Spurs Salaries and Luxury Tax Situation.

[Mr.Bottomtooth]

This thread is unbelievably epic. Thanks a lot, Bruno.

[lurker23]

So, I was thinking a little more about the Spurs salary cap situation going into the summer of 2010, specifically about this clause:

http://members.cox.net/lmcoon/salarycap.htm#Q30

Nuts : Free agents still count against their old team's salary cap for ~130-200% of their old salary until they are renounced or signed.

This is where I need some number crunching help from Bruno or others, and please correct me if my calculations or assumptions are wrong. For the sake of argument, let's assume that all contracts stay as they currently are, with all options picked up and no extensions issued.

Players with their 2009-10 contracts listed:

Manu Ginobili- $10,728,130 (Bird Rights, counts 150% against cap)
Kurt Thomas- $3,800,000 (Bird Rights, counts 200% against cap)
Bruce Bowen- $4,000,000 (Bird Rights, counts 200%)
Fabricio Oberto- $3,800,000 (Bird Rights, counts 200%)
Roger Mason Jr. - $3,780,000 (Early Bird Rights, counts 130%)
Matt Bonner- $3,256,500 (Bird Rights, counts 200%)
Michael Finley- $2,500,000 (Bird Rights, counts 200%)

So, if my math is correct, the last 6 players on this list would count ~$39.6 million against the cap, with another ~$16 million for Manu. Obviously this can be resolved by renouncing these players, but I suspect that at least one or two of them probably need to come back to build a full team in 2010 and have at least some continuity in the program.

Obviously this won't be as huge a problem as the above list makes it out to be (distinct possibilities including not picking up the non-guaranteed parts of Oberto's and Bowen's contracts, Michael Finley and/or Kurt Thomas retiring, etc.), but there are a few key points that fall out of this:

1. The Spurs need to decide before free agency 2010 who is not part of the future (at least at their current price), and renounce their rights in order to get maximum cap space.

2. Is waiting until the 2010 offseason to re-sign Manu even an option? It would seem to me that the only real option is giving him an extension before that free agency period begins, since his $16 million against the cap would be very detrimental.

3. Does this make a trade a significantly easier option? A trade would allow you to get a good player now instead of in the free agency period, and would also potentially allow you to retain your rights to players you may want going forward, such as Roger Mason Jr. or Matt Bonner.

[Bruno]

Renouncing to a player "bird" rights is something very easy to do. You don't need to do it before the FA period. You can do it the same day than you use your cap space.

What will happens in case of a 2010 plan is likely the following :

On July 1st, Spurs won't renounce to their players. They will start negotiating with Spurs' and other teams' free agents they would like to sign.

At the end the moratorium (July 8th), Spurs will do :
1. Re-sign their own players with a cap hold higher than their new salary.
2. Renounce to the rights of the players they don't want to keep.
3. Sign free agents with their remaining cap space.
4. Re-sign their own players with a cap hold lower than their new salary.
5. Fill the roster with min contracts.

[pad300]

Also, of the players you list, there are 2 players whose Bird rights might not be immediately renounced (Manu, Mason). Both their bird rights are maybes depending on their next season (eg. if Manu gets injured again, or Mason flops in the playoffs again...).

As Bruno says, negotiations start on the 1st, and rights renunciations would happen the 8th...Contracts for either, neither or both will have been arrived at by that time.

[lurker23]

Renouncing to a player "bird" rights is something very easy to do. You don't need to do it before the FA period. You can do it the same day than you use your cap space.

What will happens in case of a 2010 plan is likely the following :

On July 1st, Spurs won't renounce to their players. They will start negotiating with Spurs' and other teams' free agents they would like to sign.

At the end the moratorium (July 8th), Spurs will do :
1. Re-sign their own players with a cap hold higher than their new salary.
2. Renounce to the rights of the players they don't want to keep.
3. Sign free agents with their remaining cap space.
4. Re-sign their own players with a cap hold lower than their new salary.
5. Fill the roster with min contracts.

