Posted on: July 8, 2009 2:48 pm
This is a total game changer for the NBA as a whole, and I still can't fully believe the full scope of what this news really means. I'm literally stunned. Let me try to break it down to give everyone the complete picture...
First off, as anyone who has read my work on the recent NBA free agents has seen me mention many times, the salary cap is derived from something called BRI, or Basketball Related Income. The general idea is to take the total basketball revenue of the NBA, divide it by almost half (51% to be exact, the share that should go to the players), and then divide that by 30 for the 30 teams. I expected the 2009 cap to come in at 59 million dollars or so, I was thinking there would be a 1% increase in the BRI. This was a bad thing for teams targeting 2010 free agents, because the cap has grown from 3-5% every year for the last 4 years or so. Less cap growth means less cap overhead to spend on max deals for the big time class of 2010.
Well, the 2009 cap is in now. And it's DOWN 1%. Last year, the salary cap was 58.7 million (roughly). This year, it's 57.7 million.
All those free agents that expected to get 5.9 million on the mid level exception contracts they signed, they are only going to get about 5.7. Trevor Ariza, Ron Artest, they both just watched about 3 million dollars vanish. Hedo Turkoglu probably just lost 10 million dollars over the life of his long term deal unless the Raptors get creative and make more cap room for him (or I am missing something, but I feel good about being right about this). Anyone who wanted to make a run at the restricted free agents like David Lee, Paul Millsap, or Ramon Sessions, they just lost about 2 million dollars in cap space between what they thought they would have to offer and what they really do. This is a game changer on a level I can't overhype, it's big time news.
I could write all day about how this changes things for David Lee alone. Nobody has the cash to offer him an under the cap deal he would accept. And nobody now has the money to throw him an offer the Knicks won't be really tempted to match. The Knicks are rumored to want to keep Lee at a price like 7 million dollars. Lee wanted 10 million. Lee is very unlikely to get what he wants now, 10 million is a lot more today then it was tomorrow, not just because of the drop in the cap, but the predicted drop in the cap going forward (the huge news I will get to soon). The unfathomable might just have happened, David Lee might stay in New York for a number of years. But as much as I love the Knicks, this news goes far beyond the situation in New York.
Let's go with a direct quote from tWWL for this one:
In a memo announcing next season's salary cap and luxury-tax threshold, sent out shortly before the league's annual July moratorium on signings and trades was lifted at 12:01 a.m. ET Wednesday, NBA teams also received tentative projections from the league warning that the cap is estimated to drop to somewhere between $50.4 million and $53.6 million for the 2010-11 season. This floors me. The economy for the NBA is worse then I ever thought, on a scale of like 4 fold. And I have been on record as being VERY gloomy about the future of the NBA on the economic side. I expected a 2010 cap of 63 million, which is far less then the numbers like 68 that have been thrown out by a multitude of sources, both large and small. I can't believe this! Let's take the number 53.1 million dollars for a 2010 cap and let me show you how huge this is for the NBA (I have previous data for a cap number of 53.1 million dollars that I can use to give you accurate information).
Let's take LeBron James, the poster child of the 2010 offseason. He had a 17.1 million dollar team option that he was expected to decline. It was thought that he would be able to get an offer on the level of 17.5 million from other teams on a cap of 63 million. But now the cap is going to be (let's say) 53.1 million.
LeBron's max salary in 2010, if he opts out, is 25% of the cap, and that is the 48.04% BRI cap rate (called the Alternative Cap), not the 51% BRI cap rate that me and you know as the cap. At 53.1 million, LeBron's new MAX deal would be just under 15 million dollars! The Knicks, the Nets, the Pistons, anyone you think would want to offer LeBron a deal, they can't even offer The King 15 million if this doom and gloom prediction comes true. Cleveland, however, still has LeBron's bird rights, and now they can offer LeBron way more money then any other team. Advantage Cleveland?
Yes and no.
It's true that Cleveland can offer LeBron a 6 year deal starting at 17.2 (roughly) in 2010 if LeBron does opt out, while the Knicks can only offer 5 years starting at 14.9, but the real question now is, do you want to offer LeBron that much money? Think about this, 17.2 million is roughly 33% of the total cap! If the Cavs add Chris Bosh at 15, that's just under 20 million to field a team! In theory, you can build a team with 20 million, but unfortunatly for the Cavs:
Mo Williams - 9 million
Delonte West - 4.5 million with a 500k buyout (non-guarenteed deal)
Daniel Gibson - 4 million
J.J. Hickson - 1.5 million
Total, roughly 20 million.
