Could Be A Tough Restricted Market
Last summer was a little brutal to some of the guys that bet on themselves and for teams that rolled the dice on restricted free agency. Most early cap projections have the 2018-19 NBA Salary cap increasing slightly from the $99.093 million it landed at this season to just around $101 million.
While the NBA is doing better than it ever has in the revenue department, the salary cap system is simply a mechanism to ensure the players, as a group, receive the agreed 49-51 percent of total Basketball Related Income. Part of the calculation to reach the cap figure is based on what’s already owed to players in salaries and benefits. Because NBA teams spent like drunken sailors when the salary cap exploded two seasons ago, the cap isn’t jumping up nearly as much as some expected when all the new television rights revenue started to pour in.
The end result is after two years of aggressive spending, most teams will be either over the cap or in some cases way over the luxury tax line before free agency even opens.
This will have an impact on the marketplace, especially for players hoping for a whopper of an offer sheet in restricted free agency.
Current cap projections peg the Atlanta Hawks, Brooklyn Nets, Chicago Bulls, Dallas Mavericks, LA Lakers, Philadelphia 76ers, Phoenix Suns and possibly the Indiana Pacers as having meaningful cap space.
While they say it only takes one team to set a market, having so few teams with meaningful cap space could make for a tough summer.
It is important to point out that restricted free agency is a multi-step process which starts with the issuance of a qualifying offer. A player does not have to accept the offer, and the team can, at any point, pull that offer making the player unrestricted.
All pending restricted free agent players have two values to keep in mind – the qualifying offer value and a cap hold value. Cap holds are in essence cap placeholders which take up a fixed and defined amount of cap space. While teams can exceed the cap to re-sign their own players, there is always a placeholder on the cap until a new deal is reached or the team renounces that player.
Here are some of the notable pending restricted free agents and what we know today:
Jabari Parker – Milwaukee Bucks
[$8.85m Qualifying Offer – $20.3m Cap Hold]
The Milwaukee Bucks entertained a number of offers on Parker at the trade deadline and at least seriously considering moving him. This is actually really common for teams that may be struggling to understand a player’s worth on the market.
Given Parker’s knee issues the balance of the season will be important for setting a real price on Parker.
Most NBA insiders believe the Bucks are not only going to pay Parker, but they may not force him to play out of the Offer Sheet game.
The Bucks are going to be way over the salary cap, so there is zero reason not to retain Parker on a new deal, simply because they won’t get below the salary cap line with or without a new Parker deal, so in essence any money paid to Parker is money that’s only available to Parker and no one else.
There are Luxury Tax concerns, and that would be meaningful for a smaller revenue market like Milwaukee, but with a brand-new area ready to come online, the word is Bucks ownership isn’t worried about the cost of the roster.
Aaron Gordon – Orlando Magic
[$7.26m Qualifying Offer – $16.51m Cap Hold]
Like Parker, the odds that Aaron Gordon is not re-signed in Orlando is pretty small; however, unlike Parker, the Magic may let the market drive the value of the next deal.
That’s not a reflection on how management views Gordon, simply that they are trying to shed cap dollars and get themselves right sided on a number of fronts and overpaying for Gordon is a concern.
The Magic are a team in transition, and there has been a growing sense that if Gordon did not want to come back, they might be open to a sign and trade, especially if the NBA draft yields a better fitting cornerstone player.
Like Parker, the Magic are going to be over the cap in a significant way, so money paid to Gordon is only available to him, and he would become tradable in January.
There is a scenario in which someone tries to poach Gordon with a max. level offer, but even then, the Magic would be smarter to match a deal unless it’s loaded with unfavorable terms to the Magic’s rebuild plan.
Dante Exum – Utah Jazz
[$6.61m Qualifying Offer – $14.97m Cap Hold]
Injuries have derailed Dante Exum’s NBA career, but there is a window this season for him to establish something of a market value in Utah with the team’s push toward the playoffs.
Unfortunately for Exum, he hasn’t done enough to live up to his draft hype, and he may be a player that takes the qualifying offer. In his case, one more year in Utah at $6.61 million, and the ability to veto any trades might be smarter than trying to find a deal that doesn’t tie him into a lower dollar deal.
The prevailing thought is the Exum will be back in Utah, but it would take something pretty spectacular to think its on a new long-term deal.
Marcus Smart – Boston Celtics
[$6.05m Qualifying Offer – $13.61m Cap Hold]
The Boston Celtics had numerous offers for Smart at the trade deadline and opted to hang on to him. That bodes well for him staying in Boston beyond this season; the question becomes does another team test Boston’s taste for luxury tax?
Smart seems to be a player that will get offers; the question is will anyone offer more than the $13.6 million cap hold?
It is going to be hard to pry Smart out of Boston at value—it’s going to take an offer sheet that’s more than Boston will match, which means something in the $12-$14 million per year range on a multi-year deal.
With Celtics guard Kyrie Irving’s future a little uncertain (Irving is eligible for a contract extension this summer) would the Celtics be wise to let Smart leave before getting an answer from Irving?
If there is a player on the list that reasonably could be elsewhere next season, it might be Smart, but that seems far from certain.