Thanks Bruno. That order makes a lot of sense, and the intricate minutiae are interesting, at least to me. I think giving Manu an extension instead of waiting is the best course of action (at least around December-February, once we know his injuries haven't flared up again). This would provide the Spurs with a lot more certainty going into the off-season about what exactly they have to spend.

Going back to the OP of this thread, if the Spurs keep Hill, Mahinmi, and the Splitter draft rights, that brings their cap space down to $19.3 million. Manu's contract extension is likely to pay him somewhere between $6 million and $12 million in 2010. For the sake of argument, let's say the Spurs are able to convince him to take $8 million for the 2010 season. That brings their cap space down to $11.3 million. Is $11.3 million really enough to attract a big name? If money is their object, the biggest names can get more elsewhere.

Then the question is, what are your plans for Roger Mason Jr.? If you intend to keep his "Early Bird Rights," his cap hold would be $4.9 million, which would bring your cap space down to ~$6.4 million, which is hardly more than the MLE will likely be at that point. If you want to keep him and his market value is similar to his old contract, then when you resign him you free up $1.1 million, bringing your cap space up to $7.5 million.

Can someone see a flaw in this logic, particularly my second paragraph above? The more I crunch these numbers, the more I think a trade might be the best option.

[vander]

22 mill for TD
if he was a Free Agent right now he wouldn't get a deal for much more than 10 mil/yr

[SouthTexasRancher]

Damn fine work there Bruno. I hope Kori & Timvp paid you in Gold...

[tp2021]

22 mill for TD
if he was a Free Agent right now he wouldn't get a deal for much more than 10 mil/yr

If he was a free agent, he could get as much money as he wanted.

[mountainballer]

Can someone see a flaw in this logic, particularly my second paragraph above? The more I crunch these numbers, the more I think a trade might be the best option.

no, I think you hit the point, which most people ignore consequently. if the plan is, to get a premium FA 2010, it means no extension for Manu. period.
maybe that's the plan, who knows. if they sacrifice Manu, yeah then they can go for a high price FA. does it make this team significantly better? I doubt it. maybe younger, if Manu's replacement is under 28 and so they get a compe ive tandem in Tony and the new one for several years.

but if the plan is, get another championship till 2012, a trade is the only way to make this happen. and the time for this trade will be either this summer, or at deadline 2010.

btw. I'm pretty sure, that the VC scenario comes up again this summer. yes, this will mean lux tax and considering that VC is 32, there is also a risk to see him decline over the next 3 years.
on the other hand, VC's contract isn't bad for a team, that will have to totally rebuild in 2012. his contract will expire then, but the good thing is, it's last season is only guaranteed for 4 million. this means, the contract will become a very powerful weapon in 2011, because then it has a salary dump potential of 15 million $!
so, in the best case VC brings 2 more shots at a championship, in 2010 and 2011 and then becomes the crucial part of a blockbuster move, that helps to build a compe ive team for beyond 2012.

[kace]

well, i'm far from a cap and salaries specialist so this thread is very informative for me.

all of this could lead to be a little pessimistic considering the spurs don't have too much room with the big 3 under contract.

but then i look at some teams:

- the cavs are right now probably the best team of the NBA with 35 M wasted in almost useless players who don't have playing time (Wallace, Snow, Szczerbiak).
i still think that the cavs depth could be a problem but still, no one can deny their current good shape and level.

- houston, who is doing very well in those PO even after Yao injury, are "wasting" right now 36 M in useless players (injured yao and t-mac). even only without T-Mac, that was still 21 M wasted

- Dallas who beat us, was spending 21,4 M in J.Kidd. i wouldn't say he's useless. far from it. he's playing very smart for the mavs. but i think it would be accurate to think a 10 M PG would give the same level of play and that's still at least about 11 M "wasted"

- Portland, if i don't make any mistake, was spending 30 useless M in Francis and Lafrentz. and still was a good team even if eliminated in the 1st round.

