Salary Cap Management

[Lipoli390]

The Wolves guaranteed payroll for 11 players plus the Kevin Martin buyout residual is about $62.5 million, assuming KG exercises his option for next season. The cap is expected to be about $92 million. That leaves us with three or four roster spots to fill and $30 million in cap space to work with. Assuming we keep our 5th pick, that will be cost us about $5 million next season. Assume further that we sign Cole Adrich for $5 million per year, which I think is reasonable given the lack of bigs and the much higher salaries that will result from the huge cap increase. That leaves us with one or two roster spots to fill and about $20 million cap space left. That's just enough to sign a guy like Deng who will likely command $15 million per year, leaving only around $5 million of cap space left over.

The cap is expected to increase to around $102 million following year. Assuming all the above and assuming further that KG calls it quits, we would probably have about $20 million in cap space for acquisitions in summer 2017.

After that beginning in the summer of 2018, it gets challenging. We'll have to pay up to re-sign Wiggins to what would likely be a max deal. We would also have to pay up to re-sign Zach - maybe to a max but at least to a very large contract in excess of $15 million per year. The year after that, in the summer of 2019, we'd have to pay big money to sign KAT to a max deal. We might have to re-sign or replace Deng by then. Pek's salary will presumably come off the books, but other salaries will escalate.

I don't have a good feel for the market under the enormously larger cap that's coming. But those who know have indicated that the new salaries will be staggering. So I think it behooves the Wolves organization to take a long-term view as they make decisions this summer and to proceed with caution to the extent they sign free agents.

[longstrangetrip [enjin:6600564]]

Good analysis, Lip. The likelihood of having to give Wig and KAT max deals is precisely why I argued we are in no position to give any free agent a 4-year max deal this summer (i.e. Horford, Batum, etc.). While we always have the right to give our own players large contracts even if it puts us over the cap, having 3 or 4 max deals in the year we have to pay KAT would without a doubt put us into the luxury tax, and the ownership group is not going to be inclined to do that...even if it means a championship (I don't blame them...the lux tax is ridiculously punitive).

Salary cap management is why I am advocating for pursuing a solid vet like Luol Deng who will likely accept a 3-year deal. My math tells us that a move like this would leave us over the likely cap level in his third year (when we have to play Zach and Wig), but most likely under the lux tax. That's also about the time many on this board (and pundits like Chad Ford) see the Wolves beginning to challenge for a championship, so it's not unlikely a 34-year-old vet who has already made over $100 million in his career like Deng will be willing to re-sign for a a much lower salary, allowing us to pay KAT and not go into Luxury Tax Land.

On that last point, veterans are generally willing to take less money if they are financially secure (they all should be if they have been wise) and they can sign with a team that has winning potential. That's why I think Leydon/Thibs will be able to find terrific vet pieces 4-6 years out who will be willing to take a "championship discount" in order to win championships. Look at the contributions Livingston, Speights, Barbosa and Ezeli have made to GS this year (and last night!). Their combined salary? $14 million! Those are the kinds of players that are going to help KAT, Wig, Zach and Rubio win multiple championships by providing depth with value.

[longstrangetrip [enjin:6600564]]

By the way, I believe salary cap management is also the reason Leydon/Thibs are spending so much time working out players expected to go much later in the draft than #5, and why I think they are inclined to trade down in this deep draft. While there are no guarantees, history shows a player selected #5 is much more likely to become a star than a player selected outside the lottery, and the prospect of having to pay yet another player a max or near max salary 5 years down the road would certainly result in forcing us to make in OkC-Harden type move and trade away one of our core stars. In contrast, history shows that players chosen in the teens are not likely to become stars (and command max contracts), but have a high likelihood of becoming solid role players. That is what this team needs...depth at a good price, not another potential superstar.

Some may say "you can't predict the future, so let's cross that bridge when we come to it", but Lip has teed up this thread with a different philosophy...to take a long-view with respect to salary cap in evaluating the proper moves to make this year. I can assure you that Leydon and Thibs will be looking 5 years out as they approach this year's draft and free agency. That doesn't mean they will pass on a player they really covet at #5 if that player is there, but they will be cognizant of the likelihood of that handcuffing them down the road. I don't think there is that one player they are drooling about at 5, and are much more likely to be looking to trade down. All of their moves this spring signal that, and it seems to me to be the most prudent course of action.

[Monster]

Some interesting points here. One thing I will point out is how many guys last summer signed deals longer than 3 years? I can think of one Kevin Love. Basically the trend has been to do 3 year deals or shorter to give the player flexibility of where they play and of course to get out and get that money with the cap continuing to go up.

You have to be considering what may happ n in FA now but for me I do want to wait and see what happens in the draft. If the Wolves are able to get a young big that projects to be able to play some right away I am not sure where I would spend significant money of a FA maybe even Deng which sounds a bit crazy but I want young guys to have some reasonable path to play.

LST makes an interesting case for trading down. Unless he has some insider info I still don't see reading into them working out lower tier players as a sign of that. Thats what the good teams do and even the bad teams do it. This draft is ripe for buying into a pick lower in the draft. It probably doesn't hurt that Thibs has a relationship with Ainge who has a bevy of picks. It may not help but it doesn't hurt. At this point I feel confident in Thibs and Layden at the very least not botching this draft and FA. I think they are going to be more patient in building this team than some people think but I am biased towards that type of approach.

