Cavs financial situation

[z_from_kc]

Alright guys I'm curious about something. I'm hearing all the free agency talk for this summer and all the rumors of who's going here and there to team up with so and so. I hear about Lebron possibly jumping to NY, NJ, Chi, Mia blah blah , and how so and so will have all this cap room. You know, all the crap we've been hearing since Bron took the short extension. But I never hear about Cle possibly bringing another star in to pair with Lebron. What will the Cle financial situation look like this summer?

[Triumph36]

We'll have no cap space except the MLE and BAE, neither of which will be able to bring in a star, just some role players.

However, we're aggressively trying to bring in a star via trade, so hopefully we don't even need to wait while LBJ enters the free agent market, and instead just sign him to an extension before free agency officially starts.

[heathmalc]

Alright guys I'm curious about something. I'm hearing all the free agency talk for this summer and all the rumors of who's going here and there to team up with so and so. I hear about Lebron possibly jumping to NY, NJ, Chi, Mia blah blah , and how so and so will have all this cap room. You know, all the crap we've been hearing since Bron took the short extension. But I never hear about Cle possibly bringing another star in to pair with Lebron. What will the Cle financial situation look like this summer?

The Cavaliers will have approximately 5 million dollars to spend, assuming our 1st round pick isn't traded away or that we don't buy or trade for another 1st rounder, which is possible due to the depth this draft has in front-court players.

We'll also have the Bi-annual exception if we do not use it after the deadline this year.

As the previous poster said, and as I am sure you are aware of, there is a good chance that the Cavaliers will make a trade before the deadline. If this is done, and the player we trade for is not expiring, then we will not have the 5 million(obviously), but we will have the Mid-level exception, which will likely be around 4.7 million.

Since both Shaq & Z are free-agents after this season, it makes more sense for the Cavaliers to make a trade before the deadline, because if they do not, then we re-sign Shaq &/or Z to contracts, that eats up our available cap space and we cannot sign any other players for anything over the league minimum as we will not have the MLE, as that is only for teams over the cap. However, if we do make a trade, and the player that we trade for makes more than what our projected cap-space will be, then we will have the MLE, and still be able to sign our FA w/o it affecting our ability to sign another role player or two.

LeBron will not likely sign an extension, as it makes no sense for him (he can get more money, and more years by just re-signing with us as opposed to signing an extension). The only way LeBron does sign an extension, is if he decided he'd only re-sign for 3-years (which a lot of people think he'd do anyway). However, that also doesn't make sense, because the new CBA is sure to lower the max contracts that players can get in the future. Since this is all but a given, it is more likely that LeBron will re-sign with the Cavaliers for a max 6 years, and max out his salary, thus keeping him from having to deal with any of the new agreements in the new CBA. LeBron also will demand, and receive a "no-trade" clause. Not that the Cavaliers would ever trade him anyway.

As for your question about a superstar joining LeBron in Cleveland... It is possible, but unlikely, as the Cavaliers won't likely have the type of contract and player(s) needed to get that type of trade done. There is a chance of it happening though it is slim, which is why there hasn't been much talk of the possibility.

[JonFromVA]

Nobody knows where the salary cap will be set, but we do have the option to buy Delonte out of his contract, and if LeBron walks - it'll free up his salary to spend.

Most likely we'll want to keep Shaq's Bird rights and if we do that, we won't have any cap space to spend.

[landphil]

As Heath said, it is unlikely we could sign a superstar in free agency so the most likely way to get a superstar in here would be to make a deal for one at the trade deadline this year. Remember, as Jon said, we have bird rights for Shaq, Z, and anyone else we trade for that has been with their current team for more than 3 years. This means we can sign any of those guys, even if it takes us over the cap. We will have to pay the luxury tax but we already pay 14 mil the last 2 seasons so I think Gilbert would do it again obviously. I think its likely that if we deal Z for a guy, say Jamison or Amare, that we would resign shaq and the new guy if it worked out and try to resign Z during the season after he got waived if that is what would happen.

Also I doubt we are going to buy delonte out of his contract, as I see no possible advantage to that happening. We have everyone resigned except those Lebron Shaq, Jawad, and Powe and Z, all of whom we can sign by going over the cap because we either have bird rights or qualifying offers (Jawad) or team options (powe) so if this team keeps performing, its not out of the question to see a very similar team back next year.

I know I have posted this before but a great site for salary cap stuff is http://members.cox.net/lmcoon/salarycap.htm

[Triumph36]

Nobody knows where the salary cap will be set, but we do have the option to buy Delonte out of his contract, and if LeBron walks - it'll free up his salary to spend.

Most likely we'll want to keep Shaq's Bird rights and if we do that, we won't have any cap space to spend.

Seems like there's a higher chance of trading Delonte rather than buying him out.

