NBA Salary Cap Chat With Larry Coon 6/15/12

1. Tasia

   Does the league collect luxury tax on July 1st or do they give the teams a chance to cut their payroll?

   • Larry Coon

     The Luxury tax is based on each team’s roster on the last day of the regular season. There is no opportunity after the season to clear salary.

     They figure out each team’s tax bill with the accounting that takes place during the July Moratorium. They send out a memo at the end of the moratorium that details the new cap, tax levels, exception amounts, etc., along with each team’s tax amount and instructions for sending it in.

2. Mateo

   How much do you think garnett and allen will worth in the free agency? Lang said 7m for garnett and 5m for allen. If thats the case, celtics can afford them and add another significant player. ( as long as allen will be comfortable playing off the bench. ) Another thing is if they sign for 1 yr, celtics can go after howard in 2013. Is these feasible?

   • Larry Coon

     For both players I think it’s less about money than contract length. These playoffs proved that the Celtics could still be in the mix, although that wasn’t so clear back at the trade deadline. The Celtics stood pat, and it paid off for them. They could go either direction this year — they could bring KG and Allen back for another year and try it again, or blow it up and try to make a splash in free agency. If they bring them back for another year, I can see both getting good money from the Celtics on one-year deals.

     If either player goes elsewhere, they’d be looking for three year deals, likely, for as much money as they get. I could see both getting more than the mid level for three years.

3. John

   Lakers – Iguodala
   Rockets – Gasol
   Sixers – Lowry/Martin

   Seems fair and everyone gets what they want – what do you think?

   • Larry Coon

     I don’t think the Lakers get enough of what they want. Any deal the Lakers pull for Gasol will bring in at least two players. Iguodala would be a nice fit at three for LA, but they’d just be trading a problem at three for a problem at four.

4. Sven

   Hi Larry.
   On 1 hand everyone is raving about the depth of this draft, but on the other hand only Davis is considered a perennial All-Star…Confusing, no ?

   • Larry Coon

     I think you’re seeing residual effects from what people were anticipating a year or two ago.

5. Sammy V

   I think that thunder suffers sometimes from not having any inside scoring presence. Ibaka and Perk didnt take adventage of Battier at PF and Bosh at C. I think Lakers have better mach up against the HEAT than OKC. Should OKC at least think about it in the offseason

   • Larry Coon

     Of course they should think about it — I don’t think ANY team should stand pat. Clippers are in the same situation — neither DeAndre Jordan nor Reggie Evans are offensive threats, and other teams can take advantage of that.

6. badax33

   Greetomg Larry

   Were there any salary cap implications for the Celtics when the cancelled their Quaifying Offer to Jeff Green? Was it wide for them to do that?

   Also, how does the new MLE work?

   • Larry Coon

     They still have Jeff Green’s Bird rights, so they can offer him any amount they want. He won’t be a restricted free agent, but in the big picture, I don’t think that’s such a big deal.

     The new Mid-Level is actually THREE Mid-Levels in the new agreement. A team can get only one of the three in any given year. Non-taxpayers get $5 million, just like in the old agreement (and four year contracts). Since they’re trying to penalize taxpayers, they made the “taxpayer” Mid-Level smaller — it’s about $3 million, and can be used on three year contracts (but the dividing line between the taxpayer and non-taxpayer versions isn’t right at the tax line, it’s $4 million above — a point they call the “apron”).

     The big gotcha here is that if a team is under the tax level and spends the full “non-taxpayer” Mid-Level, they’re committing themselves to being non-taxpayers for the rest of the year (at least, not going more than $4 million over the tax line). So any team that spends more than $3 million in Mid-Level money is saddled with a hard cap of around $74 million for that season. For a team like the Knicks, this can be a big deal.

     The third mid-level is given to teams that clear enough cap room to sign free agents. Once they get their team salary back to the salary cap, they’re given a mid-level exception, called the “Room” Mid-Level, for $2.5 million.

7. James

   I understand in a trade draft picks do not have any monetary value. But what if a team buys a draft pick? Does the amount of money paid count against the cap for either team involved in the trade? And do you anticipate any teams in this years draft selling their #1 picks?

