Yet another salary cap thread (this time with Durant implications)

[longstrangetrip [enjin:6600564]]

I didn't add up all of your numbers but what is the maximum the wolves would be looking at for luxury tax if they sign Durant and Wigs, Towns, Lavine and Rubio all become max studs?

Part of the equation also needs to be what happens to the value of the team if the the above scenario happens, in which case they are looking at multiple titles. Right now the wolves are the 4th least valuable team at about $720M. if winning titles at least moves the team to the median the team would be worth 40% more...

The lux tax rates are incremental (like the US income tax rates). If you are not a "repeater", you pay $1.50 for each dollar you are over the threshold up to $5 million, $1.75 up to $10 million, and the rate continues to go up incrementally for every additional $5 million you exceed the threshold.

Let's do a sample calculation for 2019-20. A lot of assumptions go into answering the question you asked, and you have provided one example (5 players getting the max). Let's also assume they retain Gorgui and Belly, and they get $15 and $12 million respectively. Our 5th pick this year would be getting about $7 million in 2019-20, and let's say Tyus has developed into an average backup PG and is getting $8 million. We still have to play 6 other players, and with salaries escalating the way they are expected to, it's not unreasonable to assume those role players might each average $4 million per year. This is an extreme example, but that would put our payroll at $198 million, or $72 million over the projected threshold. The tax on that excess would be about $400 million!

Now obviously Glen et al are not going to shell out $400 million for just one year of going over the threshold (by the way, they would be well over the previous year too if they kept everyone), so they clearly would not try to retain all the players above. But replacing players like Gorgui, Belly and Tyus with cheaper options still leaves them in a very punitive situation. Only by relieving themselves of at least two of the max contracts allows them to avoid the tax.

Glen has paid a hefty tax in the past by the way. When they gave KG his big contract, Glen had to pay almost $18 million in tax back in 2003-4. I never got the story about how that happened, but I think management wasn't knowledgeable about the tax and was somewhat surprised when they got the bill. Also, the team's ownership structure was much less complex back then than it is now, so while I'm sure it wasn't pleasant for Glen to write that check, it was much easier than telling several owners with more limited means that they had to write big checks.

[Coolbreeze44]

I think I get it now. If Wig plays alongside other great players his talent just goes away. It's like the age old question: Are you married or do you live in town? One certainly affects the other. Ridiculous.

[kurrdog53 [enjin:7013678]]

I still think that if we have the goods to get a Kevin Durant or Al Horford here that we should do so. I also don't think you make decisions in the present based on what we'll have to deal with in four or five years from now. Just a difference in team-building ideologies between those that agree with me and those that agree with you.

I would agree, but you might have to sell Durant or Horford on the future of this team and if the numbers show that 1-2 players wont fit financially in a couple years, would they really want to sign here?

[Hicks123 [enjin:6700838]]

As Lip laid out in his salary cap management thread, the Wolves current payroll for 11 players (including KG and the Martin buyout residual) is $62.5 million. They also have an option on Rudez at $1.2 million, which I'm going to assume they exercise for cap management purposes. Let's also assume they keep pick #5, and the salary hold for a 5th pick increases to $4 million. They are now at $67.7 million for 13 players, resulting in $24.3 million in cap space...not enough to offer Durant (or any other 7-9 year player) a max contract. What they would have to do then is either hope that KG opts out, or convince KG to defer opting in until after they have signed Durant and another free agent (let's say a backup PG for $3 million). After all this is done, they will have 15 players signed for $98.3 million, over the salary cap but well under the luxury tax threshold.

With the cap jumping up in 2017-18 and KG and other smaller contracts going away, the Wolves have some room to make some targeted free agent acquisitions...nothing close to a max, of course, but perhaps a couple vets that can fill some needs. Although cap room will be limited by the need to pay Gorgui.

