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2023-24 Salary Cap Discussion Thread


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This is intended as a reference for salary cap discussion.  I am not planning on moving every post into here but the idea is to keep a pretty lean and clean thread (no going down the tank or no tank rabbit hole here for example) that people can look back to see how the salary cap works and how it shakes out for the Hawks for next year.

Posting this post describing the luxury tax for the Suns if they resign Ayton versus trade for Capela as a starting point given the referenced calculator which should be a useful tool for posters interested in luxury tax figures.

 

On 5/3/2022 at 3:02 PM, thecampster said:

Its an impossible task because the rest of the roster isn't set. But I have 3 minutes to get close.

The LT is going to be around $149 million. Lets use that number for right now.

If they sign Ayton to $30.5 to start (up to $159.8) and they don't trade anyone and they fill out their roster (5 slots) with vet minimums (avg 2.3 mil) we get a salary around 171.3 million. IMHO this is a conservative estimate. That gives us a Luxury Tax around $75.9 million.  See below.

https://public.tableau.com/views/NBASalaryTaxCalculator/Dashboard1?%3Aembed=y&%3AshowVizHome=no&%3Adisplay_count=y&%3Adisplay_static_image=y&%3AbootstrapWhenNotified=true

image.thumb.png.092340dacf11795fea2f70f54a0bfb42.png

 

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Sign and Trade and BYC Rule:

Signed-and-traded players can be difficult to salary-match in trades.

There’s one scenario in which a sign-and-trade may genuinely make sense — if a free agent wants to join a team without cap room. However, even that scenario can’t necessarily be handled like a normal trade, since the Base Year Compensation (BYC) rule often applies.

The BYC rule applies to a specific circumstance. If a player is being signed-and-traded via Early Bird or Bird rights by a team above the salary cap, gets a raise of at least 20%, and his salary is worth more than the minimum, his cap figure for salary-matching purposes will be affected. For the team acquiring him, his full salary would apply in a trade. For the team trading him, he would count for his previous salary or 50% of his new salary, whichever is greater.

Let’s use Lowry as an example one more time, and assume he signs a full max deal with a starting salary of about $35MM. Since he would fit the BYC criteria, Lowry would count for $35MM for salary-matching purposes for his new team in a sign-and-trade, but would only count for $17.5MM from the Raptors’ perspective.

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13 hours ago, JayBirdHawk said:

Let’s use Lowry as an example one more time, and assume he signs a full max deal with a starting salary of about $35MM. Since he would fit the BYC criteria, Lowry would count for $35MM for salary-matching purposes for his new team in a sign-and-trade, but would only count for $17.5MM from the Raptors’ perspective.

I'm pretty dumb with this stuff.   So in this example does that mean that Toronto only needed to take back $17m in salary?  

IF that's the case then for Lavine we'd have to send out around $20m right?

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35 minutes ago, macdaddy said:

I'm pretty dumb with this stuff.   So in this example does that mean that Toronto only needed to take back $17m in salary?  

IF that's the case then for Lavine we'd have to send out around $20m right?

Yes.

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Hawks 2022-23 guaranteed Salaries.

PG: Young (36.6)
SG: Huerter(14.5) Bogi (18)
SF: Hunter (9.8)
PF: Collins (23.5), Johnson (2.7), Gallo (5)
C - Capela (19.7), Okongwu (6.3)

TOTAL Guaranteed Salary = $136.1 million 

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14 hours ago, JayBirdHawk said:

Hawks 2022-23 guaranteed Salaries.

PG: Young (36.6)
SG: Huerter(14.5) Bogi (18)
SF: Hunter (9.8)
PF: Collins (23.5), Johnson (2.7), Gallo (5)
C - Capela (19.7), Okongwu (6.3)

TOTAL Guaranteed Salary = $136.1 million 

Doesn't Gallo count $21 million on the cap even if we waive him?

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5 hours ago, Jdawgflow said:

Can you go into more detail about limitations after the hard cap?

What actually triggers a hard cap?