And we might have cap space but nobody would want to come here, heh.

[JonFromVA]

Seems like there's a higher chance of trading Delonte rather than buying him out.

And we might have cap space but nobody would want to come here, heh.

Definitely. The MLE and BAE is worth more than whatever cap space we could reclaim by buying him out, but again, it depends where the salary cap lands. Let's say we find ourselves $3.4m under the cap and Shaq decides to retire ... if we buyout West, then we'd be about $8m under the cap and could potentially get a very nice player left behind after all the teams with max money have spent.

In a trade, he's essentially another expiring we can throw in, but then again so is Wally. We may need him to help make a deal work. We may not.

Much ultimately depends what our frustration level is at with him, there are other players who could be holding down his roster spot and/or minutes that we wouldn't have to worry whether they're mentally going to show up from game to game. It'd be nice to get Danny Green more minutes next season. It looks like he could handle it. And Gibson shouldn't be glued to the bench, either.

[z_from_kc]

Thanks for the info guys. I just want a dynasty for LeBron and I want it in Cleveland. I don't have any ties to Cleveland but it just feels right. As long as they keep a solid cast around him they have a chance to win it any given year because the guy is that damn good and still improving. I just shudder to think what he could do next to a true superstar. I feel everything will work out though. I just can't see him walking.

[old skool]

I don't think that you can ignore that the Cavs are already very close to losing money. They can't afford to take on salary like some of the more profitable NBA teams, like Chicago, New York, or Detroit.

Despite being sixth in the NBA in total revenue, their payroll and debt service has them in the bottom half of the league in profits at $5-million last year. That is a reality that won't go away easily. Whatever they do at the trade deadline has to make business sense as well.

Maybe Gilbert has some dollars set aside to cover an operating loss, but I find that unlikely, as the franchise is $200-million in debt. If the Cavs start to lose money, he just gets deeper in the hole.

oLd sKool

[midgman8421]

Surprise surprise, HEATH IS WRONG AGAIN!

The Cavs, most likely, will not have any cap space. If we are under the cap by any amount, it will be used to re-sign our free agents. However, ALL TEAMS HAVE THE MLE. YOU DON'T HAVE TO BE OVER THE CAP. HEATH, STOP YOUR LIES. WE'RE ALL **** SICK OF IT.

The Cavs will have the MLE, and it would make no sense to renounce it. If we trade away Z and he gets bought out, we'd likely use the MLE to sign Z this offseason because we wouldn't have his bird rights.

[old skool]

All salary cap exceptions are added to the team's salaries for cap purposes. As a result, if the MLE is $5.5-million and the Cavs are $5-million under the salary cap, they can only spend $5.5-million on free agents. This is true of all salary cap exceptions, included the bi-annual exception and trade exceptions.

If the Cavs are far under the cap, they can lose their exceptions. If the Cavs are $10-million under the salary cap, they automatically lose their MLE for that season. The MLE is not intended to be in addition to the salary cap. It is an exception to the salary cap limit.

This is why the Knicks are so focused on freeing up so much cap space. They can't use cap space AND the MLE to sign free agents. One or the other. Not both.

oLd sKool

[Furrski]

I don't think that you can ignore that the Cavs are already very close to losing money. They can't afford to take on salary like some of the more profitable NBA teams, like Chicago, New York, or Detroit.

Despite being sixth in the NBA in total revenue, their payroll and debt service has them in the bottom half of the league in profits at $5-million last year. That is a reality that won't go away easily. Whatever they do at the trade deadline has to make business sense as well.

Maybe Gilbert has some dollars set aside to cover an operating loss, but I find that unlikely, as the franchise is $200-million in debt. If the Cavs start to lose money, he just gets deeper in the hole.

oLd sKool

From everything I've heard Gilbert is not afraid to take on money. We know he's not in the business of losing money, but this team is like his 'toy'. He wouldn't have swooped in and bought the team if he couldn't afford to. He will do everything in his power to keep LeBron happy as shown by the green light to pursue Amare (smokescreen or not). He has a strong influence on the casinos coming into Cleveland, doesn't that have an effect on the Cavs?

[nolimitation]

I'm not sure how cap space works and I see all these teams lining up for Lebron. However I was wondering can Cavs sign Lebron above cap space and not get hit with luxury tax? Doesn't the Cavs own his bird rights?

[mcfly1204]

I'm not sure how cap space works and I see all these teams lining up for Lebron. However I was wondering can Cavs sign Lebron above cap space and not get hit with luxury tax? Doesn't the Cavs own his bird rights?

Owning LeBron's Bird Rights enable the Cavs to sign LeBron to a contract that puts them over the salary cap. There is no forgiveness for exceeding the Luxury Tax Limit though. If you're over it, you're paying.