The Cavs literally would have to sign another 6 players for the league minimum (does not count against the cap) to field this team. It would be Mo, LeBron, Bosh, West, Gibson, Hickson, and a bunch of D-League players. How can that team compete with Kobe and Gasol and Bynum and Artest and maybe Odom (very likely Odom now, the Lakers are probably dying to lock Odom up and his market just went down the tubes with this news)? I don't think they can.
There is next to no good way to play 2010 now. The NBA might literally find themselves in a state of anarchy. All these free agents are going to get FAR less money then they ever thought (remember, when the cap goes down, the MAX on new deals goes down!), and if they stay where they are for the Bird Rights to get more money, then their team will have next to nothing to find new pieces to help them.
I could go on all day about how this changes things, but I can happily report that Knicks GM Donnie Walsh is ALREADY making moves to adjust. How? He just offered Grant Hill a huge deal, 5 million for 1 year or 10 million for 3. That is 250% more then the Knicks were offering before this news.
Why? It's because of the new biggest name in the NBA trade/free agent market, a cost controlled player who can help your team win without a big cap hit. All of a sudden, the most coveted player for any team that is trying to win in 2010 and knows it needs cheap players to do so.
Try to follow this. Grant Hill makes Wilson Chandler expendable. Wilson Chandler makes the Timberwolves ears perk up.
And Ricky Rubio might just be the biggest player a team that wants to sign anyone big in 2010 can get. A cost controlled starting PG that loves to pass and make teammates better. He's got star power. He's got a low cap number. He could be the best player in the 2009 draft.
And his upside just got about 5 times more desirable, for a number of factors, most of all the cap.
I'll be here all day to field questions, I'm only stopping here because I have so many different thoughts, I'd like to save the rest of them to share with people who have specific questions, and I could use the break to get a better grasp of how expansive this news truly is. Feel free to stop in and ask anything, I'm very happy to answer to the best of my ability anything you want to know or me to make more clear!
Posted on: July 7, 2009 2:31 pm
So for those of you that missed it, LeBron James was apperantly trying to court Trevor Ariza to back out of his deal with the Rockets and jump ship to the Cavs. The Cavs put on the full court press to get Trevor to bail on the Rockets, owner/coach meetings face to face and calls from LBJ and Shaquille O'Neal , so even though the Cavs could only offer the mid-level, they tried to stand out. The most interesting part of this? The following leak about a phone call LeBron had with Trevor A.:
"Trevor asked LeBron if he would be in Cleveland after next season," the source said. "And LeBron said, 'I'll be there. Of course, I'll be there.' "
Ouch, big blow to Knicks fans, looks like LeBron is staying...
Oh wait, of course he isn't...
LeBron's camp is now going out of their way to deny this report! Think about that for a second. If LeBron wasn't sure where he'd be after next season, he could have just let it stay out there, after all it's just the words of a 24 year old who had a phone convo with LeBron. In fact, LeBron could swash all this talk about 2010 any time he wants to. He could clear up his long term future, he could sign an extension or at least just say he is going to sign one next year, and maybe Cleveland for the first time in the history of the Cavalier franchise could sign a free agent away from another team that amounts to anything, becuase as we all know, Cleveland has never, ever, ever signed a free agent worth anything at all. But LeBron refuses to do that, and he refuses to even let the idea that he might be staying in Cleveland last more then a couple hours before his people squash that story like a bug.
In fact, I'm gonna post the words of my man Tommy Dee from The Knicks Blog, who does great work. His take on this issue mirrors mine, and he worded it really well, so there is no use paraphrasing his words when I can attribute him fully.
"...every day that Lebron doesn’t sign his extension is a day in the favor of him finding an address elsewhere. Think about it, the first argument you get from a Cleveland supporter is because he’s from there and they can offer the most money and the second is that the Knicks stink. The second point is to illustrate and hammer home the fact that Lebron craves championships.
Well, if he wanted a championship, he’d give his team the best chance to win THIS YEAR and the years following. Do you really think that the guy is unhappy that guys like Rasheed Wallace , Ron Artest and Charlie Villanueva , players who could really help him win this year, aren’t there? Don’t you think he would be fuming that his management couldn’t secure any one of them?
He’s not upset because his wavering is the reason they are not there and he knows it.
