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NBA PM: How Holds, Rights Affect the Cap

Salary cap guru Eric Pincus explains how cap holds and player rights affect an NBA team’s salary cap.

Eric Pincus

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In July, the NBA’s salary cap is expected to jump from the current $70 million to $92 million, dramatically increasing spending power throughout the league.

Most teams will be armed with cap room, but to project how much exactly will take more than just looking at the salaries of players under contract for the 2016-17 season.

A variety of cap holds factor into a team’s salary.  Some can be removed via renouncement, others are set in stone.

Empty Roster Charges

In fact, a team with absolutely no players has 12 cap holds at next season’s rookie minimum of $543,471.  That’s a total of just under $6 million, which would give a team with no players $86 million in space under a $92 million cap.

The logic behind 12 empty roster charges has to do with the regular-season minimum of 13 players on the roster.  The idea is: what is the absolute most available to that 13th player, if everyone else on the roster is making the least a team can possibly spend?

Of course, no teams have zero players this summer, but they will have empty roster charges to reach 12.

Actual Salaries

A players’ salary counts against the cap, with any incentives earned in 2015-16 considered “likely” for 2016-17.  Unlikely incentives do not go against a team’s cap.

The Indiana Pacers have 11 players under contract for next season.  While both Glenn Robinson III and Shayne Whittington are non-guaranteed, their salaries go against the cap unless waived.

The Pacers have $59.3 million in salaries, and one empty roster charge, leaving $32.2 million in space.

Cutting Whittington would reduce the team’s salary by $980,431, less than an empty roster charge ($543,471) – giving the Pacers just an extra $436,960 in cap space.

First-Round Salary Scale

The Indiana example is not entirely complete.  The team also holds the No. 20 overall pick in the 2016 NBA Draft.

Until a first-rounder is signed, their base salary, as defined in the Collective Bargaining Agreement, is their cap hold for the team.

In most cases, first rounders will sign for the maximum of 120 percent of their scale salary.  Once they do sign, that becomes their cap number.

For the Pacers, their pick has a cap hold of $1.3 million, which takes the place of the aforementioned empty roster charge.

Instead, with 11 rostered players and the draft pick, Indiana has $61.1 million in salary with $31.4 million in cap space.

If a drafted player agrees not to sign for the entire season, in writing, that cap hold can be removed from the books.  The pick can also be renounced outright (an extremely rare occurrence in the first round).

Unsigned second-round picks do not take up any cap space.  In fact, they can be signed at the rookie minimum in place of empty roster charges, without reducing cap room.

Exceptions

Teams over the cap can use a variety of exceptions including the Mid-Level ($5.6 million for 2016-17), Bi-Annual ($2.2 million) and any Trade or Disabled Player Exceptions that may have been generated.

Teams can renounce their exceptions or elect to hold onto them to stay over the cap, although they automatically evaporate if the team is unable to reach the salary cap.

With the Pacers, if they would add the Mid-Level and Bi-Annual to their cap figure, it would take the place of any empty roster charges.

The revised total would be $68.4 million in salary.  Since the team would still be $23.6 million under the cap, the exceptions would automatically expire.

Before they do, free agent cap holds needs to be added to the puzzle.

Free Agents

Teams can spend up to the salary cap but they can also go over the to re-sign their own players.

To do so, the team must account for their own free agent with a cap hold – the number based on their previous year’s salary and the players’ rights.

Players with Non-Bird Rights, after one season with their team, have a cap hold of 120 percent of their previous salary – the maximum a team can pay without using either cap room or an additional exception.

Should Arron Afflalo opt out his contract with the New York Knicks, his cap hold will be $9.6 million – 120 percent of his $8 million salary.

For Early Bird Rights, after two seasons, the cap hold formula is 130 percent.  Players can sign up to 175 percent of their previous salary, or 104.5 percent of the league’s average salary (the exact figure won’t be computed until the end of the July moratorium).

Marvin Williams’ Early Bird cap hold with the Charlotte Hornets, based on his $7 million salary, is $9.1 million.

