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NBA AM: Knicks Could Have $34.1 Million In Capspace

The fall out from yesterday’s three-team trade leaves the Knicks with tons of flexibility.

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The Bank Of Phil Soon To Open:  The New York Knicks did a little house cleaning yesterday, taking part in a three-team trade that sent J.R. Smith and Iman Shumpert to the Cleveland Cavaliers in exchange for the non-guaranteed contracts of Lou Amundson and Alex Kirk. The Cavaliers sent guard Dion Waiters to the Thunder for Lance Thomas, who was conveyed to the Knicks. The Cavaliers also received a protected first-round draft pick in 2015 from the Thunder, while the Cavaliers sent a 2019 second-round pick to the Knicks.

For the Knicks this move was 100 percent about dumping the contract of Smith, who has a player option worth $6.39 million for next season.

The Knicks are also expected to waive center Samuel Dalembert to avoid paying his full $4.05 million salary.

Both moves will get multiplied in terms of luxury tax savings.

Prior to the trade the Knicks were $12.68 million over the tax line and due to their status as a “repeater tax payer” they were looking at a tax bill of $35.632 million. After the trade the Knicks are just $4.35 million over the tax line, shaving their tax bill down to $10.879 million assuming they do not waive any of the players they acquired yesterday. That’s a tax savings of $24.753 million, plus $8.33 million in reduced salary cost.

The Knicks do have an avenue to get completely under the luxury tax by waiving all of their non-guaranteed contracts and finding someone to absorb the contract of big man Jason Smith ($3.278 million).

All in the Knicks trimmed $33.083 million off their total payroll cost in these transactions.

As things stand today the Knicks have just four guaranteed contracts on the books for next season: Carmelo Anthony ($22.875 million), Jose Calderon ($7.097 million), Tim Hardaway Jr ($1.304 million) and Cleanthony Early ($845,059). All in the Knicks have just $32.121 million in cap commitments heading into July where the 2015 salary cap is projected to be in the neighborhood of $66.3 million. Said another way, the Knicks are looking at roughly $34.1 million in usable cap space next summer depending on how they manage their cap holds.

Teams are charged a cap place holder of $490,000 for each empty roster spot as an “incomplete roster charge”, so the Knicks may have more work to do, to maximize all their possible space.

The Knicks could increase that number slightly if they can find a trade for Calderon and the remaining two years and $15.11 million on his contract.

The Knicks have two large expiring contracts: Amar’e Stoudemire ($23.410 million) and Andrea Bargnani ($11.50 million) along with an attractive young guy like Shane Larkin ($1.606 million) to try and sweeten a deal.

The Knicks now find themselves with what looks to be almost two full maximum salary slots going into the offseason, depending on the experience of the free agents. Players who have been in the NBA less than seven years qualify for 25 percent of the salary cap, which against a $66.3 million cap is a starting salary of $16.575 million.

With the space the Knicks are looking at they can make bona fide free agent offers to a talent pool that likely looks like this and could reasonably walk away with at least two of them:

Rajon Rondo (Dallas), Brandon Knight (Milwaukee), Reggie Jackson (Oklahoma City), Goran Dragic (Phoenix), Lou Williams (Toronto), Monta Ellis (Dallas), Arron Afflalo (Denver), Wesley Matthews (Portland), Jeff Green (Boston), Luol Deng (Miami), Jimmy Butler (Chicago), Draymond Green (Golden State), Tobias Harris (Orlando), Kawhi Leonard (San Antonio), Greg Monroe (Detroit), David West (Indiana), Kevin Love (Cleveland), Paul Millsap (Atlanta), LaMarcus Aldridge (Portland), Brook Lopez (Brooklyn), Roy Hibbert (Indiana), DeAndre Jordan (LA Clippers), Al Jefferson (Charlotte) and Marc Gasol (Memphis).

There has been some discussion about the high profile would-be restricted free agents like Butler, Harris and Leonard and what team would put the expected max offer sheet on the table. The Knicks now looked primed to be one of those teams.

Sources close to the thinking in New York peg the Knicks as a likely suitor for both Harris and Butler, with a belief that the Knicks would indeed offer max money to Butler, with Harris viewed as a secondary option.

There has been a long running narrative that the Knicks have an eye for Gasol, however sources near Gasol in Memphis say beyond a cursory exploration of free agency his mindset is to re-sign with the Grizzlies.

Another interesting wrinkle for the Knicks is that not only will they have $34.1 million to play with in July; the 2016 NBA salary cap is expected to climb to a number north of $80 million when the NBA’s new TV rights deal kicks in.

Some projections estimate that the 2016 cap could go as high as $82-$85 million, meaning the Knicks could gain an additional $15 to $18 million in space if they keep themselves at or near the expected 2015 cap.

The Knicks are currently 5-32, giving them the worst record in the NBA and a 25 percent shot at the top overall pick in the 2015 NBA draft. That salary, as much as $4.753 million will bite into the Knicks’ cap space slightly, but will also afford them an additional high level talent before they enter free agency.

