Nets vs. Knicks – Cap Space

"We currently have the most cap space available of any team.’’

--Kiki Vandeweghe, GM, New Jersey Nets, October 11, 2009

"We have the most room in the league. That's good. We're No. 1."

--Donnie Walsh, GM, New York Knicks, September 26, 2009

So who's right?

Firstf of all, it's highly unlikely that both the Nets and Knicks rosters will be the same come June 30, 2010. The variables are just too great.

But let’s assume for the moment that they are the same. Who do you believe, Kiki Vandeweghe of the Nets or Donnie Walsh of the Knicks? Both have said they will have the most cap space on that date.

Let’s start from the beginning…where will the cap be set. Chad Ford of ESPN wrote this in August…when he projected the Nets would have the most:

Last summer, NBA GMs were projecting a cap of $62 million to $64 million in the summer of 2010. But when the league reported the cap numbers for next season on June 30, the league memo mentioned that the NBA is now projecting a 5-10 percent decrease in the cap for the summer of 2010.

A 5 percent decrease makes for a $53.6 million cap next year (down $4 million from last season's $57.7 million cap). A 10 percent worst-case scenario? Teams will be playing with a cap below $50 million.

From our analysis, it’s hard to understand how Walsh is correct. It would appear the Nets are in better shape…not by much but enough.

Rather than raw numbers, we looked at what’s realistic. Eddy Curry and Jared Jeffries aren’t going to exercise their player options next June. Similarly, the Nets are highly unlikely to dump Yi Jianlian by the end of this month or Chris Douglas-Roberts next June.

Using the numbers at Storytellers’ salary site and other reliable sources, here’s our best guess at the situation come midnight, July 1, 2010:

The Nets currently have $31,820,464 seemingly committed to 10 players. But Keyon Dooling has partial buyout in his contract, if exercised before June 30. As a result, payroll commitments can be reduced by failing to exercise the option on Dooling--a savings of $3,328,000. (Reports that Eduardo Najera has a buyout provision appear to be inaccurate.) In addition, by not extending a qualifying offer to Josh Boone in June, the Nets save $2,992,888. Let’s assume as well that they don’t exercise a fourth year option on Sean Williams by the end of this month. That’s a savings of $2,502,328. Total reduction by exercising all those options: $9,823,216. That makes the Nets more realistic figure $22,866,328 for seven players: Devin Harris, Eduardo Najera and five players on rookie contracts: Yi Jianlian, Brook Lopez, Courtney Lee, Chris Douglas-Roberts and Terrence Williams.

The Nets currently have two first round picks. If you assume that they are the #10 and #21 picks, those picks would mean an additional minimum expenditure of $2,954,400--$1,865,300 for the #10 pick and $1,089,100 for the #21 pick. The Nets, like most NBA teams, traditionally add 20% to rookie contracts--the maximum permitted under the collective bargaining agreement. If assume higher picks, say they wound up with the #1 pick and the #15 pick, the rookie contracts would exceed $5,730,200, but we wouldn’t complain. For the purposes of this exercise, let’s go with a middle number: $3,900,000.

Now add something else to the mix: if the Nets renounce all cap holds they would have only have nine players under contract on July 1: the seven players listed above and the two rookies. The NBA's collective bargaining agreement requires that teams have 12 players count against your salary. So you have to add three players, at the veterans minimum, to the calculation. Three times $473,604=$1,420,812.

At the end of the day the more realistic salary number for the Nets is $28,733,840. That counts the seven players already under contract, the two first round picks and the three minimum salary placeholders.

The Knicks will have a total of $32,877,849 committed: the six players on their current roster, which includes $18,160,663 in player options for Curry and Jeffries as well as the rookie contracts of Wilson Chandler, Danilo Gallinari, Jordan Hill and Toney, Douglas, plus cap holds for David Lee and Nate Robinson and those minimum salary placeholders. The Knicks have no first round picks in next year’s draft, having traded theirs in the Stephon Marbury deal four years ago. It is currently held by the Jazz.

Both teams also have second round picks, but players taken in the second round do not get guaranteed deals of any kind. The two teams could also take an international player in the second round—there are two CSKA Moscow players currently projected as second round picks.

Moreover, the Knicks have several players whose expiring contracts they might need to extend to be attractive to free agents—David Lee, and maybe Al Harrington and Nate Robinson. All have professed undying love for New York. The Nets might want to keep Jarvis Hayes and either Rafer Alston or Keyon Dooling, but those three are not critical to attract free agents.

So bottom line, lets assume three different scenarios, with a cap of $63 million, one of $53.6 million and a draconian one at $50 million.

In the first scenario, the Nets would have $34,266,160 to spend on six players. That scenario is highly unlikely.

In the second, by far the most realistic, the Nets would have $24,866,160 million.

In the third, the worst case, the Nets would have $21,266,160. Like the first scenario, that too is unlikely.

In each case, the Knicks would have a little less…again if nothing changes. In the most likely scenario, with the salary cap set at $53.6 million, New York would be $23,422,151 under the cap. In the most draconian case, with the cap at $50 million, the Knicks would be less than $20 million under the cap.

Who else has a shot? The team with Dwyane Wade and sunny weather: the Heat. Miami would be $18,529,035 under the cap, if it's set at $53.6 million. A bit behind but clearly with enough room to land a big free agent: the Thunder, expected to be about $14.8 million and the Timberwolves, with $14.4 million.

Filling out the roster will also be easier for the Nets than the Knicks. The Nets would have more players already in the fold.

Moreover, which group of players gets a free agent more excited—Devin Harris, Brook Lopez, Courtney Lee, Terrence Williams and two picks or Eddy Curry, Jared Jeffries, Danilo Gallinari, Wilson Chandler, Jordan Hill and only the possibility of David Lee and Nate Robinson returning?

Of course, things can change. The Nets’ Brooklyn plans could fall through. Mikhail Prokhorov could decide to focus on gold and forget becoming the gold standard for NBA owners. The Knicks could find a suitor for Eddy Curry or Jared Jeffries that would get them an expiring contract—the former seems impossible, the latter plausible if Jeffries looks as good as he did against the Nets. Overall, we like our chances.

Overall, though, we like our chances. As Bill Simmons wrote this week:

This completely changes the landscape of the LeBron [James] Sweepstakes. Before, the Clippers and Zombie Sonics were the best basketball situations for him (no way for both); the Lakers were out; the Bulls seemed far-fetched; and the Knicks are such a mess that adding LeBron would have been like reliving Gretzky and the Kings all over again. But Russian Mark Cuban’s deep pockets coupled with Brooklyn and a decent young Nets roster? Intriguing!

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