   • Larry Coon

     No, the only things that count against team salary are player salaries (and cap holds, which are there to reserve space for anticipated future player salaries). A trade of cash for a draft pick is a $0 for $0 transaction from a salary cap perspective.

     I can easily see teams selling lower picks this year, but there are some competing issues. On one hand, with the looming increases in luxury tax penalties, teams might not want to commit guaranteed money to questionable players. This will encourage teams to sell picks, but maybe discourage teams from buying them. The other factor is that the cash-in-trade limit is now $3 million per year, rather than $3 million per trade. Combine all these factors, and I think we will continue to see draft picks being sold, but the prices will be lower.

8. Kevin

   Who other than Jim Buss in the Lakers organization is comfortable with giving Bynum a max deal?

   • Larry Coon

     Let’s assess the Bynum situation. He’s still young (24) is the second best center in the league behind Howard, and has proven he’s capable of playing a full season (yes, it was a shortened season, but it was also a compressed season that presented its own difficulties). Center is a premium position. I don’t see how anybody thinks he WOULDN’T be a max player at this point. Yes, there are maturity issues, but you hope he’ll overcome those as he gets older. He’s had to find his way in the NBA with the looming presence of Kobe overshadowing everything he’s done.

     If he makes it to free agency next summer, he will get multiple max offers, guaranteed.

9. Kevin

   A lot of talk is how can the Lakers shed salary my thinking is how can they create revenue. Six home playoff games each of last 2 years isn’t helping with that. And Bynum has soured on fans he won’t help with that. The only thing I can think of is trading for a superstar who can bring buzz, excitement, merchandise sales, ticket sales, etc. What’s your take on Lakers revenue situation?

   • Larry Coon

     I think revenue isn’t the issue. The Lakers have always been and will continue to be one of the highest grossing teams in the league, even with the new revenue sharing system claiming a chunk of the team’s money each year. The question will be how they choose to spend their money, and what means they create to do so. Their new contract with Time Warner is about to take effect, but it’s been said that part of the reason the Lakers pursued this contract is so the Busses can afford to keep the team in the family long-term. If they’re saving the bulk of their TW income for the eventual huge tax bill, they aren’t going to be spending it on players in the meantime. This summer will show us a lot about the team’s intentions.

     With the new revenue sharing and luxury tax a lot of teams will be selling off assets because they can’t afford to keep them. If a team like the Lakers is willing to spend for talent no matter what the cost, then they could be in a position to clean up. But the new system, and their long-term goals, might make this too expensive even for them.

10. Huthayfa

    LeBron,Wade-OKC
    MIA- Iblocka,Kendrick perkins,Nick collens on,James Hardan

    • Larry Coon

      I’ll take “Deals that will never happen” for $100, Alex.

11. John

    When can teams start using their amnesty – how long does it take for the cap room to be ‘available’?

    • Larry Coon

      Amnesty will be available for the first week after the July Moratorium. The cap room becomes available right away.

12. Mike

    Why not Jerry Sloan to the Lakers?

    • Larry Coon

      Because they already have a coach?

13. wiLQ

    Thank you for the update on new CBA. I have two questions about it…
    1) “Teams can both send and receive up to $3 million cash in trade annually”
    When does it reset each year? At the end of July moratorium?
    2) “Trade kickers are paid by the team trading the player” means they will slowly caese to exist, right?

    • Larry Coon

      1) Yes.

      2) Possibly. I think it makes sense from the perspective of “you signed the guy and gave him the trade kicker, so you have to pay it.” Teams were less resistant to signing players to trade kickers when they knew paying it would be someone else’s problem. But in what is often a seller’s market, it’s still a means to up a player’s offer. If a player is deciding between two equal offers, one with a kicker and the other without, I think he still goes with the team offering the kicker, for the most part.

      But the days of guys like Luke Walton getting a big trade kicker are probably over.

14. Cory

    Have cap holds been adjusted for this summer since the league was coming off a shortened season?

    • Larry Coon

      No, they don’t have to. Player salary values were not adjusted for the shortened season. For example, Kobe’s salary on the books for 2011-12 is his full $25.2 million, even though they multiplied it by 66/82 when it came time to cut a check. One of the benefits of doing it this way is that free agent amounts are now correct — and remember, the purpose of free agent amounts is to reserve cap space for the upcoming (full) season.