The young stars drafted not so long ago and who can't get yet 20 M contract are obviously a great thing to have (LBJ, Roy), and Spurs can't have that but that's not the only reason. (LBJ is still making 14.5 M and Dallas and houston don't have such players).

what i mean is that money is far from the only thing to take in account to have a great team. when i see what some others team are able to do with so much money wasted (for different reasons), i still think that we have enough to build a good supporting cast around the big 3.

[mountainballer]

?
you talk as if there was a "wasted money exception" in the CBA.
yes, other teams waste money. so what does this help the Spurs? Cavs waste a lot, but they also carry a payroll of 92 million, that's 23 more than the Spurs. pretty much room to swallow some bad contracts.
what we know is, the Spurs will never ever climb to that regions of spending.
it was mentioned in this thread before. for several years, the big 3 were somehow "cheap" compared to some other star cores. but now they are combining for 45 million. that's no longer a discount price. to carry this and have a decent supporting cast and not pay lux tax, you must not waste a single $. and that's almost impossible, even for the best management.
(and the Spurs haven't had exactly a lucky management in the last years.)

[kace]

?
you talk as if there was a "wasted money exception" in the CBA.
yes, other teams waste money. so what does this help the Spurs? Cavs waste a lot, but they also carry a payroll of 92 million, that's 23 more than the Spurs. pretty much room to swallow some bad contracts.
what we know is, the Spurs will never ever climb to that regions of spending.
it was mentioned in this thread before. for several years, the big 3 were somehow "cheap" compared to some other star cores. but now they are combining for 45 million. that's no longer a discount price. to carry this and have a decent supporting cast and not pay lux tax, you must not waste a single $. and that's almost impossible, even for the best management.
(and the Spurs haven't had exactly a lucky management in the last years.)

what i meant it's that even with little money, there's a way to get great role players to make a very solidteam. Even if these team have a biggest payroll than the spurs, if you look at the "useful" money, you got:

- cleveland useful money = 56.8 M (total payroll less big ben, snow and wally)
outside their big 3 (LBJ, big Z and Mo williams), they got 23 M for role players.

- houston useful money: right now 39 M (without tmac and yao) !! (with Yao: 54 M). take out a poor current big three of Artest, scola and Battier and you only have 21.6 M for others players. and still, without t-mac and yao, houston manage to do well, like they did last year.

-Portland useful money: 50 M (total payroll - francis and lafrentz). OK Roy as a young player is cheap but still, you got a good team with 50 M

- Spurs: 69.3 M. for role players outside the big 3: 27.3 M this year (about 25 M next year). less than previous years, but compared to the others team above, we're not so bad. that's what i meant. with smartness and a little luck, there's a way to get a good supporting cast and so a great team with this money.

[BG_Spurs_Fan]

what i meant it's that even with little money, there's a way to get great role players to make a very solidteam. Even if these team have a biggest payroll than the spurs, if you look at the "useful" money, you got:

- cleveland useful money = 56.8 M (total payroll less big ben, snow and wally)
outside their big 3 (LBJ, big Z and Mo williams), they got 23 M for role players.

- houston useful money: right now 39 M (without tmac and yao) !! (with Yao: 54 M). take out a poor current big three of Artest, scola and Battier and you only have 21.6 M for others players. and still, without t-mac and yao, houston manage to do well, like they did last year.

-Portland useful money: 50 M (total payroll - francis and lafrentz). OK Roy as a young player is cheap but still, you got a good team with 50 M

- Spurs: 69.3 M. for role players outside the big 3: 27.3 M this year (about 25 M next year). less than previous years, but compared to the others team above, we're not so bad. that's what i meant. with smartness and a little luck, there's a way to get a good supporting cast and so a great team with this money.

I see your point, but l'm with Mountainballer on this.

