Cap space is irrelevant in 2010

[ritt0093]

Ok, now that I have your attention, and most likely given shrink a heart attack, let me explain what I mean by the thread title. Please note that this is not a small/cold market kind of argument. Most of the argument below applies to every team in the 2010 FA bonanza

There will be 4 opportunities to improve this team.

1) Draft
2) Free Agency
3) Trades
4) Sign & Trades

Draft:
Obviously the draft and cap space are irrelevant of each other, so hopefully I have no arguments yet.

Free Agency:
Ah yes, we are creating cap room to enter the big game of free agency. To make things easier I will define three tiers of players.

Tier 1 (Max Contract):
Lebron James, Dwayne Wade, Chris Bosh, Amare Stoudemire

Tier 2 (75-95% Max Contract):
Drik Nowitzki (ETO),Rudy Gay, Joe Johnson

Tier 3 (Bargin Bin):
rest of the league


Tier 1 are the guys that everyone knows about, and are creating this big push for teams to be able to offer a max contract for. Honestly, I don't see Wade leaving Miami, and I don't see Lebron leaving Cleveland, but lets just assume that all 4 of these guys are truly available. Cap space is irrelevant because the market value is already set for these players. Everyone knows what their contract is, and the only team that can offer more is their own team. Of course we could be talking about a sign and trade then, but we'll get to that a little later. So if you want King James, you better be be able to say "hey we know the money is the same as these 8 other teams, but here is why you should come here. (Note: Glen Taylor should not be in the room when this is discussed, see Smith, Joe.)

Tier 2 is where two players commonly mentioned on this board (Gay and Johnson) are listed. Now my argument stems off the fact that the Wolves are not yet in a position where overpaying for talent is appropriate. If we were the Lakers, Magic, Celtics, etc. then overpaying market value is defensible in certain situations. However, we are still growing and a tier 2 player would not change that. He might accelerate it by a significant amount, but would not change it instantly. Therefore we ideally want to pay a max of market value of market +5%, anything more and I think you hinder more than help. Cap space is irrelevant again, because with these players, assuming you don't want to get stuck in an Elton Brand/Baron Davis/Gilbert Arenas like contract, everyone can/will offer the same amount. So you either need to be comfortable overpaying relative to the market, or be able to sell the free agent on your 8.5 mil/year over someone else's 8.5 mil/year. Please also note that just like us, every team could overpay if they found a guy they really thought was worth it, and that the market was undervaluing them.

Tier 3 is the tier no fan base wants their primary FA acquisition to come out of so we'll leave it alone. If the big signing/change to the team is someone like Pryzbila (nothing against him) I think many will be disappointed.

Trades:
Yes, in most years being under the cap is a very large asset compared to other teams. It allows you to offer raw cap relief to other teams and therefore increase the net value of your trade offer without giving up talent. The problem with 2010 is that with so many teams under the cap, it really depresses the relative value of the cap space. Yes, it is still valuable to the team trading away the player, but instead of their being only 1 or 2 teams with massive cap space there will be what, 10? So now your cap space is irrelevant because too many other teams have it for it to be a unique bargaining chip in a trade market. Sure you could reduce a trade market from 30 teams to only the 10 that have cap space, but 10 is still far too many to really get much value out raw cap space. So tell me fellow wolves fans, if you want someone like Iggy for example, knowing that your cap space is just the price to get to the negotiating table, which piece do you give up? Love? Jefferson? Flynn? top 5 draft pick? Rubio? (Note: the number may not be 10, but it certainly will be closer to 10 than 2, so the issue still exists.)

Sign and Trades:
Ok, so we can go to King James and say we're willing to make a deal with Cleveland to get you the biggest deal possible. Anyone think that this would be a strategy unique to our team? Me neither. So we're back to the free agent scenario where the financial terms are already fixed and known, and cap space is irrelevant.


Ok, now all of this is not to say that the wolves can't/won't sign a big time free agent or make a blockbuster trade. This is just to say that the reason we won the free agent over or got the team to agree to a deal with us is not because of cap space. So rather than saying we can pay X amount of dollars, we need to figure out how we sell our team/franchise as the place to win in the future. There are certainly arguments, but there are definitely arguments for other teams as well. All in all it should be very fun, because it truly will be a market where the old player quote "it's about winning, not about the money" will finally be proven true. Not because players care less about their finances, just that the money is a given and everyone has it.