15. Mike

    Name the New additions to the Lakers nexr yr in your opinion?

    • Larry Coon

      I don’t have an opinion on who WILL be added to the Lakers, because there are a number of ways Mitch Kupchak can go, and predicting specific players at this point is just guesswork.

      If I have to name one player who’s more likely than anyone, I’m not going to name a forward — because any of 10-or-so forwards easily could become Lakers, so picking one of them is at best a 1:10 proposition. So if I had to pick one guy I’d say Dwight Howard. He’s the only guy they’d move Bynum for, it came close to happening in February, Orlando is most likely going to trade him this summer, their principal target (and Howard’s preferred destination) may not have the assets to get a deal done, the Lakers would have Howard under contract for as long as they’d have Bynum (just one more season) so the risk assumption would be palatable, he’s the sort of star acquisition Laker fans would demand, and trading the best center in the league for the second best center would be palatable for Orlando.

      But does that make it likely? Heck no. Still way less than 50%.

16. Arnaldo

    Of teams that may be looking to shed salary to avoid the new tax, which ones do you see more likely to, and what player do you think will be the most surprising to be moved either draft night or during the summer?

    • Larry Coon

      The new tax doesn’t kick-in for another season, so teams still have some time to maneuver. The Lakers look like they could be in trouble, but I can also see them eating it for a short time while Kobe’s window is still open (and when Kobe retires, problem solved). Miami is the team that looks to have the biggest tax bill. If you’re looking for a surprising move, maybe the Heat decide that a team built around the Big Three is no longer affordable.

17. David Kahn

    Wolves get Gasol, Martin, Ebanks, McRoberts
    Rockets get D Williams, Pecovic, Blake
    Lakers get Lowry, s/t Beasley, and Scola
    Martell and Brad Miller’s contracts fill in.
    Seems like it works for everybody (Wolves take on a lot of salary, but are positioned well, rockets have better chips, lakers fill most holes and reduce salary/luxury–although i presume they would try to get Houston to take Metta)

    • Larry Coon

      Possibly something like that — although the Rockets are also interested in Gasol, and it’d be easier (and therefore more likely) to set up a two-team deal than a three-team deal. I also think your trade is a little light on returns for Houston.

18. Jay

    Who do see as amnesty candidates this off season?

    • Larry Coon

      The guy I’m the most curious about is Elton Brand.

19. bolo yeung

    Mr. Coon,

    1. If the Lakers are able to obtain Beasely, do you think he has matured enough that he will provide the Lakers with a Semi-Star caliber presence at the 4? And especially in the glamour of LA, I would think it makes it that much more difficult.

    2. I personally feel that it would be a smart move for the Lakers to trade Bynum for DWill, then move Pau to Center. They could play Beasely at the 4. Pau would become more effective without Bynum in the middle. I also believe Pau has a few good years left with his style of play. That would give you a lineup of DWill, Kobe, Gasol, Beasely, and probably Metta. Thoughts?

    • Larry Coon

      1. Yeah, counting on a guy to grow up — especially when coming from a small market to LA — seems like an iffy prospect. He COULD mature into a nice 4. Or he could regress…

      2. I think the Lakers are thinking they’d only move Bynum for Howard. While moving Bynum for someone like Deron would help them short-term, in the long run they’d have an aging center on their hands. But I agree that Pau is probably more effective at 5 than 4 right now. Problem is, the Lakers are one of the few teams where he wouldn’t be the starting 5. Between Pay & Bynum I think they keep Bynum (or move him for Howard, which leaves Pau in the same situation), so that makes Pau the odd man out.

20. o2cats

    Larry, Thank you for answering my question last week, but I have another issue where I could not find the answer. The Bulls have several non guaranteed contracts (Watson, Korver, Brewer), with salaries that seem too high to be supported under the new CBA. If the Bulls waived the player, and he cleared waivers, are they allowed to negotiate a new contract, or is there some type of waiting period, for their previous team?

    • Larry Coon

      No, they can do that. I remember the Lakers did this with Brian Shaw a few years ago. Waived him shortly before the contract guarantee date in early January, then re-signed him for the minimum.