Full Bird Rights are more complex.  While players can be paid up to the maximum (with the amount determined by years of service), their cap hold is based on the “estimated” average salary, which is currently set at $5.7 million.

Additionally, first-round picks coming off their first contract are treated differently than other free agents.

For first-rounders, if they earned less than the estimated average salary, their cap hold is 250 percent of their previous salary.

Bradley Beal of the Washington Wizards had a salary of $5.69 million for 2015-16.  His cap hold this summer is $14.2 million.

If a first-rounder earned the estimated average salary or higher, their cap hold is 200 percent of their previous salary.  No one in the 2012 draft class fits this criterion this past summer. Had Beal earned an additional $44,326 last season, he would have reached the estimated average salary, and his cap hold would have shrunk to roughly $11.5 million.

For players with Bird Rights, who are not first-round picks coming off their first contracts, the percentages are 190 percent for those below the estimated average salary and 150 percent for those above.

Al Horford’s cap hold, with the Atlanta Hawks, will be $18 million – 150 percent of his $12 million earned last season.

Courtney Lee’s cap hold, with the Charlotte Hornets, will be $10.8 million – 190 percent of his $5.7 million earned last season.

Rights transfer via trade, in most cases.  A player’s cap hold will not be more than the maximum salary for the coming season.

A player on a minimum contract works differently; their cap hold is the minimum whether they have Non-Bird, Early Bird or Full Bird rights.

Once that player re-inks, their actual salary is their cap hold; if they are renounced, or leave for another team, their hold comes off completely.

As if it wasn’t already complex, there are other caveats, like declined first-round options, non-first round restricted free agents, and starter criteria that add further wrinkles to computing a players’ cap hold.

Pacers forward Solomon Hill’s option was declined, making his cap hold the $2.3 million he would have made had the team taken the option.

Undrafted Miami HEAT guard Tyler Johnson has a cap hold of $1.2 million, provided Miami makes him restricted with a qualifying offer before July.

Los Angeles Lakers guard Jordan Clarkson will have a $2.7 million cap hold once he receives a qualifying offer – based on the number of games he started, and minutes played, last season.

Until a team renounces a players’ rights, they have a cap hold.  The Oklahoma City Thunder still have a cap hold for Derek Fisher at a minimum salary of $980,431 for next season.  Renouncing is strictly a clerical task, but by and large, teams don’t take that step until necessary.

Waived Players

The Los Angeles Clippers previously waived and stretched out the salaries of Carlos Delfino, Jordan Farmar and Miroslav Raduljica.

Combined, the team’s trio of former players will take up $1.4 million in cap space.

Example: Pacers’ Cap Position

At the last tally, the Pacers had $68.4 million in salary, including the Mid-Level and Bi-Annual Exceptions.

Indiana also has Non-Bird rights on Jordan Hill, who earned $4 million last season, yielding a cap hold of $4.8 million.

Ian Mahinmi also made $4 million, but with Bird Rights, his cap hold is $7.6 million.

Ty Lawson’s hold is just the minimum at $980,431.  Solomon Hill’s cap hold was previously listed as $2.3 million.

All-inclusive, the Pacers reach just $84.1 million in team salary, which is $7.9 million below the cap.  Since the team is under, they will lose their Mid-Level and Bi-Annual Exceptions, reducing their total to $76.2 million with $15.8 million in spending power.

Indiana can max out their space by waving Robinson and Whittington, while also renouncing their free agents.  The team can also look to draft a player who agrees to stay overseas for a year.

If so, the Pacers would have nine players with three empty roster charges of $543,471 each, $58.9 million in team salary and $33.1 million in cap room.

Perhaps more realistically, the team might keep Robinson, Whittington, along with Mahinmi’s cap hold and will draft a player at No. 20 to join the team immediately.

That combination would give the Pacers $23.8 million in cap space, slightly under the projected maximum ($25.9 million) for players with seven-to-nine years of NBA experience (like guard Memphis Grizzlies guard Mike Conley).

Waiving Robinson and Whittington pushes that space up to $25.3 million, but the Pacers wouldn’t have to make those decisions until they actually have a free agent commitment that requires additional space.