2018-9 is where things get tough from a salary cap standpoint, even with the Pek contract going away, because the rookie contracts for both Wig and Zach expire, and they could be looking for big contracts. In addition Belly's value deal of $4 million per year will be over. I'm assuming that Bazz and Belly will be gone (just no way to fit their likely contracts in). If we assume a max contract for Wig, I estimate that our payroll will be $100 million for these 7 players...Durant, Wig, Rubio, KAT (still a bargain at $8 million), Gorgui, Tyus ($2 million) and this year's #5. Since we still have to pay 8 other players, it's clear that there will be no room for Zach without paying the luxury tax. In fact it will be a challenge to find 8 serviceable players that will only cost us a total of $23 million, but I think the team will be good enough that some ring-chasing vets will be happy to play here at a discount. (Note...if Zach continues to improve at the pace he has the past year, we may determine that a wing tandem of Durant/Zach is preferable to Durant/Wig, and Wig becomes the player we choose to let go).

2019-20 is where things really get sticky, because we expect that KAT will command a max contract and Ricky will be up for a new contract too. I've gone through all sorts of different scenarios, but I can't find any logical way to keep both KAT at a max and Ricky without going over the lux threshold, unless Ricky is loving winning so much and is feeling sufficiently wealthy to give us a Duncan-like home team discount...not entirely beyond the realm of possibility, but probably not likely.

So my conclusion is that while we can afford to give Durant a max contract this summer, it will probably mean that we will have to let either Zach or Wig go in 2018-9 and most likely let Ricky go in 2019-20. Even if we don't sign Durant, it's pretty clear to me that there will not be room to keep all 4 of our potential stars (KAT, Wig, Zach and Ricky...assuming they all become what we think they will become) unless we choose to go with bargain basement players for the rest of the 11 players on the roster...especially if our pick #5 pans out.

My position is that as intriguing as adding a Durant this summer is, it presents too many issues down the road...I could be convinced otherwise, but I think I would pass.

Come on LST....is this a serious post? You are "potentially" not going to sign KD to a max deal because you may or may not lose out on Wiggins, Rubio or Lavine in 3-4 years? Really? Even if those guys hit their ceiling, they aren't Durant. Has it really come to this? We aren't even willing to offer a max deal to one of the top 4-5 players in the entire world because we want to be sure to be able to sign lesser players in the extended future?

Look, I like Wiggins and Lavine as much as the next guy....but this is crazy. There is no situation we could have that would make me even hesitate to sign KD for whatever we can. OKC went through this and had to let Harden walk. Your worrisome scenario is quite the same. And in the end, OKC has been just fine. They are unlucky in having to play in a brutally challenging Western Conference. Doesn't take away the fact that they have been an awesome team year after year, despite having to make some challenging roster moves.

Again...crazy talk:)

[longstrangetrip [enjin:6600564]]

As Lip laid out in his salary cap management thread, the Wolves current payroll for 11 players (including KG and the Martin buyout residual) is $62.5 million. They also have an option on Rudez at $1.2 million, which I'm going to assume they exercise for cap management purposes. Let's also assume they keep pick #5, and the salary hold for a 5th pick increases to $4 million. They are now at $67.7 million for 13 players, resulting in $24.3 million in cap space...not enough to offer Durant (or any other 7-9 year player) a max contract. What they would have to do then is either hope that KG opts out, or convince KG to defer opting in until after they have signed Durant and another free agent (let's say a backup PG for $3 million). After all this is done, they will have 15 players signed for $98.3 million, over the salary cap but well under the luxury tax threshold.

With the cap jumping up in 2017-18 and KG and other smaller contracts going away, the Wolves have some room to make some targeted free agent acquisitions...nothing close to a max, of course, but perhaps a couple vets that can fill some needs. Although cap room will be limited by the need to pay Gorgui.

2018-9 is where things get tough from a salary cap standpoint, even with the Pek contract going away, because the rookie contracts for both Wig and Zach expire, and they could be looking for big contracts. In addition Belly's value deal of $4 million per year will be over. I'm assuming that Bazz and Belly will be gone (just no way to fit their likely contracts in). If we assume a max contract for Wig, I estimate that our payroll will be $100 million for these 7 players...Durant, Wig, Rubio, KAT (still a bargain at $8 million), Gorgui, Tyus ($2 million) and this year's #5. Since we still have to pay 8 other players, it's clear that there will be no room for Zach without paying the luxury tax. In fact it will be a challenge to find 8 serviceable players that will only cost us a total of $23 million, but I think the team will be good enough that some ring-chasing vets will be happy to play here at a discount. (Note...if Zach continues to improve at the pace he has the past year, we may determine that a wing tandem of Durant/Zach is preferable to Durant/Wig, and Wig becomes the player we choose to let go).