We’re talking about a warrior, and a player who uncharacteristically stormed off the floor without shaking hands with Dwight Howard , which to me was a clear example of how badly he wants to win. He couldn’t stomach the sight of a team celebrating. Right or wrong, he left the floor because that’s how much he wanted to win. He didn’t know what to do when he lost.
So now I’m supposed to believe that his attitude has changed? That he won’t do everything it takes to bring in the talent to get over that frustrating hump THIS YEAR when no other team is standing pat?
You want me to believe that he thinks Shaq alone is that player to take him to the promise land?
You want me to believe that Lebron is not giving his team the best chance at a title this year because he wants to “keep his options open” in 2010?
Well I don’t. I didn’t before today and I won’t tomorrow."
Makes you think, doesn't it...
Posted on: February 18, 2009 11:16 pm
Well, it's the most important day of the Knicks season tomorrow, the trade deadline. The Knicks got a huge OT win over the Spurs last night to climb to 22-31 and establish that they have the talent to beat very good teams in the Garden, which is the only way that Knicks will get the 8 (or 7 should both Milwaukee and Detroit falter) seed. What will happen? Let's break down the possibilities, in the order I find them to be likely:
1.) Nothing (Big favorite)
This would make me very sad, but I trust Donnie Walsh. Rumors about the Knicks and the deadline are hard to find, but they are out there. David Lee, Nate Robinson, Malik Rose's expiring contract, the Knicks have the chips to make a play. I never believed the Brad Miller rumor, but some of the others I do believe have a chance, and I will get into them later on. But Walsh is committed to the 2010 plan, and any astute Knicks fans knows exactly what that plan is and may not like it, but has learned to love it, because it is the direction of the team. David Lee is not in the Knicks future, he's not worth $10 million in 2010 (more on 2010 in a second). Cap space in 2010 is priority #1, making the playoffs is a goal for this season, but Walsh won't accept even a moderately decent 2010 contract to help the Knicks win right now.
Why not? David Stern vindicated something I pointed out on this board a couple months ago during All Star Weekend. The 2010 cap is coming DOWN, not up. This economic crisis we face as a world is causing the US to enter a period of stag-deflation, where the economy is stagnant with a deflationary enviroment that is going to last YEARS, not months. Look on any major finance webpage, you will see some article that says something like "lower prices likely to stick around". What does this have to do with the NBA? Prices will hold steady, revenue will slightly fade, and the cap is based off revenue numbers. 2009 NBA revenue will set the 2010 cap. 2009 revenue will be less then 2008 revenue. So current contracts that go through 2010 are poision. Walsh understands this, so he will make a deal that fits perfectly into the long term plans of the Knicks (by either helping or not harming 2010 cap space) or he will make no deal at all. Knicks fans that would be sad to see Lee go tomorrow have the wrong idea, and I will get to later.
2.) Malik Rose is dealt for some small amount of help (less then 35% chance)
Malik Rose could add some leadership to a team in need, and help the Knicks pick up a small piece for the rest of this season and maybe 2009. I would love to see Rose dealt for Jerry Stackhouse. Stack is riding pine in Dallas, but he would be the closest thing that D'Antoni would have to a shooting guard if he went to New York. Dallas is fighting for a playoff spot, and a player like Malik Rose can do wonders for team chemistry and he could help the progression of young key Mavs like Brandon Bass. I would get this deal done in a heartbeat if I was in charge, but thankfully for everyone, I am not. But I think this trade is win-win (Note: this trade isn't speculated, it's just something I'd do.)
3.) David Lee is dealt, most likely to Portland (unlikely but possible)
I am a huge David Lee fan, but I would LOVE to see this happen. Why?
a) Lee is not getting traded without a team accepting Eddy Curry's contract. With Eddy Curry off the books, the Knicks are a legit threat to build a real contender in 2010. I would give up the playoffs this season and the entire 2009 season to see the Knicks have the best chance to rebuild. I want my team to be great, not average, not above average, but great. Losing Eddy Curry would do more for the Knicks then winning a playoff series this year and next year would do for the Knicks. The Knicks have the coach, the location, and the atmosphere to make up for a lack of on-court success, but no team has the ability to make up for bad contracts.