The Pacers can also look to make trades to open up more spending power.  Player buyouts can also be an option.

Should Indiana find a taker for what could be roughly $25 million in spending power, they would then have the ability to go over the cap to re-sign Mahinmi to a contract starting above his $7.6 million cap hold.

Finally, once teams like the Pacers go over the cap, they gain the $2.9 million Room Exception to sign player(s) for a maximum of two seasons.

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Reviewing the Nurkic Trade: Denver’s Perspective

The Denver Nuggets have been on a miraculous run this postseason, but that doesn’t mean that they’re infallible. Drew Maresca reviews the 2017 trade that sent Jusuf Nurkic from Denver to Portland.

Drew Maresca

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The Denver Nuggets are fresh off of a 114-106 win over the Los Angeles Lakers in the Western Conference Finals, pulling within three wins of the franchise’s first trip to the NBA Finals. But what if I told you that the Nuggets’ roster could be even more talented by acting more deliberately in a trade from three years ago?

While Denver won on Tuesday night, they lost a nail bitter on Sunday – for which most of the blame has been pointed at a defensive breakdown by Nuggets’ center Mason Plumlee, who was procured in the aforementioned 2017 trade. What did it cost Denver, you ask? Just Jusuf Nurkic and a first-round pick.

Nurkic was a 2014-15 All-Rookie second team member. He played 139 games over 2.5 seasons in Denver, averaging 7.5 points and 5.9 rebounds in approximately 18 minutes per game. He showed serious promise, but Denver had numerous reasons to pursue a trade: he’d suffered a few relatively serious injuries early in his career (and he’s continued to be injury-prone in Portland), butted heads with head coach Michael Malone and – most importantly – the Nuggets stumbled on to Nikola Jokic.

The Nuggets eventually attempted a twin-tower strategy with both in the starting line-up, but that experiment was short-lived — with Jokic ultimately asking to move to the team’s second unit.

The Nuggets traded Nurkic to the Portland Trail Blazers in February 2017 (along with a first-round pick) in exchange for Plumlee, a second-round pick and cash considerations. Ironically, the first-round pick included in the deal became Justin Jackson, who was used to procure another center, Zach Collins – but more on that in a bit.

As of February 2017, Plumlee was considered the better player of the two. He was averaging a career-high 11 points, 8.1 rebounds and 4.0 assists through 54 games – but it was clear that at 27, he’d already maximized his talent.

Conversely, Nurkic was only 23 at the time of the trade with significant, untapped upside. In his first few seasons with Portland, Nurkic averaged 15 points and 9.8 rebounds per game, while establishing himself as a rising star. As noted above, injuries have continued to be a problem. Nurkic suffered a compound fracture in his tibia and fibula in March 2019, forcing him to miss a majority of this current campaign. The COVID-19-related play stoppage in March gave Nurkic extra time to get his body right, and he returned to action in July inside the bubble.

And he did so with a vengeance. Nurkic demonstrated superior strength and footwork, and he flashed the dominance that Portland hoped he would develop, posting eight double-doubles in 18 contests. He averaged 17.6 points and 10.3 rebounds per game and while his play dipped a bit in the playoffs – partially due to a matchup with first-team All-NBA star Anthony Davis – he still managed 14.2 points and 10.4 rebounds in the five-game series. So it’s fair to say that Nurkic is still on his way toward stardom.

But the Nuggets are in the conference finals – so all’s well that ends well, right? Not so fast. To his credit, Plumlee is exactly who Denver expected him to be. He’s averaged 7.5 points and 5.5 rebounds per game in three seasons with Denver since 2017 – but to be fair, Plumlee is asked to do less in Denver than he had in Portland. Still, it’s fairly obvious that they’re just not that comparable.

Plumlee is a good passer and an above-average defender that’ll compete hard and isn’t afraid to get dirty – but he has limitations. He doesn’t stretch the floor and he is a sub-par free throw shooter (53.5 percent in 2019-20). More importantly, he’s simply not a major offensive threat and his repertoire of moves is limited.

