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NBA@2: Value in Draft is in Teens
Posted By Eric Pincus On June 26, 2012 @ 2:00 pm In All,Main Page,NBA | No Comments
The NBA Draft got a bit easier for the New Orleans Hornets when they landed the number one pick. The decision to select Anthony Davis will be an easy one.
Davis, as the top selection, will make likely $5.1 million in the first year of his contract.
It’s the Charlotte Bobcats and Washington Wizards who immediately hit murky waters as picks two and three. The selections will probably be among Thomas Robinson, Bradley Beal, Michael Kidd-Gilchrist and Harrison Barnes.
Whoever is selected will start their contract at about $4.6 million and $4.1 million, respectively. The next three picks are in the $3-3.7 million range for the Cleveland Cavaliers, Sacramento Kings and Portland Trail Blazers.
It becomes a matter of expectation. The prospects are ranked against each other to make a draft board but in the NBA, ready to play on Day One?
Not every NBA executive is in love with this draft, especially in the lottery. That’s why a number of teams are open to trading down or out (Bobcats, Cavaliers, Kings, Blazers, Golden State Warriors, Raptors, etc.).
One executive noted recently that the true value of the draft is in the teens.
Here the salary range is about $1.4-$1.9 million. The players drafted won’t come with overbearing expectations.
The talent pool will likely include Moe Harkless, Perry Jones, Terrence Ross, Terrence Jones, Royce White, Kendall Marshall, Jared Sullinger, Arnett Moultrie, Meyers Leonard, Quincy Miller, Fab Melo and a host of others.
The Houston Rockets just acquired the 18th pick from the Minnesota Timberwolves for Chase Budinger. That’s a pick in this coveted range on draft night on Thursday.
The Rockets now have three picks in the teens (14, 16 and 18) and they’ll certainly be looking to land a prize as HOOPSWORLD’s Bill Ingram breaks down Rockets Targeting Dwight Howard, Deron Williams? .
While Budinger is cheap (only $885k next season, assuming Minnesota doesn’t cut him – why would they?), he’ll be heading into free agency after this coming season.
The advantage to a lottery pick is the power the team has in length (with option years) and in restricted free agency.
Certainly the Wolves need to add veteran players and Budinger will help them, but Chase wasn’t necessarily the right play for everyone . . . which is why he didn’t go for a higher, available pick.
The Blazers, for instance, have been shopping both the six and 11th pick. Certainly they would have had a crack at Budinger for 11 but had other priorities.
The 2012 NBA Draft is just a couple of days away but it’s going to be a long 48 hours until then . . .
J.R. Smith Opting Out
It’s not a surprise that J.R. Smith has opted out of his contract with the New York Knicks. He was set to make $2.6 million but by opting out, despite not having Bird or Early Bird Rights, Smith is eligible for a bump in pay if he re-signs at $3 million.
Look for Smith to sign a multi-year deal with the team, probably with an opt-out after two years to time with his Bird Rights (or even one with Early Bird).
Smith will certainly listen to other offers but it remains to be seen what the free agent market will look like under the constraints of the new Collective Bargaining Agreement (CBA). For a player like J.R., $3 million may be the going rate.
The dispute between the Knicks and the NBA regarding Jeremy Lin, Steve Novak and the arbitration ruling is under appeal by the league. The team is moving forward with the assumption they have the rights to Lin and Novak, but the difficulty is finding the time for legal resolution before July.
In theory the process could delay free agency league-wide. Instead the NBA and NBPA may find some sort of compromise behind the scenes before then.
Should the Knicks retain the rights to Lin and Novak, that would preserve their Mid-Level Exception (MLE) although it’s more likely they don’t spend more than the Mini Mid-Level Exception ($3.09 million) which would open the door to the team exceeding the luxury tax apron (approximately $74.3 million)
Using the MLE or Bi-Annual Exception (BAE) turns the apron into a hard cap, limiting New York’s ability to spend otherwise.
Getting the Math Ready for 2012/13
At 12:01am on July 1st, the 2012/13 NBA Season begins. Now games don’t start until October/November, but once July hits the numbers flip.
Suddenly a long list of teams will have plenty of cap room. Of course it’s not exactly a loaded free-agent market so where will all that money go exactly?
The salary cap and luxury tax are expected to stay relatively flat at $58 million and $70.3 million, respectively. The MLE will also hold at $5 million. A full, four-year MLE deal will pay $19.4 million.
The Mini Mid-Level Exception for taxpayers will pay $3.09 million, a slight bump from $3.00 million. A three-year Mini MLE deal pays $9.69 million.
The Bi-Annual Exception, which isn’t available to taxpayers, climbs slightly to $1.957 million. It can be used for two years in total at $4 million.
For teams who spend up to the cap, they gain the Room Exception which will be $2.575 million this coming season. It also has a two-year limit at a total of $5.3 million.
Presumably the maximum salaries will stay flat (since they’re based on a percentage of cap) but that won’t be final until the league conducts its audit in the first few days of July. Technically the cap may climb but in the second-year of the new CBA, it won’t drop.
For players with up to six years’ experience, the maximum should be $12.9 million (except those who qualify for more via the “Derrick Rose Rule”). It climbs to $15.5 million for veterans with 7-9 years’ experience and then $18.1 million for those with 10 or more.
The league will sort out the numbers over the July moratorium which limits trades and free-agents signings until the 11th (although there are exceptions – minimum contracts, first-round draft picks, etc.).
Additionally, the minimum a team can pay for a team climbs to 85% of the cap – so the floor should be $49.3 million to field an NBA roster.
Celtics Compensated for Green
According to Adrian Wojnarowkski of Yahoo! Sports, the Oklahoma City Thunder were “punished” by the NBA for the Jeff Green trade, costing the Thunder a second-round pick (the 2013 from the Charlotte Bobcats).
After the Green trade to the Boston Celtics, Jeff would ultimately need heart surgery.
Given the Bobcats’ recent struggles, that could be a very high second-round pick.
The Thunder will be nearing luxury taxes when the time comes to extend Serge Ibaka and James Harden. They’ll need to surround their stars with low-cost, quality players . . . so this punishment is more than just a slap on the wrist.
The question is – did OK City have any knowledge that Green had a heart issue? That remains unclear.
Whatever the answer, the pick is now in the hands of the Celtics.
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