

“Each year you see teams are getting two to three, Golden State got four this year,” Lillard said. “But you look at it and say ‘why is that happening’ and it has a lot to do with team success. Me and C.J. just have to take that challenge of making our team win more games. I think when we do that, we’ll be rewarded with both of us making it. If we really want to make that happen, then we’ll do whatever it takes to win more games.

“I feel like this season we’ve moved closer in that direction. In the past, we haven’t even been in the position to get one, because I did not make it the past two years. I think if we keep on improving we’ll eventually get to the point that we’re winning games and people will say ‘how are they doing this’ and then hopefully our names come up. Hopefully, one day, it’ll happen.”

Another issue that got addressed during the All-Star Weekend was the growing tensions between the NBA players and the NBA referees. Representatives from both sides met to address the gap developing on the court, something Lillard felt was necessary.

“We’re all human,” Lillard said. “As competitors, we want to win. If you feel like you got fouled, you want them to call the foul every time. I think sometimes as players, we forget how hard their job can be. At the pace we play, it’s hard to get every call, and then you got guys tricking the referees sometimes, we’re clever too. It’s a tough job for them. I think when we get caught up in our competitive nature, and we forget that they’re not just these robots with stripes, they are people too. You have got to think, as a man if someone comes screaming at you every three plays, you are going to react in your own way. Maybe you’re not going to make the next call; maybe I am going to stand my ground. It’s just something that I think will get better over time. I think both have to do a better job of understanding.”

With 24 games left to play in Lillard’s sixth NBA season, the desire to be more than a playoff team or an All-Star is coming more into focus for Lillard, something he reportedly expressed to Blazers management several weeks ago.

“There are guys that have this record and guys that have done these things, and I want to at least get myself the chance to compete for a championship,” Lillard said. “If I get there and we don’t win it, it happens. A lot of people had to go see about Michael Jordan, a lot of people had to go see about Shaq and Kobe. You know, those great teams, but I have a strong desire to at least give myself a chance to be there. Take a shot at it.”

With All-Star out of the way, the focus in the NBA will switch to the race to the playoffs. As things stand today Lillard and his Blazers hold the seventh seed in the West and are tied with Denver, and just a half of a game back from the five seed Oklahoma City Thunder.

If the Blazers are going to make noise this post season its going to be on the shoulder of Lillard, and based on what he said, it seems he’s up to the challenge.

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