[Camden [enjin:6601484]]

I don't agree with LST's partial reasoning of trading down because we're fearful of having to pay another max player down the road. I know that's probably not how he intended it, but when you move down to try and acquire role players that are hopefully cheaper over the long-term in order to bypass the opportunity of adding another potential star to a team that only has one, maybe two, legitimate franchise cornerstones, you're making a mistake, in my estimation. It's been said before, but I'll say it again because it's fitting, you can't -- shouldn't -- make franchise-changing decisions based on what the future (four years away) payroll may look like. We're probably conditioned to always think of the future because that's how dreadful the last 12 years have been without playoff basketball in Minnesota, but we're in a very optimal position where we can try and win now -- signing a marquee or just below that tier free agent -- while also building for the future (No. 5 pick) because our young players are ready to produce at a younger than normal age. I'll also add again that this off-season and possibly next are practically the only times we'll be able to spend big in free agency if we are going to end up spending big on our own players in the near future. It's a tiny window before we have no wiggle room. No reason to be passive.

[longstrangetrip [enjin:6600564]]

Cam, I don't want us to be passive this summer either, but I do think the brain trust needs to keep a 5-year horizon in mind as they manage the salary cap. Let's do the math. Most of us think Wig and KAT will command max contracts in a few years, and many think Zach may deserve a near-max if he continues to improve like he did the last half of this season. That would amount to 50% of the cap for just Wig and KAT, and let's say another 20% for Zach (although it could be more). And Ricky will need a new contract in 2019-20 too, and most here expect that to be costly.

So what does this mean for our pick this year? Two things could happen with the guy we draft #5, and neither one is very good. He could pan out and become a star, in which case he will command a max or near max contract in five years. We would easily be well over the cap after only paying 5 players. There will be some cheap role players in the other 10 on the roster, but to win a championship you will need some additional well-played role players too, putting us way up into the luxury tax...and ownership is simply not going to do that. In five years, we would be forced to decide which 1 or 2 players out of KAT, Wig, Zach, Ricky and #5 are going to be our James Harden that we have to let go to avoid the tax...not a pleasant thought.

The other thing that could happen with #5 is that he doesn't become a star. This helps us with our cap situation 5 years down the line (although it's still tight). but may not give us as much depth as we can get by adding two first rounders this year instead of one.

The Wolves are loaded with young talent already and that presents obvious OkC-like cap issues down the line. My hope is that Leydon and Thibs are prudent enough to recognize that, and not put themselves in an even bigger box by adding a 4-year max free agent this summer or drafting another future star at #5. Our cap situation is challenging, but not hopeless if our brain trust proceeds cautiously this summer. Not passive, but prudent.

[TAFKASP]

I completely disagree with trading down based on future cap concerns, 100%, totally disagree. If they were to draft a guy like Dunn and he becomes a star it's the perfect problem to have IMO. There is, and will always be a market for star players and teams that have one can expect to get a very nice return. With Dunn if he's truly a star then you either let Rubio walk, or better yet, do a sign and trade. Or if Rubio is still the better player you trade Dunn, there will be a market and you will most certainly be able to get a good pick and one or two of those late round role players in return, or maybe another young player with star potential.

The flip side, you trade down out of fear of your cap future and draft a couple roleplayers only to have neither Wiggins, Lavine, nor Rubio truly reach their potential, now you're still searching for that second star to pair with KAT. But hey, you have a few valuable roleplayers, I wonder what they'll get you?

You NEVER, EVER turn down the chance to draft a potential star player!
*Edit: Unless you're in the middle of your championship window and their are better win it all options.

I agree with Lip, they need to be planning ahead and preparing for as many of those possibilities as they can. They should be focusing on signing free agents to short contracts, so as to retain future flexibility. But if a key player became available then ownership needs recognize that a year over the cap isn't the end of the world. A four year contract for Cam's guy Horford would mean one year overlap between the end of his contract and KAT's new contract. That type of signing IMO doesn't hurt their future prospects, only forces their window of opportunity open a couple years earlier. I think it's fair to say a competitive team will help fill Target Center and more than compensate financially for a year, even two in the tax down the road vs. having a half empty arena for the next couple years.

Bottom line, star players offer flexibility, the more of them you can acquire on rookie contracts the more options you have going forward, and the lower the chances your plans flame out due to players not reaching their expected potential.

[Monster]

I think another weak case for trading down would be you have control of those guys for 4+ years which is about as long as you can hold onto any guy in the NBA the way it's been trending lately. These are all side bonus considerations. The real reason to trade down is being blown away by a crazy offer or you don't value the guys available to you much of any higher than the guys you can get moving down (you don't see a start player in that spot so you are willing to move down) AND you actually like the guys you can likely get of you move down. That's a lot of ifs. I'd say it's way more likely the Wolves pick a player at #5 than making a deal. That's not exactly any type of revelatory prediction though.

[thedoper]

We don't pay luxury tax for players signed with Bird rights. We can still sign a max player without luxury tax being the issue for us resigning Towns and WIggins. It is the other potential players we might sign. Basically we would have to be super confident about our core right now if we sign a max player. But the cap is going up and we'll be losing some dead weight. I'd rather us go for the best talent we can now. I'm still on the Horford train if we have a legitimate shot.

[Lipoli390]

We don't pay luxury tax for players signed with Bird rights. We can still sign a max player without luxury tax being the issue for us resigning Towns and WIggins. It is the other potential players we might sign. Basically we would have to be super confident about our core right now if we sign a max player. But the cap is going up and we'll be losing some dead weight. I'd rather us go for the best talent we can now. I'm still on the Horford train if we have a legitimate shot.

Doper -- Unfortunately, Bird rights don't exempt you from the luxury tax. In fact it is Bird rights that make it possible to hit and exceed the luxury tax threshold.