[Narf]

So what you're saying is, LeBron, Wade, Bosh, Dirk, et al can sign a max level contract with any team that they want!

Got it.

[ritt0093]

So what you're saying is, LeBron, Wade, Bosh, Dirk, et al can sign a max level contract with any team that they want!

Got it.

Obviously not. However they can sign a max contract with any of their current teams, and any team with cap space. In total that is practically half the league. So if half the league can offer a max contract you better be able to sell them on something other than money. My point is cap space is not the big barganing chip we feel it is. Everyone has it! That means it is assumed it will be used. In order to get the player/ make the deal you have to offer something that beats every other team's offer. Since cap space/ money is so common we need to be more creative.

[Narf]

So what you're saying is, LeBron, Wade, Bosh, Dirk, et al can sign a max level contract with any team that they want!

Got it.

Obviously not. However they can sign a max contract with any of their current teams, and any team with cap space. In total that is practically half the league. So if half the league can offer a max contract you better be able to sell them on something other than money. My point is cap space is not the big barganing chip we feel it is. Everyone has it! That means it is assumed it will be used. In order to get the player/ make the deal you have to offer something that beats every other team's offer. Since cap space/ money is so common we need to be more creative.

And my point is that Wade said publicly that he's not going to sign with a team unless he thinks it can win a championship, and he was clearly talking about Miami.

LeBron could have signed a contract with Cleveland, they would do just about anything he asked them to do. He has not yet.

These guys are not becoming free agents just to sign with their own team in the off season. If they were content with where they were at, they would have signed there already. The point of having cap space is MOST TEAMS DON'T. Only a few teams have a chance to sign a max level free agent, and we have a very well put together young team to go along with that cap space.

Beyond that, LeBron can't just work a sign and trade with anyone either. Only a few teams have the raw cap space that Cleveland would want in a sign-and-trade. The Lakers would have to give back talent to get Bosh, so it's a Bosh/Bynum swap or something like that. That's what raw cap space does for you, it allows you to keep your own assets while acquiring others.

[Narf]

I'm not saying we will sign a max contract either, I'm rather doubtful that we will. I'm just saying it's more valuable than you are making it out to be.

[ritt0093]

The point of having cap space is MOST TEAMS DON'T. Only a few teams have a chance to sign a max level free agent, and we have a very well put together young team to go along with that cap space.

I completely agree that most teams don't have the cap room to offer the max deals and that is a huge help to the wolves. So it takes the potential suitors from 30 teams to about 12 (i'm just using a rough guess, if someone has a nice list please share it). If this was a more normal year and there were only 3 or 4 teams with max contract kind of cap space, then your argument would be even stronger. So while its great that 18 teams have been eliminated from the discussion there are still are huge number of teams in the mix. So cap space only gets you to the table, the problem is being distinct among the teams that have the space.

For the record I also agree with you on the young nucleus argument. I also think Kahn's idea of bringing in a development coach and stressing that, is a really creative way of trying to be different than other franchises.

[Narf]

The point of having cap space is MOST TEAMS DON'T. Only a few teams have a chance to sign a max level free agent, and we have a very well put together young team to go along with that cap space.

I completely agree that most teams don't have the cap room to offer the max deals and that is a huge help to the wolves. So it takes the potential suitors from 30 teams to about 12 (i'm just using a rough guess, if someone has a nice list please share it). If this was a more normal year and there were only 3 or 4 teams with max contract kind of cap space, then your argument would be even stronger. So while its great that 18 teams have been eliminated from the discussion there are still are huge number of teams in the mix. So cap space only gets you to the table, the problem is being distinct among the teams that have the space.

For the record I also agree with you on the young nucleus argument. I also think Kahn's idea of bringing in a development coach and stressing that, is a really creative way of trying to be different than other franchises.

You really think there are 12 teams in the NBA that can offer the massive amount of max level free agents this year a max level contract? Might I suggest a little tool known as "google" to help you out with that.