Julius Randle – Los Angeles Lakers
[$5.56m Qualifying Offer – $12.44m Cap Hold]
Randle’s future is squarely tied to the Lakers pursuit of marquee free agents. While there is little doubt Randle has emerged as a promising young star, the Lakers are going to have a hard time clearing the necessary cap space to pursue two max-level free agents and hang onto Randle’s Bird Rights.
While Randle’s $5.56m qualifying offer is an easy number for the Lakers, it’s his $12.44 million cap hold that handicaps things. Unless the Lakers can find a way to jettison the lingering contract of forward Luol Deng without taking anything meaningful back against the cap, it’s going to be nearly impossible to get to two max slots and retain Randle.
There are scenarios where it becomes possible to add players and retain Randle; it would simply require the added player to not receive max level money.
The danger for the Lakers is that there appear to be two early suitors for Randle that may force the Lakers’ hand. The Dallas Mavericks have had an eye on Randle for some time and is the team most expect to be on Randle’s doorstep at 12:01 am on July 1.
Another team to watch is the Sacramento Kings. After dumping George Hill’s contract off on the Cavaliers, the Kings could have some cap money, and Randle is a name linked to them as well.
The easy answer for the Lakers is to simply lock Randle up early, which means the front office will have to ask for quick decisions from would-be free agents before another team puts an offer in front of Randle he is willing to sign and start the clock on the matching rights of restricted free agency.
Elfrid Payton – Phoenix Suns
[$4.53m Qualifying Offer – $9.99m Cap Hold]
The Orlando Magic dealt Payton to the Suns at the trade deadline after finding very little interest from other teams. The Suns, according to sources, were high on Payton and wanted to the opportunity to try out the fit before committing.
So far, Payton has been productive enough to think the Suns may hang on to him.
The wrinkle to watch in all of this is what could be as many as three first-round draft picks (most insiders believe one of those later first round picks is going to be traded), and a boatload of free agent money.
Assuming the Suns don’t find a better option in the draft, there is a good chance Payton is back in Phoenix on a new deal, but its unlikely the Suns are going to break the bank for Payton – meaning he might be poachable.
Zach LaVine – Chicago Bulls
[$4.42m Qualifying Offer – $9.60m Cap Hold]
There has been a lot of talk in Chicago about how much Zach LaVine is really going to command. Given the lack of cap money around the NBA and the Bulls ability to match anything reasonable, LaVine may be in a tough spot if he is expecting the marketplace to boost his deal.
Sources close to the situation said it would take a whopper of an offer for the Bulls not to match. The NBA has cautioned teams about declaring their willingness to match offers publicly, but Bulls sources that would comment on the subject found it laughable that LaVine wouldn’t be back in Chicago on a new contract, the question remaining is what’s the amount that gets it done?
Jusuf Nurkić – Portland Trail Blazers
[$4.14m Qualifying Offer – $8.84m Cap Hold]
It seems for some time that maybe the Blazers had cooled on Nurkić, as they explored trades for other centers for several weeks leading up to the trade deadline. In the end, the Blazers held firm and have gone a crazy run—enough to suggest that Nurkić might actually get a new deal in Portland.
The big issue facing both the Blazers and Nurkić is their proximity to the luxury tax. It’s possible the Blazers look to shed some contract money this offseason to clear up their cap, but with both Nurkić and fellow potential restricted free agent Shabazz Napier looking for new deals, the long-term may impact the short-term.
Blazers ownership has never had a problem spending money, but once a team rolls over the luxury tax line, it becomes harder and more expensive to make trades.
Given how well Nurkić has played (especially recently) it seems unlikely that Portland doesn’t retain him, especially considering how low both his qualifying offer and his cap hold are, the Blazers are in the driver seat on a new deal.
Rodney Hood – Cleveland Cavaliers
[$3.47m Qualifying Offer – $7.16m Cap Hold]
The prevailing thought around the Cavaliers is that Hood is not a rental. The Cavs made the deal to acquire Hood not only for the short term, but to re-sign him this summer.
While the future of LeBron James is going to weigh on every decision the Cavs make, the belief if even if James leaves,Hood is a good future piece to build around making his next deal something of a formality.
There is a window in which another team could try to poach Hood with a hefty offer, but given where the Cavs are cap wise, there is zero reason not to match, even a crazy offer.
As some on this list, the money paid to Hood is really only available to him, as the Cavs won’t get anywhere near cap space in the next couple of years.
Clint Capela – Houston Rockets
[$3.42m Qualifying Offer – $7.0m Cap Hold]
The cap hold on Capela makes it nearly impossible that he won’t be back in Houston. While the Rockets do have big dreams of what could be possible this summer, they can make all of their moves and still exceed the cap to re-sign Capela.
There is always the chance a team tries to force the Rockets hand and timing, but at the end of the day, just because a team makes an offer doesn’t mean Capela has to accept it.
It’s pretty safe to say the only uncertainty on Capela is how many years and how many dollars.
There are other players who could be restricted free agents based on being a second-round pick, being undrafted or simply signing shorter-term deals. As we get closer and closer to free agency, we’ll look at these in more depth.
Until then you can check out all the 2018-29 Free Agents here.
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