The NBA trade deadline in February 19 at 3pm EST, so the Knicks still have almost 44 days to make additional moves and given where they find themselves on the season that’s remains a big possibility.

The Cavs Rolling The Dice:  The Cavaliers were pretty clear they wanted to make a trade. Cavaliers General Manager David Griffin told reporters on Sunday that his team was being aggressive and was actively trying to shake loose a trade, however this likely wasn’t what fans were expecting. The Cavs have been incredibly thin in the front court and are lacking a rim defender; the belief was the Cavs were shopping for a big man. So, last night’s deal that brought in two guards was somewhat of a shocker.

Griffin said Sunday that he felt his team needed to address its depth at guard and that was accomplished last night, but it also brought in a solid on-ball defender in Shumpert and a proven sixth man in Smith to anchor a bench that has been less than productive.

Through 35 games the Cavs bench is producing just 25.6 points per game, that’s 27th worst in the NBA. The bench assist production is just 5.3 per game, that’s 29th worst in the league, while the most damaging stat is the bench differential a -14.3, which is the worst in the NBA.

It was clear the Cavs needed to address their bench and did so yesterday.

The exit of Dion Waiters was not at all surprising. He was the proverbial square peg in a round hole. Griffin had grown to like Waiters and spent a lot of time personally trying to get Waiters to buy into the Cavs’ program, but ultimately Waiters was the chip the team needed to cash in to bolster the roster.

The Cavaliers are not finished by any leap of the imagination; they are still working the phones trying to shake loose a big man.

There have been reports all season long that the Cavs covet Nuggets big man Timofey Mozgov, and have been dangling a draft pick at the Nuggets in exchange for the seven footer from Russia.

Mozgov is an interesting option for the Cavs not just because of his size; he also was coached by Cavs head coach David Blatt while Mozgov was part of the Russian National team during the 2012 Olympics.

Cavs have not limited their focus to just Mosgov, they have been at roughly every team in the NBA with a center not logging major minutes.

So while last night’s trade wasn’t the big man the Cavs have been shopping for, it did shore up the other areas of concern for the Cavs, namely at backup guard. It also ended the daily speculation of when Waiters would be traded.

The Cavaliers still have their $5.285 million Traded Player Exception from the Keith Bogans trade and still have the contract of Brendan Haywood to shop along with several draft picks they have collected up to this point.

The Thunder Got Their Man:  The Oklahoma City Thunder were one of the teams with eyes for Dion Waiters in the 2012 NBA Draft.

Waiters ended up going fourth overall in that draft after pulling out of the Draft Combine and shutting down workouts. Waiters received a verbal guarantee from the Phoenix Suns just prior to the combine, prompting him to turn around and get right back on a plane after landing in Chicago.

The Thunder were believed to have been equally high on Waiters and had explored scenarios where they would trade up had he fallen into the right range. The Cavs scooped him up with the fourth pick, ending the Thunder’s pursuit, but yesterday’s deal presented the opportunity for the Thunder to get a guy they have had eyes on for a while.

The Thunder sent out the non-guaranteed contract of Lance Thomas, a player they really liked and a protected first round draft pick, which landed in Cleveland. That pick is protected 1-18 this year, and 1-15 in 2016 and 2017. If the Thunder has not conveyed the pick to the Cavaliers by 2018, they will owe the Cavs a 2018 second-round pick and a 2019 second-round pick.

If the season ended today the Thunder would keep the pick, however if they can get themselves in the playoff picture in the West the pick should be conveyed to the Cavaliers this year.

As for the Thunder, they hope they have gotten the impact bench player they have been searching for.

Thunder star Kevin Durant was asked about the deal after the game last night, and he expressed a lot of excitement about the addition of Waiters.

“I’m excited about bringing Dion aboard,” Durant said. “A guy that has a lot of toughness, being from the East Coast. I know a lot about Philadelphia, South Philly, where he comes from. Those guys are tough and they play with an edge. And that’s what we need here.

“We’re going to make him feel wanted. I don’t think he felt that the last couple years. He’s going to fit in well. He’s going to get comfortable real quick. It’s on the leaders — Russell, myself, Nick — to make him feel at home and feel special and let him play his game.”

It did not take long for people to make the James Harden comparison, given the role the Waiters is expected to play for the Thunder. However, Durant was quick to defuse the Harden comparison.

“I’m not saying he’s James’ replacement, we’re far past that,” Durant said. “But, yeah, he can play, can come off the bench for us and score and make plays. He’s a really good player, man. A lot of people take him for granted, I think. Because he’s been around and you hear different things about him that’s not true. But he can play basketball. So he just needs to come out here and be himself, be aggressive and make plays.”

Waiters is expected to be in Oklahoma City today for his physical, with the hope that all players involved in the trade clear their physicals in time for Waiters to suit up for Wednesday game versus the Sacramento Kings.

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Steve Kyler is the Editor and Publisher of Basketball Insiders and has covered the NBA and basketball for the last 17 seasons.

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