RealGM Wolves Capology

[minimus]

I think this is a little hard for most people to understand, so let me see if I can get to the crux.

Towns has signed an extension, but unlike most contracts that would contain a specific number, his would say “35% of the salary cap in 2024-25.” The new TV deal that would boost the BRI and hence the salary cap, hits in 2025-26. Unfortunately for Towns, the CBA limits raises to 8% each year. So while the first year of his extension will be 35% of the cap, the next year raise will be far less than the growth of the cap, so he will be well below 35%.

So to answer your question, yes, compared to teams that are signing players to new deals, we will likely have bargain contracts.

Math Example, with some rough numbers:

2024 Salary Cap comes in around $175 mil. Towns extension is $50 mil, 35% of the cap.

2025 the TV Deal hits. The NBA applies cap smoothing, say $50 mil each over the next two years, but the Salary Cap still rises to, say, $225 and $275. Star players getting new deals who are eligible for 35% of the 2025 and 2026 cap would get contracts starting at $78.75 and $96.25. Towns deal will only be $54 and $58.

Now I can relate why Towns has last year as player option...

[minimus]

How about MCD, Edwards extensions next year? Will their salary be fixed after cap raise? I understand that if MCD gets not max extension his salary wont be scaled, but Edwards will for sure get max

Edwards and McDaniels will both be extension-eligible in 2024, before the cap spike, so they are in the same boat as Towns. But like you mention, this mainly applies only to Edwards, since he will get a max based on a percentage of the current cap.

I expect both to sign extensions - guys on rookie scale want to get big time guaranteed money, in case of an injury. What you might see with other players though is that they may try to sign shorter deals that can end in 2025, so they can get bigger next time with so many teams with so much cap space.

shrink, I cant thank you enough! But can I ask one more question... Lets speak about whole picture: we have very unique situation:

1) we two young stars Ant and MCD on rookie contracts for two more full seasons AND we have two superstars on max deals (although technically Gobert deal is less than max). I wonder whether the concept/idea of how our roster is constructed salarywise is short of GENIUS and actual implementation is a CBA MASTERPIECE. It is rare but absolutely doable, I can remember PHO with CP3, Booker and rookie deals Bridges, Ayton, MIA with Bam, Butler and Herro, Robinson. Both teams went to Finals (with a bit of luck), with young stars on rookie contracts. Both teams still "ride that wave", both dont have same level of success, but reaching Finals for MIN will be a meteoric rise in any case. God, we have just kind of played our first playoff series since 2008.

2) Ant and Towns extensions will kick before new deal, it is also first year of multiyear deal, it means THE CHEAPEST year

3) when in 2025-26 new TV deal kicks in, we basically will have our core three players locked for multiyear deals. If cap raises 30%, than basically we have three main contracts with 30% discount? + last year of Gobert contract with 30% discount as well

P.S. I might sound too optimistic, please feel free to throw any facts that might bring me back to the earth!

[shrink]

You’re right, we are in a really good position cap-wise. I wouldn’t call it genius, since we lucked into getting the #1 pick in the lottery, in years where we can extend them exactly one season before the big TV deal spike.

However, one extra advantage is that the Gobert trade will increase our wins, so it has the added benefit of improving our desirability for free agents. It’s nice to have the extra cap space, but when many teams have extra cap space, MIN used to be at the bottom of the list to get someone good to come. If this year’s free agency is an indication, we now have the opportunity to attract good free agents without overpaying. So that’s definitely a reason to be excited!

For the first time in a long time, MIN’s future isn’t dependent on getting lucky in a lottery. It will be based on winning games, and it looks to me like we have a good chance to win a lot of games. I’m excited too, about this year and the next half decade, and the finances are on our side.

[minimus]

You’re right, we are in a really good position cap-wise. I wouldn’t call it genius, since we lucked into getting the #1 pick in the lottery, in years where we can extend them exactly one season before the big TV deal spike.

However, one extra advantage is that the Gobert trade will increase our wins, so it has the added benefit of improving our desirability for free agents. It’s nice to have the extra cap space, but when many teams have extra cap space, MIN used to be at the bottom of the list to get someone good to come. If this year’s free agency is an indication, we now have the opportunity to attract good free agents without overpaying. So that’s definitely a reason to be excited!