2019-20 is where things really get sticky, because we expect that KAT will command a max contract and Ricky will be up for a new contract too. I've gone through all sorts of different scenarios, but I can't find any logical way to keep both KAT at a max and Ricky without going over the lux threshold, unless Ricky is loving winning so much and is feeling sufficiently wealthy to give us a Duncan-like home team discount...not entirely beyond the realm of possibility, but probably not likely.

So my conclusion is that while we can afford to give Durant a max contract this summer, it will probably mean that we will have to let either Zach or Wig go in 2018-9 and most likely let Ricky go in 2019-20. Even if we don't sign Durant, it's pretty clear to me that there will not be room to keep all 4 of our potential stars (KAT, Wig, Zach and Ricky...assuming they all become what we think they will become) unless we choose to go with bargain basement players for the rest of the 11 players on the roster...especially if our pick #5 pans out.

My position is that as intriguing as adding a Durant this summer is, it presents too many issues down the road...I could be convinced otherwise, but I think I would pass.

Come on LST....is this a serious post? You are "potentially" not going to sign KD to a max deal because you may or may not lose out on Wiggins, Rubio or Lavine in 3-4 years? Really? Even if those guys hit their ceiling, they aren't Durant. Has it really come to this? We aren't even willing to offer a max deal to one of the top 4-5 players in the entire world because we want to be sure to be able to sign lesser players in the extended future?

Look, I like Wiggins and Lavine as much as the next guy....but this is crazy. There is no situation we could have that would make me even hesitate to sign KD for whatever we can. OKC went through this and had to let Harden walk. Your worrisome scenario is quite the same. And in the end, OKC has been just fine. They are unlucky in having to play in a brutally challenging Western Conference. Doesn't take away the fact that they have been an awesome team year after year, despite having to make some challenging roster moves.

Again...crazy talk:)

Hmm... I thought I was providing a little value here. I don't think everyone here is knowledgeable about details of the Wolves' cap situation, 5-year projections for the cap and lux threshold, and specific ramifications of signing a max free agent this summer...I know I wasn't.

But having said that, I don't think it's so automatic that we would jump at a Durant deal if he were inclined. You seem to be analyzing this as a Durant vs. Wig or Zach choice, and if that were it, I would agree with you that Durant is the choice every time. But our cap situation makes it much more complex than that. I think both Belly and Bazz need to be let go before 2018-9 if we're going to have room for Wig's max, but we would also need to dump Gorgui before 2018-9 if we signed Durant. And if we didn't sign Durant (or someone else) to a max this summer, there would be room for other free agents on 3-year or shorter deals this summer...my choices would be Deng at about $13 million and Noah (if KG opts out).

So the choice comes down to this...in 2018-9 do you prefer just Durant, or a combination of Gorgui/Zach/Deng. As much as I love Durant, I like the combined contribution of Gorgui/Zach/Deng over the combined contribution of Durant and two guys on minimum deals. That's just me...I understand how someone could prefer Durant.

[thedoper]

Isn't Durant signing a two year max deal for now because the new CBA is likely going to go pro-players? That was why I thought the two year figure was being bantered about in his supposed potential OKC deal. I appreciate the work LST but the new CBA is going to render everything null and void. Michele Roberts is brilliant and the owners are in for it.

Philoshopically NBA teams can always be built around 3 stars and role players, you wheel and deal and players go. The fact is if we could lock up Durant, Wiggins, and Kat as our three we take it and run despite any salary implications. If Ricky wants to win he'd stay on a reasonable contract. No way does he become a max player and if he asks for it we find another point. If Zach evolves to something great then we make the tough but smart decision to trade him for a more complimentary piece. It's a good problem to have. GS had to trade Monta Ellis, I'm sure a number of their fans were up in arms at the time. Having a stable of high profile players is a great problem to have.