LeBron
Dirk
Wade
Bosh
Joe Johnson
Amare
Boozer
Ginobli
Yao Ming
Josh Howard
Marcus Camby
Ray Allen
Zydrunas Ilgauskas (he's actually not a bad stop-gap center)
David Lee (not for us, but someone)
Rudy Gay
etc.

This is a damn good year to have cap space. Not only will we be able to sign a good player, we'll get them at a bargain. Sure, Wade and Bosh can demand max contracts, but Boozer and Ginobli can't. Neither can Rudy Gay for that matter. There is not enough money to go around, and everyone knows it.

Cap space means a lot, and there are not 12 teams out there with max-contract raw cap space to sign all those good free agents with. Not only that, but most NBA teams are actually cutting back their salary, not adding to it, which means there is less money to go around.

[jgustav1]

This is excellent analysis ritt0093. I'm sure there will be others that will be commenting on this from the Minnesota guys I've seen posting on the Trades and Transactions board who value cap space for more than it is worth with so many teams having it this offseason. There will need to be calculated risks taken for the TWolves to make use of their cap space if they choose to use it to acquire a player with a larger contract that can help the team. Similar to what the Grizzlies did with acquiring Zach Randolph. This move has worked out great for them so far. They can either do this or follow a less risky path like OKC did, making use of their cap space in acquiring a player like Maynor.

[ritt0093]

The point of having cap space is MOST TEAMS DON'T. Only a few teams have a chance to sign a max level free agent, and we have a very well put together young team to go along with that cap space.

I completely agree that most teams don't have the cap room to offer the max deals and that is a huge help to the wolves. So it takes the potential suitors from 30 teams to about 12 (i'm just using a rough guess, if someone has a nice list please share it). If this was a more normal year and there were only 3 or 4 teams with max contract kind of cap space, then your argument would be even stronger. So while its great that 18 teams have been eliminated from the discussion there are still are huge number of teams in the mix. So cap space only gets you to the table, the problem is being distinct among the teams that have the space.

For the record I also agree with you on the young nucleus argument. I also think Kahn's idea of bringing in a development coach and stressing that, is a really creative way of trying to be different than other franchises.

You really think there are 12 teams in the NBA that can offer the massive amount of max level free agents this year a max level contract? Might I suggest a little tool known as "google" to help you out with that.

LeBron
Dirk
Wade
Bosh
Joe Johnson
Amare
Boozer
Ginobli
Yao Ming
Josh Howard
Marcus Camby
Ray Allen
Zydrunas Ilgauskas (he's actually not a bad stop-gap center)
David Lee (not for us, but someone)
Rudy Gay
etc.

This is a damn good year to have cap space. Not only will we be able to sign a good player, we'll get them at a bargain. Sure, Wade and Bosh can demand max contracts, but Boozer and Ginobli can't. Neither can Rudy Gay for that matter. There is not enough money to go around, and everyone knows it.

Cap space means a lot, and there are not 12 teams out there with max-contract raw cap space to sign all those good free agents with. Not only that, but most NBA teams are actually cutting back their salary, not adding to it, which means there is less money to go around.

I'll only address max contract worthy players, as the lower level players will be affordable for many more teams.

So, how many teams could have the opportunity to sign one of the max contract players? They would need around 17.5 million in cap space (unless they are resigning their own player). This is based off 30% of a 58.3 million dollar salary cap, which might be a little high. So my key is what teams have less than 40 million in guaranteed contracts for 2010?

Cleveland
Miami (x2 if Wade is 1)
Toronto
Chicago
Dallas (if Dirk uses his ETO, which I think is unlikely, they could make a small deal to hit that mark. much like the deal we did with Philly so they could sign Brand.)
Houston
LA Clippers
Minnesota
New Jersey
New York
Oklahoma City
Phoenix (if Amare leaves)
Toronto (only for Bosh)

In addition Memphis and Sacramento are close. This does not account for things like draft pick cap holds, or Rubio's cap hold. Those obviously could bump some teams out of the list, but they also could make minor moves as the draft pick holds aren't THAT much. Let's be honest if Wade said he'd play here but only if we could offer the max, and we were short a few bucks we'd trade anyone to make the deal.

so thats 13, plus 2 that are close. Now if I had to guess I'd say that only about 8 or so really will have that much space when free agency comes, but 8 is still way more than the 3 or 4 players that deserve a max contract.