There are only three actions a front office can take that subject it to a hard cap:

  1. Acquiring a player by sign-and-trade. Remember that this is only bringing in a new player this way; using a sign-and-trade to send out one of your own free agents does not trigger the hard cap.
  2. Signing a player using the larger non-taxpayer mid-level exception. For the 2020-21 season, the smaller taxpayer MLE starts at $5.718 million and contracts can only run for up to three seasons, while the non-taxpayer MLE is worth $9.258 million for the first season and contracts can run up to four seasons. The Memphis Grizzlies provided an interesting example in the 2020 offseason as they brought back two-way player John Konchar on a four-year, $9 million contract. The Grizzlies were over the cap and did not have sufficient Bird rights on Konchar to sign him to a four-year contract, so they had to use the MLE. Because it is a four-year contract, even the low-salary deal had to use the non-taxpayer MLE and thus triggered the hard cap.
  3. Signing a player using the bi-annual exception. Worth $3.623 million this league year, the BAE can be a one- or two-year contract, and using it both triggers the hard cap and prevents the team from using the BAE the next season.

Can you give a different example of how a team can be hard capped?

Sure. In 2020, the Miami Heat signed Avery Bradley on a two-year, $11.6 million contract, and Maurice Harkless on a one-year, $3.623 million deal. While each of these signings separately would not lead to any hard cap difficulty, since the Heat were well over the salary cap, there was no way for them to sign both Bradley and Harkless without using the larger non-taxpayer MLE, the BAE or even a sign-and-trade, ensuring they would be hard capped however Pat Riley chose to bring in the free agents. (Note: Sign-and-trade contracts have to run at least three seasons.)

 

Can this calculation difference cause problems?

Absolutely, and it potentially did this November.

One theory of what happened with the Bucks and Bogdan Bogdanovic this offseason uses this as the foundation. Acquiring Bogdanovic from the Kings via sign-and-trade was always going to hard cap Milwaukee, as that is one of the three triggers listed above. Considering their significant contracts on the books that were not a part of the reported deal, making the math work keeping their key players and adding Bogdanovic was always going to be difficult.

However, Milwaukee’s hard cap situation got much thornier when Jon Horst acquired Jrue Holiday from the Pelicans. In a significant twist of fate, Holiday has an unusually large collection of unlikely bonuses, reportedly around $3 million. That means instead of counting at his “normal” $25.9 million salary, Holiday’s hard cap charge is more than $29 million. As such, it would have been impossible for the Bucks to give Bogdanovic the salary he received from the Hawks only sending out the reported terms going to the Kings. While far from definite or conclusive, it is possible the hard cap calculations thwarted Bogdanovic joining the Bucks.

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Looking towards 2023-24 offseason, new salary projections:

NEW YORK -- The NBA told its teams Friday that it still expects to see a significant jump in the salary cap and tax level in the 2023-24 season.

Based on current projections, both figures -- $134 million for the salary cap, $162 million as the tax level -- would set records, and both are $1 million higher than the league's most recent projections made in June. The figures represent the cap rising 8.4% and the tax level 7.8% over the 2022-23 season

 

If history is any indicator, I would surmise that by the time the salary cap for the beginning of the new league year is set, it would probably jump another $2-$3 million.

 

2023-24 Roster (including Hunter's caphold):

image.png

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Over the tax - 125% of the outgoing salary + $100,000

Under the tax:

 

Outgoing Salary Incoming Salary Allowed
$0 - $6,533,333 175% of the outgoing salary, plus $100,000
$6,533,334 - $19.6 million Outgoing salary + $5,000,000
>$19.6 million 125% of the outgoing salary + $100,000

 

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2 hours ago, sturt said:

The only way this factors in is if one believes the unlikely incentives are a priority for the front office.

If that were the case, the payroll would need to be reduced to about $2m below the tax line. To our knowledge, there has been no effort made to achieve that.

But to be fair to you and anyone else taking the contrarian view here... indeed, this is the only viable argument I can imagine to have legs (ie, apart from the idea already cited that maybe they can't come together on contract terms).... it is plausible that the front office wants to get a better read on whether any of the unlikely incentives could end up being earned before they make it harder on themselves to deal with that eventuality.

This got me thinking.... needed to take a deeper dive into what these "unlikely" incentives are for Capela and DJM... and, are they really unlikely, or just sorta maybe kinda unlikely.

Here's what I found, and my own estimates of likelihood for each:

CLINT CAPELA

- $1M for the team making the conference finals + him playing 2000 minutes

This is Clint's 8th legit season (technically 9th, but his first season he barely played)... and he's topped 2000 minutes three times, but in only one of those three (2017-18 HOU) did he also go to a conference finals.

