Nets vs. Knicks – Cap Space
October 12th, 2009, 11:09 pm by NetIncome“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!
October 13th, 2009 at 9:48 am
Awesome post as always, NI, but I’m wondering how you came up with this:
“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 rookie contracts of those four players adds up to $8,552,142. Add that to the $18,160,663 and you’re $6,165,044 away from your $32,877,849 figure for the Lee/Nate cap holds plus the minimum placeholders. Lee signed a one-year deal for about $8m, so I believe his cap hold alone would be over $10m. I think the Knicks are even more screwed than you’re giving them credit for.
October 13th, 2009 at 1:22 pm
Don’t the Heat have the most cap space? They don’t have anyone officially signed for the 2010-2011 season once Wade opts out. It’s Wade with a player option, and 4 guys on rookie scales with a team option. Even if they keep all 4 of those players, that’s only $12.6MM. If the point of the article is how much room do teams have to sign Wade or LeBron, then you can’t include Wade’s salary when calculating how much space the Heat have. Under your scenarios, Miami has cap space of $50.4, $41.0, and $37.4MM. By any definition, Miami has the most cap room of any team next summer.
October 13th, 2009 at 3:47 pm
Yeah, the Heat will have the most cap space ‘cuz Wade’s said he’ll definitely opt out of his contract so it won’t count as a cap hold.
The Knicks definitely will waive rights to Lee and Nate because Lee’s caphold is something like $12mill & I forget what Nate’s is, but probably something in the $5-8 mill range. That doesn’t mean they won’t be able to resign the two of them, but it does mean that they won’t be able to go over the cap to resign them.
Separate from all that though, I’m confused by some of your initial #s. You say you get them from Storytellers, and they have the Nets’ ‘10-’11 salaries at 32,189,544, versus you have $31,820,464. Likewise, they list the Knicks at 27,336,225, but you’ve got them at $32,877,849. Granted with the Knicks’ # Storytellers doesn’t count the 6 placeholders, but at the vets’ min that you list ($473,604), that’d be $2,841,624. Adding that to Storytellers’ #s gives only $30,177,849. I mean if the Nets do indeed renounce Boone & Williams, the Nets still end up with more cap space, but I’m still confused by your #s. Oh, also forgetting the Storytellers’ #s, you conclude that the Nets would have $28,733,840 committed to salary, and the Knicks’ again at $32,877,849. That means the Nets should have a bit over $4 mill more cap space available. Yet you say there’d be a difference of less than $1.5 (”In the second, by far the most realistic, the Nets would have $24,866,160 million. [...] In the most likely scenario, with the salary cap set at $53.6 million, New York would be $23,422,151 under the cap.”
What have I missed (or misunderstood)?
-Alex
FullyClips.com
October 13th, 2009 at 7:31 pm
Awesome article. Alex is not really accurate – if Wade opts out, he WILL have a cap hold (it will actually be less than his current salary as the salary cap will go down and his cap hold is going to be 105% of his 09-10 salary); the only way he doesn’t have a cap hold is if he signs with another team or the Heat renounce him. Lee’s cap hold is $10.5 million. It all depends where the Nets draft picks fall, but they will have more cap room then the Knicks, just like this very good analysis says. Also, I think you should look into this – even if the Nets typically pay 120% rookie scale, don’t most teams who want cap room wait to sign rookies before signing the free agent with space (thus, teh first round pick is only slotted at 100% until signed). Please if you can update this for us. The commenters are not really accurate – why would the Heat not pick of the options on Chalmers, Beasley and Cook, Anthony has a player options and James Jones might get waived (he has a partial guarantee I think). Again, this website is great. The Knicks analysis seems exactly right to me.
October 14th, 2009 at 2:00 pm
Ah, Alex, re-read the article…Storytellers and other “reliable sources”. Let’s just leave it at that, shall we?
October 14th, 2009 at 2:36 pm
The analysis is contingent on the Knicks having “cap holds for David Lee and Nate Robinson.” This is a fair assumption but an assumption nonetheless. Why is this important? I guarantee you D. Walsh has several iterations of what his payroll will be heading into 2010-2011. Also as a NYK fan, I would be surprised we would not waive Nate and Lee’s “Bird Rights” which is what commands the “cap hold” everyone has reference, as per the NBA’s Collective Bargaining Agreement (CBA). This allows the home team to re-sign players up for free agency to a higher percentage than other teams without incurring salary cap issues. The salary cap exception here is a bit difficult but essentially the max the Knicks can pay Nate and Lee will be more than the next suitor. The obvious logic here is, why? Why would the NYK not renounce Nate’s Bird Rights when it is clear there were no other offers. With Lee the argument is less straight-forward and admittedly an analysis can be done either way. But presuming both cap holds are released, the total amount would be a % over $12 M due to CBA calculations.
Now regarding the argument about which core is “better,” well that is why we are fans, and I will be first to admit that the (soon to be NY) Nyets have a terrific core. This argument, not one with specious numbers and without sufficient references, is one worth having.
Respectfully,
AJ
October 14th, 2009 at 8:12 pm
AJ,
What are you saying? You write real eloquently, but I am sort of confused. The analysis above is NOT contingent on any cap holds for Lee and Robinson – which would be approximately $10.5 million and $8 million. NetIncome I think is mistaken when writing that Lee and Robinson’s cap holds are included in his calculations – rather, he is just including 6 minimum salary cap holds. The Knicks HAVE to renounce the rights to Lee and Robinson (and thus, they would then have no cap holds) and the team can then only re-sign them using cap room. NYK did not renounce Nate’s Bird rights because it would have served them no good since they didn’t have cap room this off-season AJ. “The salary cap exception is here is a bit difficult”? The max the Knicks can pay either player is 25% of the salary cap (based on a BRI calculation for the cap and max salary). They can give them 10.5% increases and six years, but not a higher first-year salary than a team that has enough cap room (they can exceed their own salary cap to sign them since they have Bird Rights, but once signed, their new salary counts against the cap, so the Knicks would have to choose to sign Lee first and then LeBron or someone, right). If I am not clear, please let me know. But, your sentences seem fluid yet lack factual basis. NetIncome, any idea about the 100% or 120% rookie scale. Thanks a bunch.
Respectfully,
Preston
October 15th, 2009 at 10:48 am
Reading between the lines, it seems to me that Net Income has heard from “reliable sources” that Lee and/or Robinson have some sort of side deal where they agree to sign in 2010 for some artificially low amount with a handshake promise f future rewards.
Am I close?
October 21st, 2009 at 11:02 am
Hey AJ
We have sources you can’t even imagine. These numbers aren’t “specious”. They’re real. It’s not speculation, either.
And tell me, AJ, what kind of core would there be if the Knicks don’t sign Lee and Robinson?