For the first time in a long time, MIN’s future isn’t dependent on getting lucky in a lottery. It will be based on winning games, and it looks to me like we have a good chance to win a lot of games. I’m excited too, about this year and the next half decade, and the finances are on our side.

Interesting thing is that in 2016 cap spike + many teams with desire to spend money resulted in many bad contracts:

Nicolas Batum (five years, $120 million), Hassan Whiteside (four years, $98.4 million), Chandler Parsons (four years, $94.4 million), Ryan Anderson (four years, $80 million), Allen Crabbe (four years, $74.8 million), Joakim Noah (four years, $72.6 million), Luol Deng (four years, $72 million), Bismack Biyombo (four years, $72 million) and Timofey Mozgov (four years, $64 million)

+Gorgui Dieng

And I hope MIN in 2024/25 will be in much better position, I mean Thibs kind of HAD to overpay FA to come here. And as you mentioned MIN might change this narrative and have FA for fair contracts

[Klomp]

Interesting thing is that in 2016 cap spike + many teams with desire to spend money resulted in many bad contracts:

Either teams just getting their first taste of success and trying to keep everyone happy (the Hernangomez method), teams trying to keep a star happy (the Hudson method) or teams having to overpay to get someone to their traditional loser franchise (the Teague method).

[Klomp]

I'm not sure if there's been much talk about the picks we added. Here's how the cupboard is filled at the moment, with the bolded added at the deadline.

2023: NYK 2nd
2024: Own 1st, WAS/MEM 2nd
2025: UTH 2nd
2026: Own 1st (swap possible), SA/IND/MIA 2nd
2027: None
2028: Own 1st; Own 2nd
2029: Own 2nd

[shrink]

So after this trade deadline, you’re saying if we put all nine 2nds together, we can trade them for a bench player?

[theGreatRC]

So after this trade deadline, you’re saying if we put all nine 2nds together, we can trade them for a bench player?

How do we get Pat Bev on this team?

[Klomp]

So after this trade deadline, you’re saying if we put all nine 2nds together, we can trade them for a bench player?

Just to clarify (if it's unclear for shrink, it might be unclear for many more)...

We don't have 9 2nds from now through 2029.The 2024 and 2026 2nds are "lesser of" picks....

[shrink]

So after this trade deadline, you’re saying if we put all nine 2nds together, we can trade them for a bench player?

Just to clarify (if it's unclear for shrink, it might be unclear for many more)...

We don't have 9 2nds from now through 2029.The 2024 and 2026 2nds are "lesser of" picks....

I bet I was the only one dumb enough to not notice 1sts in there!

[shrink]

Read on Twitter

[Klomp]

Read on Twitter

Sent from my iPhone using Tapatalk

[shrink]

13 Players Rostered

1 Rudy Gobert $ 41,000,000
2 Karl-Anthony Towns $ 36,016,200
3 Mike Conley Jr. $ 24,360,000
4 Anthony Edwards $ 13,534,817
5 Naz Reid $ 12,950,400
6 Kyle Anderson $ 9,219,512
7 Shake Milton $ 4,878,049
8 Nickeil Alexander-Walker $ 4,326,923
9 Troy Brown Jr. $ 3,902,439
10 Jaden McDaniels $ 3,901,399
11 Wendell Moore $ 2,421,720
12 Jordan McLaughlin $ 2,320,000
13 Josh Minott $ 1,719,864
(Plus our second round picks)

Total Payroll $ 160,551,323

Luxury Threshold at $165,294,000

The Timberwolves signed Troy Brown Jr. to two years, $8M, and Shake Milton to two years, $10M. Both could fit into the mid-level exception. They also re-signed Nickeil Alexander-Walker to two years, $9M

[younggunsmn]

Was curious about our '24/25 cap situation so I ran some numbers.
I'm assuming that the salary cap will go up the maximum 10% next year, and along with that also the tax levels.
I'm penciling in an extension for Ant which assumes he does not meet supermax criteria,
and an extension starting at 27.5 million for Jaden.
I'm assuming he will get slightly higher than the 4/108 Cameron Johnson just signed with the Nets