10% Likely

 

- $500K for achieving minimum of 30% DRB + him playing 2000 minutes

Of those 8 legit seasons, Clint's actually achieved that benchmark 4x... and two of those times (2017-18 HOU and 2021-22 ATL) he logged 2000 minutes. Through the first 10 games, he's at almost a 27% pace.

25% Likely

 

- $500K for achieving a minimum of 65% at the free throw line

Clint has never finished a year with anything higher than 63%. His career average is 53%, and so far in 2022-23, he's doing a little better than that, 56%.

5% Likely

 

DEJOUNTE MURRAY

- $500K for hitting 125 3-point shots

Dejounte has never finished a year having made more than 96 from the arc (ie, last season). However, through just 10 games, he's made 23, so it would seem he's preparing to blow through that target. That's a pace that puts him close to 190 for the season.

90% Likely

 

- $500K for finishing the season at or above 58% in true shooting %

This one's tougher, as his high mark was the 53% he earned last year. He's near 54% for this season so far, and that's representative of good shooting from the arc and exceptional shooting from the FT line.

10% Likely

 

- $500K for making the league's first or second All-Defensive Team

DJM's made that team once (2017-18 SAS), and I'm inclined to think he'll get even greater attention beside Trae for whatever defensive numbers he posts. And he is posting some numbers that will support that pursuit. Still, what will the competition be like? Hard to say.

50% Likely

 

So, if my guesses are in the ballpark, the end analysis suggests Schlenk should budget for $500,000 in incentive payments, and be prepared to pay out as much as $1,000,000... all for DJM. However, there's a not-good-but-reasonable chance that Clint could earn as much as $1,500,000 above that $1,000,000 for DJM.

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13 hours ago, sturt said:

 

This got me thinking.... needed to take a deeper dive into what these "unlikely" incentives are for Capela and DJM... and, are they really unlikely, or just sorta maybe kinda unlikely.

Here's what I found, and my own estimates of likelihood for each:

CLINT CAPELA

- $1M for the team making the conference finals + him playing 2000 minutes

This is Clint's 8th legit season (technically 9th, but his first season he barely played)... and he's topped 2000 minutes three times, but in only one of those three (2017-18 HOU) did he also go to a conference finals.

10% Likely

 

- $500K for achieving minimum of 30% DRB + him playing 2000 minutes

Of those 8 legit seasons, Clint's actually achieved that benchmark 4x... and two of those times (2017-18 HOU and 2021-22 ATL) he logged 2000 minutes. Through the first 10 games, he's at almost a 27% pace.

25% Likely

 

- $500K for achieving a minimum of 65% at the free throw line

Clint has never finished a year with anything higher than 63%. His career average is 53%, and so far in 2022-23, he's doing a little better than that, 56%.

5% Likely

 

DEJOUNTE MURRAY

- $500K for hitting 125 3-point shots

Dejounte has never finished a year having made more than 96 from the arc (ie, last season). However, through just 10 games, he's made 23, so it would seem he's preparing to blow through that target. That's a pace that puts him close to 190 for the season.

90% Likely

 

- $500K for finishing the season at or above 58% in true shooting %

This one's tougher, as his high mark was the 53% he earned last year. He's near 54% for this season so far, and that's representative of good shooting from the arc and exceptional shooting from the FT line.

10% Likely

 

- $500K for making the league's first or second All-Defensive Team

DJM's made that team once (2017-18 SAS), and I'm inclined to think he'll get even greater attention beside Trae for whatever defensive numbers he posts. And he is posting some numbers that will support that pursuit. Still, what will the competition be like? Hard to say.

50% Likely

 

So, if my guesses are in the ballpark, the end analysis suggests Schlenk should budget for $500,000 in incentive payments, and be prepared to pay out as much as $1,000,000... all for DJM. However, there's a not-good-but-reasonable chance that Clint could earn as much as $1,500,000 above that $1,000,000 for DJM.

Great analysis sturt.  I like the odds you've given these.  

If these were ops and risks for budgeting purposes, you would normally budget $1M for these (simply multiplying the odds by the payouts and adding them up) so that seems spot on as well.  

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