You give examples and you conveniently take away the mistakes of the other teams by subtracting the bad contracts from their payroll, yet you don't take away any contract from the Spurs payroll. In other words, while it is true that these teams have some good roleplayers, they also have noticeable expensive mistakes, which they can afford. The Spurs, on the other hand, cannot afford to make even a small(ish) mistake by giving some player a bad contract, J Butler, being the most obvious reference.

You want our management to get as good and cheap roleplayers as the other mentioned teams, but without the inevitable mistakes they do. I find this pretty unrealistic. Every FO makes mistakes.

We'd have to rely on our big 3 being as good or better than the other teams' big 3 to have a chance. Only then will the roleplayers take part in the equation.

[kace]

I see your point, but l'm with Mountainballer on this.

You give examples and you conveniently take away the mistakes of the other teams by subtracting the bad contracts from their payroll, yet you don't take away any contract from the Spurs payroll. In other words, while it is true that these teams have some good roleplayers, they also have noticeable expensive mistakes, which they can afford. The Spurs, on the other hand, cannot afford to make even a small(ish) mistake by giving some player a bad contract, J Butler, being the most obvious reference.

You want our management to get as good and cheap roleplayers as the other mentioned teams, but without the inevitable mistakes they do. I find this pretty unrealistic. Every FO makes mistakes.

We'd have to rely on our big 3 being as good or better than the other teams' big 3 to have a chance. Only then will the roleplayers take part in the equation.

well, you got a point. but still, i think it's rather easy to avoid such mistakes. i mean contracts like big ben, snow, tmac.... are easily avoidable.

the thing is i don't remember if those teams had to take those bad contracts in order to get those good and cheap role players. i don't think so.

but for me, even if i agree that it would need zero mistake from the FO, it proves that you can get a very solid supporting cast and relatively cheap if you put the good pieces together. Money is far from being the only part of the equation.

[Chieflion]

Miami would still have the most cap flexibility as Riley is a smart GM still.
Including Wade, they can sign another max FA (Bosh) and fill their team with role players (Cook) and solid starters (Chalmers/Beasley).

I think the 2010 plan is screwed.

[Marcus Bryant]

Great. They are tradeable--but for what? Why would anyone give away a great young player they like for the future just for some capspace?

How about a player who can help the Spurs win today and a draft pick? Not to mention that Bowen and Oberto can help a team cut payroll today. Trades aren't just made in terms of what is best for the team on the court, as we've learned with the Scola trade.

What we'd get offered is our old guys for their old stars with long term contracts on the downside of their careers? (Think Vince Carter or Shaq or Sheed) Or players who weren't great but serviceable who are also on the way down and aren't likely to give us the energy and youth we need. (Check out Thomas' stats for the last five years) Guys like that will just put us in a hole later on so why go there?

Where will this team be at when Duncan retires? The future is now. This team will inevitably take a hit when he's gone and can spend a few seasons ac ulating draft picks and building with younger players (not to mention those already in the system).

We need to remake this team--but it will be difficult. Let these players ride it out this year and we will be the ones with all the capspace next year.

Of course it means another losing year during the limited time left for the Big 3.

No way. The window is 3 years. Duncan's gone after that. You aren't going to see a total overhaul. Use your cap flexibility now to land some talent and forget about wasting yet another season trying to do something that's best done when Duncan hangs it up.

[Knoxxx]

Ginobili at $8 million per year in 2010 sounds too high to me. I think we can resign him for something like $5 for 4 years, or $6 million for 3 years. He will be 33 next summer. I'm sure he will trade a few million another team might offer for a longer term deal with the Spurs. Come on now, who would want to pay him $8 million per year when he is 35+ years old? I believe he will negotiate in good faith to remain a Spur until retirement, and that will be a good deal for both parties.

[Johnny RIngo]

Spurs 2010 plan is crap. They will get stuck with cast offs. No one wants to play with a slim aging roster. We need to have a 2009 plan, then look to reload when TD retires in 2-3years.