b) Lee is NOT coming back next season. He thinks he is worth 10 million a year. He's not to the Knicks. Like it or not, Danilo Gallinari is the Knicks PF of the future. He's Walsh's guy and he's Dantoni's guy. He will get the chance to have a 2009-2010 season like Wilson Chandler is having this season. He will be featured, expected to contribute, and he will be playing serious minutes in 2010, something you can't say about Q-Rich, Harrington, Duhon, or any of the rest of the Knicks for sure at this point. Chandler might be traded next season as an attractive young chip. Nate may or may not be back depending on how much interest he gets in free agency. But Danilo is the one sure fire thing about your 2010 New York Knicks right now. And Danilo is apparently a 4 to D"Antoni and Walsh. Sure, Lee is playing the undersized 5 right now, but it's not just the number, it's the offensive focus that the Knicks will want to transfer off of Lee and take some of that and give it to Gallinari.
c) Moving Curry shows 2010 free agents that Walsh is a skilled enough GM to get out from underneath big problems. If players are worried about coming to New York due to the recent results on the court, having a GM who can work Magic will ease concerns.
4) Nate Robinson moves (15% or so)
Nate for a 2010 first rounder? You can argue strongly the Knicks need the return more then the player, young cheap players are going to be very valuable in 2010 if/when the cap lowers. But Nate will probably not garner such an offer, unless a team hurting for attendence wants to feature KryptoNate. Given the Knicks are already selling KryptoNate green shirts, it seems that the Knicks are going to hold off on any offer for little Nate that doesn't involve a 1st rounder and take their chances letting Nate walk this summer unless the marker for Nate Robinson is so weak this summer that the Knicks would be foolish not to match terms using the 2009 mid-level (He is restricted). Nate is popular with NBA superstars, so he could have value in luring big names to the Garden in 2010, which is worth mentioning. I don't see Nate moving for a player, the Knicks would get (deserved) backlash for that.
5.) Shaq (!!!!!) (It's probably like 1% if that, but it's been speculated and I can draw up a doozy)
Why God why? I don't know. But Shaq seems open to the idea. I don't know what you give up to get Shaq in a deal that would actually happen in a million years, but if somehow the Knicks dealt a package that included Jared Jeffries and got Shaq out of it, I would be all for that. But I doubt that is how it would go down, so it would probably be some dumb trade.
But consider this idea from my head. Phoenix looks really good last night running the D'Antoni system. Jason Richardson is a mental question markafter trying to go 88 in his Delorian in a hospital zone or whatever the heck he did. Shaq does not fit in anymore. Kerr knows he needs to win now to save his hide.
He could get Lee (to help fill the Shaq void), Q-Rich (to be the compliment/insurance policy for Jason Richardson), and maybe extra considerations for Shaq and maybe someone else (lets pretend Hill for the sake of this paragraph). IF Kerr takes on Curry that is! Could it happen? Maybe once in a blue moon. But if you are Steve Kerr and trying to save your hide, don't you consider this offer for a few minutes. Curry isn't going to play, but you get Lee and Q-Rich, two great up-tempo fits, for Shaq, and maybe you "trick" the Knicks into throwing in little Nate or something. Phoenix all of a sudden looks really really tough. Nash/J. Richardson/Q. Richardson/Lee/STAT? Scary! And maybe a Barbosa/Barnes/lttle Nate/Z-Bo's white puncihg bag bench? You can compete this year, right? Steve Nash, two great spot up shooters with a bit of inversion post game, and two guys to run the pick and roll with that have a bit of pick and pop range? This is a good team!
Meanwhile the Knicks laugh and laugh as someone traded for Curry, and Shaq keeps the Garden entertained until the summer of 2010. I mean this is a no-brainer for the Knicsk to pull off. The only question is how desperate Kerr is and if Walsh thinks to try it.
6.) Stephon Marbury is dealt
Psyche! So not happening. Nobody wants this clown. My Mavs fan friend says he would do Starbury for Kidd, but he's probably the only one who would offer that, and that is one of the few trades the Knicks would do for Starbury, and it's not happening, nor is any other trade. I just wanted to laugh at Starbury's plight a bit.
That's my opinion on what will happen in the next 14 hours. I honestly expect a quiet deadline. But I will be watching and keeping hope alive Donnie pulls off a master stroke.
Posted on: December 31, 2008 2:43 am
Edited on: December 31, 2008 2:44 am
Over in the CBS NBA forum, CBS user Feanor made a great post earlier this week about NBA cap space, and in it a lot of fans seemed to think that Cleveland, due to possessing Bird Rights to LeBron, can offer LeBron a deal that far far exceeds anything teams like Detroit or New Jersey or New York could offer LeBron. I thought that I would make a post about what "Bird Rights" really are and what they mean to superstars like LeBron for the upcoming 2010 free agent class for the Knicks instead of recaping a Bobcats game, since I am still waiting on the Knicks to show me what direction they are going in.