2024/25 Estimated Salary Cap 149.523,100
2024/25 Estimated Luxury Tax 181,823,400
2024/25 Estimated 1st Apron 189,580,600
2024/25 Estimated 2nd Apron 201,073,400

2024/25 Estimated 25% Max (0-6 yrs) 37,380,750
2024/25 Estimated 30% Max (7-9 yrs) 44,856,930
2024/25 Estimated 35% Max (10+ yrs) 52,333,085
2024/25 Estimated 2 Yr vet min 2,220,984

Guarantees:
1. Towns 52,333,085
2. Gobert 43,827,586
3. Edwards 37,380,750
4. McDaniels 27,500,000 (estimate)
5. Reid 13,986,432
6. NAW 4,600,000
7. Moore 2,537,000
8. Minott 2,019,699
9. Miller 1,800,000
Total 185,984,552

+ 5 vet mins 11,104,920
Total 197,089,472

Player Options:
Milton 5,200,000
+2,979,016 than a vet min
Brown Jr 4,100,000
+1,879,016 than a vet min

Draft Picks
Own 1st rounder
2nd, lesser of Mem/Washington

Free Agents
Conley (unrestricted, bird rights)
Anderson (unrestricted, early bird rights)
Garza (2-way restricted)

1. Towns 52,333,085
2. Gobert 43,827,586
3. Edwards 37,380,750
4. McDaniels 27,500,000 (estimate)
5. Reid 13,986,432
6. Milton 5,200,000
7. NAW 4,600,000
8. Brown Jr 4,100,000
9. 1st round pick 4,000,000 (estimate, early 20s pick)
10. Moore 2,537,000
11. Minott 2,019,699
12. Miller 1,800,000
13. 2nd round pick 1,800,000 (estimate, 3 year Hinkie)
14. Vet min 2,220,984

203,505,536

So we are looking at being right up against/over the highly punitive 2nd tax apron,
over 20 million into the luxury tax.
No hope of using even the taxpayer MLE.
And that's before even thinking about re-signing Anderson or Conley.
And if Edwards meets supermax criteria, his extension will start about 7.5 million higher.

So we could technically run this team back, it' would just cost a LOT of money.

I'm not going to run the 2025/26 numbers, but they will probably be about right along the same lines with the raises in the big 4 deals roughly cancelling out the 10% max bump in the cap
Naz will have a player option for that cap year, and NAW, Milton, and Brown would all be unrestricted free agents.
We will have no 1st round pick that year and have Utah's 2nd rounder.

[shrink]

Thanks for making this - it’s tremendously valuable here. I’d give it more than a +1 if I could.


Only little thing I’d mention is this

I'm not going to run the 2025/26 numbers, but they will probably be about right along the same lines with the raises in the big 4 deals roughly cancelling out the 10% max bump in the cap.

Maximum raises are limited to 8% on that first year’s base salary, so a 10% rise in the cap will create a little more wiggle room, and each deal will become a lower percentage of the cap.

[younggunsmn]

Thanks for making this - it’s tremendously valuable here. I’d give it more than a +1 if I could.


Only little thing I’d mention is this

I'm not going to run the 2025/26 numbers, but they will probably be about right along the same lines with the raises in the big 4 deals roughly cancelling out the 10% max bump in the cap.

Maximum raises are limited to 8% on that first year’s base salary, so a 10% rise in the cap will create a little more wiggle room, and each deal will become a lower percentage of the cap.

No problem. Yes that would help a little bit. Conversely, if we don't get a big cap bump in '25 and it stays flat, it will be catastrophic.

I see these numbers, and I have a hard time seeing ownership pay for this without a whole lot of success.
Maybe conference finals minimum to keep KAT and Rudy together past this coming year.

I have an opinion that the skyrocketing values of sports franchises have little to do with the actual profitability of the sports, and are mostly due to the exploding number of billionaires over the past 25 years (due to the explosion of the tech sector and runaway inflation) chasing a finite supply of pro sports teams.
There are simply many more people who can afford to bid.
Sports teams are a status symbol for them.
Back when Taylor bought the wolves in the 90's, there weren't a whole lot of people who could come up with 94 million let alone 1.5 billion.