[slinky]

I completely agree that most teams don't have the cap room to offer the max deals and that is a huge help to the wolves. So it takes the potential suitors from 30 teams to about 12 (i'm just using a rough guess, if someone has a nice list please share it). If this was a more normal year and there were only 3 or 4 teams with max contract kind of cap space, then your argument would be even stronger. So while its great that 18 teams have been eliminated from the discussion there are still are huge number of teams in the mix. So cap space only gets you to the table, the problem is being distinct among the teams that have the space.

Really, I think this argument of 'cap space is irrelevant' could be made every other year of FA. The only difference is now the wolves have cap space, so we all talk about it as if its a new concept. Whether there is 1 player with 4 teams able to offer Max Contract or there are 5 players with 12 it still comes down to something else besides money. And as Narf alluded to, for a player to actually become an UFA and sign with another team, that means a lot of the time they turned down more money from their current team. So yes other factors are involved.

And the fact that cap space 'gets you to the table', shows that it isnt irrelevant. I think basically you summed up the obvious. If we have enough money to at least make a UFA think about MIN, than maybe the 2010 draft picks, Flynn, Love and Al Jeff, Rubio and Pekovic, and Rambis, Theus, and Lambier are enough to seal the deal, but without the cap space to begin with no one bothers to look any further.

[Tirion]

this is kinda creepy.

[Narf]

I'll only address max contract worthy players, as the lower level players will be affordable for many more teams.

So, how many teams could have the opportunity to sign one of the max contract players? They would need around 17.5 million in cap space (unless they are resigning their own player). This is based off 30% of a 58.3 million dollar salary cap, which might be a little high. So my key is what teams have less than 40 million in guaranteed contracts for 2010?

Cleveland
Miami (x2 if Wade is 1)
Toronto
Chicago
Dallas (if Dirk uses his ETO, which I think is unlikely, they could make a small deal to hit that mark. much like the deal we did with Philly so they could sign Brand.)
Houston
LA Clippers
Minnesota
New Jersey
New York
Oklahoma City
Phoenix (if Amare leaves)
Toronto (only for Bosh)

In addition Memphis and Sacramento are close. This does not account for things like draft pick cap holds, or Rubio's cap hold. Those obviously could bump some teams out of the list, but they also could make minor moves as the draft pick holds aren't THAT much. Let's be honest if Wade said he'd play here but only if we could offer the max, and we were short a few bucks we'd trade anyone to make the deal.

so thats 13, plus 2 that are close. Now if I had to guess I'd say that only about 8 or so really will have that much space when free agency comes, but 8 is still way more than the 3 or 4 players that deserve a max contract.

First off, where did 58.3 million come from? You just made it up? The current cap is 57.7 million, and it is expected to drop by EVERYONE. So let's say 54 million.

Without Dirk or Josh Howard, Dallas has $43,908,803 over 7 roster spots. So add another 5 roster spots at minimum salary, and that is their MAX cap, under 10 million. Under 10 million without Howard and Dirk or a 1st round pick.

Phoenix, without Amare, has $45,148,530 tied up in 9 roster spots. Again, add another 3 roster spots of minimum salary players, and that's their cap space without a 1st round pick. Again, under 10 million dollars in cap.

It looks to me like you have no idea who does and does not have cap space, and what it would take for them to get there.

Toronto isn't even close, I have no idea why you listed them. Just because Bosh doesn't resign with them doesn't mean they get his contract as cap space.

The Clippers, Oklahoma city, Houston and a couple others have around 10-14 mil in cap space. But that assumes they don't resign any of their guys, like Luis Scola. I'm pretty sure Houston wants to resign him. But if they don't resign him, that's one more free agent we can pick up on the cheap.

