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Is Cap Space Overrated?

 

The Celtics currently have the second-highest payroll in basketball at $79,205,308. That’s if you don’t include the 7 million dollars they’re paying Rasheed Wallace and Shaq not to play basketball.

But this offseason, $44 million comes off the books, making the Celtics a major player in the magical arena of “cap space.” They’ve got a huge amount of it to throw around, and many commenters have suggested that the Celtics trade some combination of Jermaine O’Neal, Keyon Dooling, Chris Wilcox, and Sasha Pavlovic, along with the ~$12 million in cap space for next season that comes with them, in a trade for a passable rotation player like Gerald Wallace or Andray Blatche.

Unfortunately, most teams don’t really need or want cap space. For multiple reasons.

First, under the new CBA all teams are going to be required to spend 85% of the cap next season. Since the cap is going to rise to about $61 million next season, the minimum is going to be in the neighborhood of $52 million.

Second, cap space is theoretically desirable to sign major free agents, and most teams have figured out that signing major free agents is not something one simply does.

Let’s take a look at three frequently brought-up trade targets in the comments: Portland, New Jersey, and Oklahoma City.

Portland: The Blazers don’t need financial relief. At all. They have Marcus Camby, Raymond Felton, and Greg Oden coming off the books after this season. Gerald Wallace has a player option and might be gone also. They’re definitely going to have $20 million to spend, and possibly $30 million. Consider the fact that Portland isn’t a primary destination for a lot of free agents (unless they have something they need pickled), and that figure’s probably going to be enough.

New Jersey: The Nets only have about $9.5 million committed without player/team options next season. If all of those options are picked up, that number goes up to $18 million (Deron Williams’s player option doesn’t really count, because they’re either extending him or he’s leaving). If they don’t take the team options on Jordan Farmar or Shawne Williams and ship out Brook Lopez, they’re going to have at least $53 million to spend in the offseason, which is much, much more than enough to pay Howard and Deron Williams next year without even going over the cap.

Oklahoma City: This is a team that’s actually running out of room: after signing Russell Westbrook to a max extension, they’re probably going to cross the cap barrier next season and pay a small premium for it. Some space frees up the following season, but at that point they’re going to try to sign Serge Ibaka and James Harden, and that’s going to cost them.

Here’s the problem: there isn’t a player on the Thunder roster who the team A) would deal and B) would help the Celtics. Nick Collison, Thabo Sefolosha, and Eric Maynor are all useful pieces with cheap contracts: Sam Presti isn’t trading one of them for $12-15 million in cap space a year before he even needs it. Cole Aldrich and Reggie Jackson are still on their rookie deals and still developing: they’re staying. The only player the Thunder might look to deal that could contribute in Boston is Kendrick Perkins, and while I strongly believe Ainge blew the Perkins deal, I don’t think he should have resigned him to a big contract like the one he got in OKC.

These teams are indicative of a lot of teams around the league: they’re either flush with cap space already, aren’t looking to deal any useful players away, or don’t need space in the first place because A) they need to reach the salary minimum and B) no big free agents want to sign with them anyway. Mention a team in the comments and I’d be happy to lay out why acquiring cap space alone is not of interest to them.

In closing, yes. Cap space is overrated.

 

  • lucidsportsfan

    Good point. But even though it's not so helpful to make trades right now, isn't it definitely a much better position to be in heading into next year?

  • Ray

    While I agree with the premise that cap space is overrated, I think you have several flaws in your analysis. First, a very knowledgeable blogger who used to work here says that the situation is not so rosy for the Nets. They need to clear out about $7M to make a run at Howard/Williams while keeping any semblance of a team around them.

    Secondly, cap space is useful for more than just signing free agents. Let's start with the Perkins trade you mentioned. OKC was able to carve out a tiny sliver of cap space which allowed them to extend him beyond what the Celtics were able to offer.

    More relevant to the current situation, cap space is useful to facilitate trades. There have been a number of trades in recent years where a team stashed a player in their cap space and took a pick or other compensation in exchange. If the Celtics miss out on the big free agents (likely) expect Ainge to participate in one or two of these types of deals next season.

    • hdavenport

      a) My math is a little off on the Nets, because Shawne Williams and Farmar have PLAYER options, not team options. Still, the scenario I posit above has the Nets letting Brook Lopez go, which, as Zach laid out, is what the Nets would be hard pressed to make happen without opening up some cap. Doesn't make sense to try and keep him at market price with his redundancy at the position with Howard and his own injury history.