Agreed. I'm tired of hearing about the 2010 plan. Spurs need to look to win now.

[Obstructed_View]

The worst part of the 2010 plan is that it seems to hinge on the Spurs' being able to attract a top level free agent; something they've never really done before. If they stink on ice next year, the chances of drawing said free agents go down, not up.

[objective]

Still seems that the 2010 plan depends on renouncing Manu or getting him to play for much less.

If that's the case, I'm thinking he'll go to Houston to play with Scola. The Rockets will have plenty of caproom.

[SenorSpur]

Excellent write up!

Comprehensive summary that answers a lot of FAQs.

We should call you Professor Bruno from now on.

It's obvious the Spurs do need immediate help, yet are limited in their options. Still they cannot afford to sacrifice the 2009 season for the sake of the 2010 plan. Try selling that to TD, TP, Manu, or to the fans. It will be very interesting to see what direction the Spurs go in.

[Obstructed_View]

I think what they are betting on is grab'n 2 older players who want a le and are willing to take a bit less then they could get elsewhere or to be able to take players for nothing.....like the clips did with camby.....teams looking to dump guys for cap space, who knows maybe we get a couple real good players but 2010 is another season away and TD and Manu wont be any younger or more athletic then. Go all out this off season.....get Ariza, Artest, Gortat or trade for RJ or VC and win in 2009 and rebiuld later.

SPurs are close we just need a pcs who can score a bit and defend at bitl

Yeah, I remember when the Spurs thought that David was going to defer a lot of salary so the Spurs could have money to spend on all kinds of free agents, and they ended up losing Derek Anderson because Robinson threw a hissy fit. Those kind of plans have a tendency to blow up in your face. The Spurs could hope for another Glenn Robinson, but that's not exactly what they're going to need come 2010.

[buttsR4rebounding]

did ever a championship team come out of the free agency? I can't remember. as Bruno mentioned, there are 3 way to improve: trades, draft and free agency.
but if we look at the championship teams of the last years, all of them were built by draft and trades. (I'm talking about the cornerstones, not the role players)
Spurs only by draft (Tim, Tony, Manu), Celtics, Heat, Pistons, Lakers, Bulls by a combination of picks and trades.
the last FA signing I remember that turned into a top three player on a championship team was Billups, but he wasn't a big money signing, back then he was the typical MLE signing.
all the other max signings out of cap room didn't turn teams into champs. very often they didn't even improve the team.
I think free agency is good for finding complementary players, but not for building the foundation of a big team.
the reason is simple. to be able to make a max signing, the team needs to be below the cap that far, that there usually isn't enough depth left. you may add a star, but to finish the whole building, the team usually doesn't have the potential left.
trades are a different thing. via a combination of contracts, you can get those players, that are crucial to finally win it all. see Shaq to Heat. KG+RA to Celtics. Sheed to Pistons. maybe Gasol to Lakers. maybe Mo Willams to Cavs.
that's why I'm not a fan of all the free agency scenarios.
if the Spurs in fact reduce the team to just Tony and Tim and a few rookie contract players, they will very likely find themself without a top FA and even if they do find a decent player, they would be to thin to compete. (we need to see that a big signing 2010 automatically means that Manu is no longer with the team)
improvement via trade is the much better strategy. and this will be the year to do it, there will be more star players on the market for dump packages than ever. Spurs might not be as lucky as the Pistons in 2004 or the Lakers in 2008, but a nice player can be all theirs, if they pull the trigger. I'm absolutely sure that another le can only be won, if the Spurs keep the big three together (pray for Manu's health) and add one significant piece. forget the 2010 free agency. 2012 will be the year to re start from scratch. till then they have 3 more shots. if they take some risk this summer.

I agree 100%. I also think that because of that this needs to be a year when the Spurs are willing to go over the cap. If you are serious about taking advantage of Duncan's last few years then you have to be willing to do that.