High-level takeaway: Defenses tend to game plan for opponents they view as major threats – Nurkic falls into this category. Other guys pack the stat sheet through putback attempts, open looks and single coverage alongside the guys for whom opposing defenses game plan – that’s a more appropriate description of Plumlee.

On to the wrench thrown in by Zach Collins’ involvement. Statistically, Collins is about as effective as Plumlee – he averaged 7 points and 6.3 rebounds through only 11 games in 2019-20 due to various injuries – and he possesses more upside. The 22-year-old is not as reliable as Plumlee but given his age and skill set, he’s a far better option as a support player playing off the bench. He stretches the floor (36.8 percent on three-point attempts in 2019-20), is an above-average free throw shooter (75 percent this season) and is a good defender. Looking past Nurkic for a moment, would the Nuggets prefer a 22-year-old center that stretches the floor and defends or a 30-year-old energy guy?

Regardless of your answer to that question, it’s hard to argue that Nurkic should have returned more than Plumlee, definitely so when you factor in the first-round pick Denver included. There is obviously more at play: Denver was probably considering trading Nurkic for some time before they acted – did they feel that they could increase his trade value prior to the trade deadline in 2016-17? Maybe. Further, Nurkic and his agent could have influenced the Nuggets’ decision at the 2017 deadline, threatening to stonewall Denver in negotiations.

Had Nurkic been more patient or the Nuggets acted sooner before it became abundantly clear that he was on the move, Denver’s roster could be even more stacked than it is now. Ultimately, the Nuggets have a plethora of talent and will be fine – while it appears that Nurkic found a long-term home in Portland, where he owns the paint offensively. Denver can’t be thrilled about assisting a division rival, but they’re still in an enviable position today and should be for years to come.

But despite that, this deal should go down as a cautionary tale – it’s not only the bottom feeders of the league who make missteps. Even the savviest of front offices overthink deals. Sometimes that works in their favor, and other times it does not.

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NBA Daily: They Guessed Wrong

Matt John reflects on some of the key decisions that were made last summer, and how their disappointing results hurt both team outlooks and players’ legacies.

Matt John

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It doesn’t sound possible, but did you know that the crazy NBA summer of 2019 was, in fact, over a year ago? Wildly, in any normal, non-pandemic season, it all would have been over three months ago and, usually, media days would be right around the corner, but not this time. The 2019-20 NBA season is slated to end sometime in early to mid-October, so the fact that the last NBA off-season was over a year ago hasn’t really dawned on anyone yet. Craziest of all, even though there will still be an offseason, there technically won’t be any summer.

Coronavirus has really messed up the NBA’s order. Of course, there are much worse horrors that COVID-19 has inflicted upon the world – but because of what it’s done to the NBA, let’s focus on that and go back to the summer of 2019. It felt like an eternity, but the Golden State Warriors’ three-year reign had finally reached its end. The Toronto Raptors’ victory over the tyranny that was the Hamptons Five – as battered as they were – made it feel like order had been restored to the NBA. There was more to it than that though.

Klay Thompson’s and Kevin Durant’s season-ending injuries, along with the latter skipping town to join Kyrie Irving in Brooklyn meant two things.

1. Golden State was down for the count
2. Brooklyn’s time wasn’t coming until next year.

A one-year window was open. Even if neither Golden State nor Brooklyn posed the same threat that the former did when it had Kevin Durant, those were two contenders out of commission. If there was a time to go all in, it was in 2019.

Milwaukee certainly seemed to go all in. For the most part.  Malcolm Brogdon’s departure seemed a little odd since he was arguably their best non-Giannis playmaker when they were in crunch time. Not to mention there was nothing really stopping the Bucks from keeping him except for money. Detractors will call out Milwaukee for electing to cheap out by not keeping Brogdon and hence, avoiding the luxury tax. However, there’s more to it than that.

Milwaukee thought it had enough with the core it had on its roster. Coming off the best season they had put up since the eighties, they believed the franchise built the right team to contend. There was an argument that keeping Brogdon may have been overkill with their guard depth – let’s not forget that Donte DiVincenzo did a solid job in Brogdon’s role as the backup facilitator. This would have been more defensible had it not been for Milwaukee picking the wrong guy to let go. That was the indefensible part- electing to keep Eric Bledsoe over Brogdon.