There are a handful of teams with enough cap space to actually sign Dirk, Bosh, Wade, LeBron, etc. But there are more max level contract players than there are teams that can sign them. Clearly some of them will resign with their teams, but not because they want to play there. Because they can't find another team with a good young core who can sign them to a max contract. There are only a couple of THOSE teams out there.

And again, we haven't even added the other players that teams would have to cut to get under the cap. Miami would essentially have to gut everyone on their team outside of Beasley, Chalmers, and Wade. Chicago has Salmons. Etc, etc. I did not even come close to listing all the good players that are free agents. That's the point, I don't have to. There isn't enough cap space to sign them all to "market" contracts this year. And teams are cutting salary, rather than going 15 million over the cap as they did in the past. There are going to be good players left out in the dust. How much is Haslem worth? How about Jermaine O'Neal?

And you seem to have forgotten (or just never knew), if you take 1 dollar of cap space you lose your MLE and your LLE that year. Period. You can't have cap space and then use cap exceptions, it's one or the other. There are no cap exceptions for teams with cap space. So if a team has 9 million in cap space, their MLE and LLE is gone. So what's left to sign Ginobli with? Or CJ Watson? Or Rudy Gay for that matter? Those are all good players, they will all be cheap.

Cap space matters more this year than any other, because MOST teams are cutting salary THIS year. Not next year, not last year, THIS year. And teams who are willing to spend are going to get a huge bargain because of it.

[shrink]

Ok, now that I have your attention, and most likely given shrink a heart attack, let me explain what I mean by the thread title. ...

LOL! That made me laugh, which saves you from an internet search and waiting in your garage for you to go to sleep.

[Iommi]

In what universe is Amar'e Stoudemire worth more money than Dirk Nowitzki?

[shrink]

Its kind of nice for me to come to this thread, because Narf has done all the work for me, echoing many things that I would have said. Nicely done Narf. But on a macro scale, let me mention a couple:

1. There are a lot of free agents this season. Some will get bigger deals (LeBron etc), and many will get smaller, but very few will leave basketball altogether. These guys take back some of the available cap space.

2. And how much do they take back? Instead of the Knicks having a pyaroll of $80 mil in 2009-10, their payroll in 2010-11 will be closer to the $53ish new cap space. Adding salary is a slow process from there, because as Narf mentioned, if you go under the salary cap, you've used up all your exceptions (to the salary cap). Raising your salary by trade within 25%, when you're starting at $53, takes a long time to get you back to $80. For every team that is going under the cap, you have a team that's removing cap space.

3. We'll have another draft, and that's 30 first rounders that will use up another $50 mil+ in guaranteed contracts. And as we know, foreign 1sts will carry cap holds as well.


I like ritt's article, but I think he's under-estimating just how much cap space is out there.

[ritt0093]

I think he's under-estimating just how much cap space is out there.

I'm not sure, I certainly see the argument, and thank you to narf for pointing out the minimum roster sizes, I had forgotten that. One question, does anyone know if you must always have 12 players on the roster, or is it just at certain milestones (like the start of preseason for example)?

I guess my point boils down to this, if you have a free agent and he wants a MAX deal. There will be a handful of teams that are able to offer that. CHI, MIN, and New Jersey for example. In that scenario the cap space allows you to even attempt to sign the player, but it doesn't do anything beyond that, because MAX contracts have just that, a maximum limit. We will need another way to convince someone to join us over other similar opportunities.

[horaceworthy]

I stopped reading when I saw Rudy Gay put on the same tier as Dirk and Joe Johnson. Even putting Joe Johnson on the same tier as Dirk feels off.

[Iommi]

^ More off than Amar'e with LeBron and Wade?

[horaceworthy]

Rudy with Dirk? Yes.
Joe with Dirk? No.

[Narf]

Where did I say those players were close to equal? Good grief guys, this isn't really that hard. Whether or not we get a max level free agent, we will have plenty of good people to be able to sign at a bargain rate. The point is Rudy Gay IS NOT a max level free agent, and he's going to be much cheaper this year than any other year. So after LeBron, Bosh, Dirk, et al sign somewhere no one will have any cap space to offer Gay much of anything. We can get those 2nd tier guys for MLE prices, where as it would have cost us 10 mil a year just one year ago.