The most important draw about Bird Rights, and the real value they have, is getting to sign a free agent if you are over the cap when he is a free agent. However, you don't get to use the vast majority of the powers of Bird Rights on a player if you are under the cap (Like Cleveland will be in 2010). Bird Rights are a salary cap EXCEPTION. Since the Cavs will be under the cap, they don't get execeptions from the cap, they don't need them. It would be like if your bank let you be exempt from one overdraft charge a year after you had 3 overdrafts. If you have just one overdraft, they don't give you an exception to the fees, because you were under the exception number. So for teams under the cap (over half the NBA in 2010 by current estimation) with big time free agents (like Cleveland), the concept of Bird Rights doesn't really apply.
Also, the max salary that any superstar will get in 2010 that signs as a free agent (extensions are slightly different, but then again if you extend your contract, you arn't a free agent) is well defined in the leagues collective barganing aggreement. No matter where LeBron signs in 2010, he is going to make 17.4 million in salary for the 2010 season (give or take a touch, it will be 30% of the salary cap, but it will be the same for every team). Many fans seem to think that while the Knicks can offer LeBron a max deal, that the Cavs could offer LeBron some super max deal with a salary that starts at something like 23 million and keeps going up. Not true. LeBron will make a total of $0 more in Cleveland then he will anywhere else in 2010.
Bird Rights do apply to free agents that re-sign with teams that are under the salary cap in 2 ways, those teams can offer their superstars a 6th year, and can give raises of 10.5 percent, instead of a raise of 8%. Many Cavs fans have pointed to the oft-reported fact that LeBron can get $33 million more from the Cavs then he could from other teams and seem to think that other teams have no way to compete with that huge raise. But did you know that over 96.4% of that $33 million figure will actually go to LeBron no matter what?
The lion's share of that $33 million figure comes from the fact the Cavs can offer that 6th year that other teams cannot offer on that first contract. But the $33 million calculation ignores the fact that LeBron won't be playing for free in his sixth year with another team! Over 28.5 million of that 33 million figure is derived from that extra 6th year, and LeBron will be making 27.4 million in year 6 without all the Bird Rights multipliers. That maens even that extra 6th year that Bird Rights offer LeBron is barely worth 1 million dollars more, and we can take 27.4 million off of that 33 million figure right off the bat. Bird Rights arn't looking that important now, are they?
And it gets worse! Because after 3 years, LeBron's new team will have Bird Rights on him, and can offer him the exact same percentage raise he would have got in years 4-6 of a max deal with the Cavs. So we already know that LeBron will make the same in year one of his 2010 deal, and I think we can all agree that every team in the NBA will happily extend LeBron's deal after 3 seasons to utilize his Bird Rights and pay him the new max allowed, so now LeBron will be getting the same raise in years 4, 5, and 6 of his next deal. So only in years 2 and 3 with Cleveland be able to offer an advantage.
How much is this advantage in years 2 and 3? Well, in Cleveland, LeBron will get a 10.5% raise in years 2 and 3 off his max deal of 17.4 million in 2010. In any other city, LeBron will only get an 8% raise. So in 2011 Cleveland can offer LeBron a whopping $435k more. In 2012, that number goes to $950k more. So giving up his Bird Rights will cost LeBron a grand total of under 1.4 million until he regains them with a new team. And that is it! So we can chop more money off of the 6.4 million that is left from the initial $33 million that Cleveland is said to be the only team able to offer to LeBron. Do all the math and it comes out to Cleveland barely being able to offer just over 3.5% more then any other team can offer LeBron over the first 6 years after 2010, or the difference between making over 131 million and under 136 million on his NBA contract. It doesn't seem like 5 million and change over a 6 year period is going to keep LBJ in Cleveland, IMO.
So in conclusion, the idea that Cleveland owns Bird Rights on LeBron, or the idea that any free agent in 2010 will likely have it's Bird Rights held by the team they are playing for at the end of the 2010 season, means that the current team that the superstar is under contract for can offer crazy cash to keep it's player that other teams can't come close to matching is very wrong.
Superstars in 2010 will be signing contracts for a number of reasons, like rings, big markets, because Nike will pay you an extra $50 million to play somewhere, whatever. But hopefully this shows that Bird Rights are not going to be a significant factor to free agents when they sign deals in 2010, so long as they arn't the rare few that will be considering re-signing with teams that will be over the cap in 2010. The money is pretty much the same everywhere for everyone when it comes to your NBA contract. .