Bledsoe wasn’t necessarily a bad investment. No one’s complaining about an almost 15 point average on 47/34/79 splits or playing individual defense tight enough to get named on the All-Defensive second team. By all accounts, Bledsoe earns his keep. That is until the playoffs. Bledsoe’s postseason woes have been a weight ever since he first entered Milwaukee, and this postseason was more of the same.

Bledsoe’s numbers dwindled to just 11.7 points on 39/25/81 splits, and Milwaukee getting ousted in five games at the hands of Miami made his struggles stand out even more than it had ever been. Bledsoe may be the better athlete and the better defender, but Brogdon’s all-around offensive savvy and his only slight dropoff defensively from Brogdon would have made him a bit more reliable.

Milwaukee guessed wrong when they opted to extend Bledsoe before the postseason last year when they could have waited until that very time to evaluate who to keep around. Now they face a hell of a lot more questions than they did at the end of last season – questions that may have been avoided had they made the right choice.

Now they could have kept both of them, yes, but it’s not totally unreasonable to think that maybe their approach with the luxury tax would have worked and maybe they would still be in the postseason right now had they gone with the homegrown talent. And just maybe, there wouldn’t be nearly as much of this Greek Freak uncertainty.

The Houston Rockets can relate. They got bruised up by a team that everyone thought Houston had the edge on going into the series and then crushed by the Lakers. Now, Mike D’Antoni is gone. The full-time small ball experiment likely did not work out. Since the Rockets emptied most of their assets to bring in Russell Westbrook and Robert Covington, there may not be a route in which they can become better than they presently are.

The mistake wasn’t trading for Russell Westbrook. The mistake was trading Chris Paul.

To be fair, most everybody severely overestimated Chris Paul’s decline. He’s not among the best of the best anymore, but he’s still pretty darn close. He deserved his All-NBA second team selection as well as finishing No. 7 overall in MVP voting. OKC had no business being as good as they were this season, and Paul was the driving force as to why.

For all we know, the previously-assumed tension between Chris Paul and James Harden would have made its way onto the court no matter what. Even so, Houston’s biggest obstacle in the Bay Area had crumbled. If they had just stayed the course, maybe they’re still in the postseason too.

To their credit, none of this may have happened had it not been for the Kawhi Leonard decision. Had he chosen differently, the Thunder never blow it up, and Houston might have very well been the favorite in the Western Conference. Instead, the Rockets took a step back from being in the title discussion to dark horse. But at least they can take pride knowing that they weren’t expected to win it all – the Clippers can’t.

Seeing the Clippers fall well short expectations begs the question if they too got it wrong. The answer is, naturally: of course not. They may have paid a hefty price for Paul George, but the only way they were getting Kawhi Leonard – one of the best players of his generation – was if PG-13 came in the package. As lofty as it was, anyone would have done the same thing if they were in their shoes. They didn’t get it wrong. Kawhi did.

On paper, the Clippers had the most talented roster in the entire league. It seemed like they had every hole filled imaginable. Surrounding Leonard and George was three-point shooting, versatility, a productive second unit, an experienced coach – you name it. There was nothing stopping them from breaking the franchise’s long-lasting curse. Except themselves.

Something felt off about them. They alienated opponents. They alienated each other. At times, they played rather lackadaisically, like the title had already been signed, sealed, and delivered to them. The media all assumed they’d cut the malarkey and get their act together – but that moment never really came. They had their chances to put Denver away, but even if they had, after seeing their struggles to beat them – and to be fair Dallas too – would their day of destiny with the Lakers have really lived up to the hype?

Even if it was never in the cards, one can’t help but wonder what could have happened had Kawhi chosen to stay with the team he won his second title with.