[FromWayDowntown]

The worst part of the 2010 plan is that it seems to hinge on the Spurs' being able to attract a top level free agent; something they've never really done before. If they stink on ice next year, the chances of drawing said free agents go down, not up.

I think the shortsightedness of the 2010 plan lies in the growing sentiment that the guys at the top of that summer's class will stay put. There certainly seems to be a growing faith that Lebron will stay in Cleveland and Miami is openly discussing an extension with DWade.

It's one thing if Lebron and company are all moving around -- in that cir stance, the big market clubs, along with their old clubs, are all fighting for those studs and clubs like the Spurs have the opportunity to mine some nice things out of the "lesser" players in that class.

But if Lebron and Wade stay put, suddenly New York and others are fighting for the guys that the Spurs would have been more likely to attract. The Spurs aren't likely to win those fights -- as OV and others note, history is strongly against them. There could be no worse scenario for the Spurs than to put all of their eggs in the Summer of '10 basket, only to come away with nothing from that summer.

I'd still prefer to see the Spurs exploit other clubs' need to shrink payroll this summer.

[Mel_13]

I think the shortsightedness of the 2010 plan lies in the growing sentiment that the guys at the top of that summer's class will stay put. There certainly seems to be a growing faith that Lebron will stay in Cleveland and Miami is openly discussing an extension with DWade.

It's one thing if Lebron and company are all moving around -- in that cir stance, the big market clubs, along with their old clubs, are all fighting for those studs and clubs like the Spurs have the opportunity to mine some nice things out of the "lesser" players in that class.

But if Lebron and Wade stay put, suddenly New York and others are fighting for the guys that the Spurs would have been more likely to attract. The Spurs aren't likely to win those fights -- as OV and others note, history is strongly against them. There could be no worse scenario for the Spurs than to put all of their eggs in the Summer of '10 basket, only to come away with nothing from that summer.

I'd still prefer to see the Spurs exploit other clubs' need to shrink payroll this summer.

I have always thought that 2010 plan is just like the 2008 plan and that it represents a fallback position rather than an organizational imperative.

Back in the summer of 2006, the Spurs traded Rasho and let Nazr walk. Every player they subsequently added had contracts that expired by 2008 and we began talking about the 2008 plan and defined it as a plan to have maximum cap space in 2008 to make significant changes. From my point of view, it actually represented a final fall back position that they would use only if other, better options did not materialize. So they would have the Feb, 2007 trade deadline, summer 2007, and the Feb, 2008 deadline to make moves before the summer of 2008 rolled along. As is turned out, the Feb 07 deadline passed, they won the le in 2007 and then extended/resigned Bowen, Oberto, and Bonner and the 2008 plan was dead.

Since then the Spurs have not added any new player (outside of first round picks) with a contract that extends beyond 2010. I believe they will look at ways to improve the roster through trades and FA this summer and will also be there at the Feb, 2009 trade deadline. I don't think there is any reason to believe, based on recent history, that the Spurs will stubbornly hold onto their 2010 cap space. I do think they will weigh the merits of any potential deal against what they might realistically get in 2010.

I say this not only because what your post says is true and I'm sure the FO is aware of it, but because going into the summer of 2010 with all their cap space intact leaves them at the greatest possible financial disadvantage vis-a-vis teams like the Lakers, Cavs, Mavs, etc. The Spurs already treat the lux tax as a hard cap and are outspent by 10-40M by some of the top teams. If they go into 2010 with cap room they will only be able to exceed the salary cap with vet min contracts. Most of the room between the salary cap and the luxury tax (about 12M) will go unused. I believe this represents the last option for the Spurs.

So time will tell, but I think the most likely scenario is one where a combination of trades, FA signings, and a possible Manu extension leaves the Spurs with total payroll commitments right around the salary cap going into the summer of 2010 and that they then use the MLE, LLE and their 2010 1st rounder to fill the space between the cap and the tax.