Minnesota Sports Forum

The interesting discussion in another thread about pursuing Durant caused me to put pencil to paper to analyze the implications for the Wolves. In researching future cap estimates, I learned some interesting things I didn't know before...namely that the dramatic increase in the cap this year and next is expected to abate and even decrease in 2018-19. I apologize in advance for the length of what I am about to type, but the issue is just too complex to discuss briefly. Those whose eyes are prone to glazing over should bail out now. I will probably divide this into two posts: projected salary cap and lux tax for the next 5 years, and implications of signing a player like Durant to a max contract this summer. Spoiler alert: although I have been warning against signing a player to a max contract this summer because it means at least one of our 3 young studs will have to go before 2019-20, I make an exception for Durant, because I believe a move like that immediately puts us in the mix.

The salary cap is determined every year by means of a complicated formula based off of total NBA revenues from all sources. Because of the difficulty in projecting what future revenues will be, future salary cap is only an estimate...it is set every year based on actual results. We all know that the new TV contract is the reason the cap is expected to jump nearly $20 million both this year and next, but for a variety of reasons, revenues are projected to level off after that. Here is the best estimate I can find for salary cap and luxury tax levels for the next 5 years:

2016-7: $92 million $108 million
2017-8: 109 129
2018-9 102 123
2019-20 104 126
2020-21 109 133

Here is how max contracts are determined:

Players with 0-6 years: 25% of cap
7-9 years: 30%
10+ years: 35%

So, signing a 8-year player like Durant or Horford to a max contract this summer would cost a team $27.6 million per year, while a similar contract next year will jump to $32.7 million per year. The first home-grown Timberwolf seeking a max contract will likely be Wig (and possible Zach) in 2018-9, and this is actually good news for the Wolves' salary cap. Because they will not have 7 years yet, their max contract is estimated to be ($102 million X 25%) or $25.5 million. When KAT and Rubio are eligible for max contracts the following year, their max amounts will be $26 million and $31.2 million, respectively (Rubio's max is higher because he will be a 7-9 year player).

OK, with that base of information, I'll go on to my next post which will analyze the implications of pursuing a free agent like Durant this summer.

With the caveat of a new CBA hopefully after next year where if I was a betting man players will benefit.

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.

Great work, LST. You explained the likely finagling the Wolves would have to do in the future if they were to sign a player to a max contract this off-season.

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.

The big thing to remember and you unintentionally highlighted it is this. We won't even be capable of making a move like this in the future. This is likely the only off-season in a good while where we'll have the ability to add an All-Star player. Next summer and on into the future, that's not even an option. I still say we should take advantage of it and make a big splash if one of the two previously named free agents want to come here.

Camden wrote:Great work, LST. You explained the likely finagling the Wolves would have to do in the future if they were to sign a player to a max contract this off-season.

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.

The big thing to remember and you unintentionally highlighted it is this. We won't even be capable of making a move like this in the future. This is likely the only off-season in a good while where we'll have the ability to add an All-Star player. Next summer and on into the future, that's not even an option. I still say we should take advantage of it and make a big splash if one of the two previously named free agents want to come here.

Yeah, I agree that this summer is our best chance to sign a free agent to a max contract, but I still haven't concluded on whether I'm in favor of signing Durant or not. Unlike some others here, I think he makes us an instant contender this year and perhaps a favorite in 2017-8. As an instant gratification guy, that's pretty exciting for me. But I'm also really high on Wig and Zach and expect both of them to command big, if not max, contracts after their rookie deals are done, and I can't find any logical way to keep them both for 2018-9, or to keep Ricky the following year...and that's a difficult outcome for me to accept.

But I'm open to more creative cap solutions that don't force us to get "Hardened" in 2 years...maybe somebody can come up with a solution that keeps us under the 2018-9 lux tax without completely gutting the team.

Re-signing Dieng and then trading him when the time is necessary would be one part of that solution. He's less vital to the team than any of Durant/Horford, Towns, Wiggins, LaVine or Rubio. He's also turning 27 this year so by that time he'd be approaching 30. That would be common sense, IMO.

Thanks for all that info LST. You make a pretty good case that we should revert back to the more serious topics of Deng/Noah and who we should draft at #5. :thumb:

If and that's a big if, the Wolves could sign Durant and all of the pups reach their full potential, a few trades would need to be made or Glen would need to pony up and pay the luxury tax for a season or two. He'll be pushing 80 years old by then and will likely be worth more than $2 BILLION. You can't take it with you - what's a few million dollars of tax compared with multiple titles? IMO If you can land Durant you do it and figure out the Cap when you have to.

Camden wrote:Re-signing Dieng and then trading him when the time is necessary would be one part of that solution. He's less vital to the team than any of Durant/Horford, Towns, Wiggins, LaVine or Rubio. He's also turning 27 this year so by that time he'd be approaching 30. That would be common sense, IMO.

I agree that Gorgui is less vital, but wouldn't we have to take a comparable amount of salary back in trade? Or is there a rule that you don't have to take back comparable salary if you are over the cap? I have Gorgui in my analysis at $12-15 million and thought about not bringing him back after his rookie contract expires to leave room for both Wig and Zach. I like G, but that has to be considered.

If you can sign Durant you do it and worry about the rest later and yes KG would instantly retire if it meant we would get KD. He's gonna be a minority owner so 8 million is nothing compared to what he'd be worth owning part of a team that contends for titles year in and year out. People are worrying about a luxury tax hit that won't happen until Towns' deal is up and you only get the punitive luxury if you are a multiple year offender so we are talking about 1 year with a big bill and then you figure it out from there when Durant's deal is up. But for now people are putting the cart in front of the horse.