      Anyway, yes, you could probably end up with Farmar, Shawne Williams, or Johan Petro for that package of expirings. Maybe Farmar's an okay option for PG depth, but none of those guys are going to be that helpful.

      b) They still had to get Perkins to agree to the extension! You need to be a desirable free agent destination before your cap space is useful in signing anyone to a big contract. The Celtics just weren't willing to offer Perkins the kind of money he's getting now (and they weren't wrong).

      c) Sure! Cap space is useful for that purpose. I'm not saying it's totally irrelevant. It's just not something that drives meaningful trades these days.

  • someguyinsac

    For fun and excitement, what's your take on the Kings and their situation?

    Thanks HD!

    • hdavenport

      The Kings have about $10 million in player options in Jason Thompson, J.J. Hickson, and Donte Greene. I haven't kept that close an eye on their development (although I guess Hickson has regressed crazily?) but they might still want to give those guys another year to break through, because none are that expensive and they need to get to the salary minimum anyway.

      That leaves them with about $8 million that they HAVE to spend next season under the new CBA. If I were a Kings fan, I might actually be a little excited to see what they do with this money! I could see them overpaying a solid young PF like Darrell Arthur or, to build the craziest team ever, Michael Beasley/Anthony Randolph. Maybe a PG like Dragic or Felton (still only 27). A core of one of those guys, Cousins, Evans, Thornton, whichever member of that Green/Thompson/Hickson trio looks the best, and (I guess) Jimmer could be pretty crazy, and definitely exciting if Cousins continues to develop like a beast!

      • hdavenport

        I'm sorry, change "player options" to "team options" in the first sentence. Very stupid mistake I keep making.

        • someguyinsac

          Thanks for that, appreciate the time you took to look at it.

  • bk1234

    Hayes, assuming the Celtics have a ton of cap space this summer and no real FA crop to spend on, can they front load the deals so they meet cap requirements this year but have more to spend in future years? Not familiar with the new CBA but I know you can front load deals in NBA2k12 (which doesn't reflect the new CBA rules)

    • hdavenport

      Pretty sure you can decrease a salary by only 8% per year, which is the same amount you can raise it by. So yes, you can front-load contracts, but not by much.

  • ElRoz

    My goodness! Boston is paying Sheed and then they go and sign JO! Wilcox played well…but Danny apparently has a knack for these kinds of signings – Green, Wilcox, JO.

    I am seriously worried about DA signing players for next year, the way his decisions were borne out the last two years.

    • hdavenport

      That's a totally legitimate worry! Don't forget that as well as Wilcox was playing, he'd always been a major injury risk: he averaged 38 games over the four years before Danny made the deal. Danny couldn't have predicted this heart condition, but odds were that Wilcox would have been sidelined by something else.

  • John V

    It's not just about cap space. Sometimes, it's about money, too. Portland doesn't want to pay Gerald Wallace $11 million next year. They think they can do something better with that money. It's not just the CBA that limits them.

    Maybe the Nets have their eye on a third player. Or maybe they're about to pick up Turkoglu's contract, which will greatly limit their cap space. I don't know, exactly. But all the rumors and all their actions seem to indicate they want to clear space. Like I said in the other thread, they probably don't mind losing a few more games this season, either. They have a couple of serviceable players who are not in their long term plans, and the best way for them to get rid of them is to trade them for expiring contracts.

  • http://twitter.com/kevincote @kevincote

    Without cap space your assets are burdened with having to matchup with salaries or you have to package treasure with junk to make a deal happen – this instantly makes you offers less attractive. Without cap space you must not only have the talent/asset to entice your trade partner but you have to be willing to eat bad contract or simply not be able to make your move due to unmatched salary… With cap space your assets become normalized in value, you can trade straight up a talent for a talent without regard to $.

    • http://twitter.com/kevincote @kevincote

      Another point here is that if you can't entice stars to sign as FA's then you better trade for them and build a contender worth sticking with – (Big 3 style) if so you'll want cap space to make that process easier.

  • Awerkr

    Another point here is that if you can't entice stars to sign as FA's then you better trade for them and build a contender worth sticking with – (Big 3 style) if so you'll want cap space to make that process easier.
    Cool academic plagiarism

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