And most teams operating expenses are financed with loans against these valuations and operate at a loss.
The owners use that as tax writeoffs for their other businesses.
People are cord cutting and outside of big markets, regional sports networks can't make enough to pay the rights fees.
Where is all the money coming from?
It makes me nervous about this franchise, I don't see us paying 20+ million a year in luxury tax.
We are taking a big risk not moving KAT while we still can, I don't want it to turn into a pennies on the dollar situation.

[shrink]

No problem. Yes that would help a little bit. Conversely, if we don't get a big cap bump in '25 and it stays flat, it will be catastrophic..

With a big new TV deal coming in 25, that will likely include selling games not only to the big networks but streaming services, the NBA is in fine shape for the next few years. In fact, since the new CBA included cap smoothing, experts pretty much guarantee full 10% salary cap increases for the next 4 years at least while they absorb the big increase in revenues. The big spending on a mostly mediocre free agent class that we saw this year is going to continue for a long time.

[younggunsmn]

No problem. Yes that would help a little bit. Conversely, if we don't get a big cap bump in '25 and it stays flat, it will be catastrophic..

With a big new TV deal coming in 25, that will likely include selling games not only to the big networks but streaming services, the NBA is in fine shape for the next few years. In fact, since the new CBA included cap smoothing, experts pretty much guarantee full 10% salary cap increases for the next 4 years at least while they absorb the big increase in revenues. The big spending on a mostly mediocre free agent class that we saw this year is going to continue for a long time.

I agree, 10% bump is most likely scenario. In this economy with inflation the way it is and is likely to continue into the future, if you're not growing at 10%, you're shrinking. Revenue goes up, doesn't necessarily mean profit margins do too.
And high interest rates make borrowing more costly to finance.
Look at all the trouble baseball is having with their tv revenue. Ad business models are showing a lot of weakening.

I just want to be able to watch all the wolves games on one streaming service.
If they pull the crap that baseball is this year, where this game is only on peacock, and that game is exclusive to apple tv, and the next game is exclusive to youtube tv, I may as well just quit watching. I'm not paying for all that.

And if they can't salvage the regional sports model, that's exactly what is going to happen.
Nickeled and dimed to death.

Anyways, as all this relates to the wolves,
I don't want it to get to the point where ownership says its time to cut costs, and we sell a premium asset or 4 for pennies on the dollar.
That fiasco where Kahn traded down 4 times for enough cash to fire his coach, I don't ever want to see anything like that again.
And Mark and Alex can be great guys with the best intentions, every owner has their limit, and the only sure thing in life is change.

[younggunsmn]

Filling in some blanks now, with hoopshype stating Milton and Brown are a straight 2x5 and 2x4 and not ascending.
The also have NAW as having a descending contract.
I'm guessing to save on the tax bill next year.
Also slotting Miller in now that his contract is known.

1 Rudy Gobert $ 41,000,000
2 Karl-Anthony Towns $ 36,016,200
3 Mike Conley Jr. $ 24,360,000
4 Anthony Edwards $ 13,534,817
5 Naz Reid $ 12,950,400
6 Kyle Anderson $ 9,219,512
7 Shake Milton $ 5,000,000
8 Nickeil Alexander-Walker $ 4,687,500
9 Troy Brown Jr. $ 4,000,000
10 Jaden McDaniels $ 3,901,399
11 Wendell Moore $ 2,421,720
12 Jordan McLaughlin $ 2,320,000
13 Leonard Miller $$1,801,769
14 Josh Minott $ 1,719,864

Total: 162,933,181
Luxury Tax: 165,294,000

Space below tax: 2,360,819

2 way players:
Garza
Clark

Gobert has 2 million in incentives in his contract too:
Rudy Gobert's contract includes an All-Defensive 1st Team bonus for $500,000, a $1,000,000 bonus for making the All-Star Game and two bonuses worth $250,000 each that factor in defensive rating and rebounds per game, according to Bobby Marks.
While unlikely to earn them all, could throw a wrench in things.

[Klomp]

Filling in some blanks now, with hoopshype stating Milton and Brown are a straight 2x5 and 2x4 and not ascending.
The also have NAW as having a descending contract.
I'm guessing to save on the tax bill next year.
Also slotting Miller in now that his contract is known.

Hmmm, that's the only place I've seen that listed. Interesting if true.