Toronto was the most impressive team in this league this season. They still managed to stay at the top of the east in spite of losing an all-timer like Leonard. That team had every component of a winner except a superstar. They had the right culture for a championship team. Just not the right talent. The Clippers were the exact opposite. They had the right talent for a championship team but not the right culture. That’s why the Raptors walked away from the postseason feeling proud of themselves for playing to their full potential while the Clippers writhed in disappointment and angst over their future.

In the end, everyone mentioned here may ultimately blame what happened to their season on the extenuating circumstances from the pandemic. The Bucks’ chemistry never fully returned when the Bubble started. Contracting COVID and dealing with quad problems prevented Westbrook from reviving the MVP-type player he was before the hiatus. As troubling as the Clippers had played, the extra time they would have had to work things out in a normal season was taken away from them.

For all we know, next year will be a completely different story. The Rockets, Bucks, and Kawhi may ultimately have their faith rewarded for what they did in the summer of 2019 – but that will only be mere speculation until the trio can change the story.

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Looking Toward The Draft: Power Forwards

Basketball Insiders continues their NBA Draft watch, this time with the power forwards.

David Yapkowitz

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We got some updated NBA draft news this week when the league announced that several key dates have been pushed back including the draft, the start of free agency and the beginning of the 2020-21 season.

The 2020 draft was originally scheduled for Oct. 16, but it will now likely occur sometime in November. Obviously, with the COVID-19 pandemic still wildly out of control in the United States, all of these potential deadlines are fluid and subject to change.

With that said, we’re continuing our position by position breakdown here at Basketball Insiders of some of the top 2020 draft prospects. We looked at the point guards and shooting guards last week, and this week we’re covering the small forwards and power forwards.

The power forward crop, like the draft overall, doesn’t appear to be as strong as recent years, that doesn’t mean there aren’t potential contributors and high-level NBA players available, as well as one who might just turn out to be a star-caliber player.

Onyeka Okongwu, USC – 19 years old

Okongwu is the player who just might develop into a star on some level. He was actually underrated in high school and was snubbed for a McDonald’s All-American selection his senior year. He established himself early on at USC as the team’s best player as a freshman and now appears to have turned some heads.

He’s been mentioned as a lottery pick and in some mock drafts, he’s top 4-5. He possesses a great all-around skill-set; he can score in the post, he can put the ball on the floor and attack and he can shoot. But perhaps his biggest attribute is his versatility on the defensive end. He’s got quick feet and mobility and can guard multiple positions.

Okongwu might actually play center in the NBA, especially in small-ball lineups, but he’s mostly played power forward and so he’ll probably see time there in the league. His skill-set fits perfectly with today’s game.

Obi Toppin, Dayton – 22 years old

Toppin is one of the older players in the draft, and in recent history, players that age tend to slip on draft boards. In Toppin’s case, it looks like the reverse might actually be true. He’s been projected as a lottery pick, and even going in the top 3.

He’s an incredibly athletic player who thrives in the open court. He looks like he’ll do well in an up-tempo offensive system that has capable playmakers who can find him in transition. He’s extremely active around the rim and he can finish strong. A decent shooter too, something he’ll need at the next level.

Toppin has the physical tools to be an effective defensive player, but that’s where the questions marks on him have been. In the NBA, he’s likely going to have to play and guard multiple positions. Whether or not he can adapt to that likely will answer the question as to what his ceiling can be.

Precious Achiuwa, Memphis – 20 years old

Achiuwa is another intriguing prospect. this writer actually got to watch him play in person while he was in high school and he was very impressive. He looked like a man among boys. He’s projected to be a late lottery pick.

He has an NBA-ready body and he’s got some toughness around the rim and in the paint. He was a double-double threat during his one season at Memphis and his knack for rebounding is something that should translate to the NBA. He’s a very good defender too, in particular, as a rim protector. He’s very quick and has the ability to guard multiple positions.

One of the main knocks on Achiuwa is his shooting ability. He didn’t shoot that well in college and power forwards being able to space the floor is almost a requirement in today’s NBA game. It’s something he can certainly work on and improve on though.

Honorable Mentions:
Paul Reed, DePaul – 21 years old
Xavier Tillman, Michigan State – 21 years old
Killian Tillie, Gonzaga – 22 years old

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