The Nets dipped into their assets to acquire Deron Williams, move Troy Murphy, sign Sundiata Gaines,and trade up for MarShon Brooks and Bojan Bogdanovic on Draft Night. But they still have five draft picks, including four first rounders, over the next three years and at least $17.5 million (maybe as much as $20.8 million) in expiring contracts this off-season...although they've made it clear they'd like to bring back Kris Humphries. and may want to keep Sasha Vujacic, too.
Here are the details...
Cap Space:
The Nets finished the season about $870,000 over the cap after trading for Deron Williams and signing Gaines but more than $10 million under the luxury tax threshold. The Nets gave out a reported $635,000 in partial guarantees last summer which are also part of the mix: $450,000 for Stephen Graham; $100,000 for Sean May; $50,000 for Brian Zoubek and $35,000 for Ben Uzoh -- two of them long departed. The Nets also paid small sums to three players originally signed to 10-day deals: $50,000 to Orien Greene as well as $157,354, to Mario West and $204,000 to Gaines, the latter two having parlayed their 10-day contracts into roster spots at year's end. Gaines was signed to a two-year guarantee late in the season before fracturing his hip. Graham and Uzoh's guarantees ultimately became part of their veterans' minimum salaries. The guarantees paid May and Zoubek along with Greene' and West's 10-days counted against the cap this past season.
Expiring contracts:
The Nets have six players on expiring contracts totaling $17.5 million, with the strong possibility those numbers could rise to seven and $20.9 million. The expiring contracts, in descending order of size, are: Dan Gadzuric, $7.243 million; Vujacic, $5.475 million; Kris Humphries, $3.2 million; Graham, $992,680; Uzoh, $473,604; and West, $157,354. Graham also has a $100,000 partial guarantee on a second year which the Nets won't have to pay if they waive him before July 5, which is likely. Brandan Wright, on the last year of his rookie contract, is a restricted free agent making $3.398 million. Should the Nets decide not to keep him, as expected, his contract too becomes expiring, bringing the total to nearly $21 million. Only two NBA teams have more in expiring deals.
The remainder of the team is either on rookie contracts--Brook Lopez ($2.41 million), Damion James ($1.16 million), MarShon Brookss ($1.34 million) and Jordan Williams ($473,604); or multiple year deals --Deron Williams ($14.94 million), Travis Outlaw ($7 million), Anthony Morrow ($4 million), Jordan Farmar ($3.75 million), Johan Petro ($3.25 million), and Gaines ($884,293). Williams of course can opt out at the end of next season and become a free agent, sign an extension, or play out his contract through 2012-13. The Nets should be under the cap by roughly $19.2 million in 2011-12, assuming the new CBA resembles the old one. It won't. Also, the figures for Brooks and Jordan Williams are based on last year's rookie scale, which will also change once a new CBA is approved.
Draft rights:
The Nets hold the rights to Bojan Bogdanovic, selected in the 2011 draft. He is not expected to join the team till 2012-13 when the team opens Barclays Center. As a second round pick, he can negotiate a contract beyond the rookie minimum.
Draft picks:
The Nets have five picks over the next three years, three of their own two acquired in trades, including the Rockets' 2012 first rounder obtained in the Terrence Williams/Vujacic deal. The Rockets' 2012 pick is lottery-protected pick.
Here are the details:
In 2012, the Nets have their own first round pick; the Rockets' first round pick (lottery-protected), acquired in the Terrence Williams trade; and the Heat's second round pick (unprotected), acquired along with Chris Quinn. Only two other teams have two first round picks in the 2012 draft which is viewed as one of the strongest in years.
In 2013 (and beyond), the Nets have their own first round pick.
In 2015 (and beyond) the Nets have their own second round picks, having sent their 2012 second rounder to the Warriors in the Troy Murphy trade; their 2013 second rounder in the Bojan Bogdanovic trade and their 2014 second rounder in the MarShon Brooks trade..
Regarding protections:
--The Rockets' 2012 first rounder. The pick is lottery protected (1-14) through 2016. If the Rockets pick falls in the lottery in 2012, the pick rolls over each year, again through 2016. In 2017, it would become a second round pick.
Until the Deron Williams' trade, the Nets had not traded one of their own first round picks since 1999, preferring to keep their picks and trade those acquired from other teams. (The last two first round picks the Nets traded turned into Matt Harpring and Wally Szczerbiak.)
Trade exception:
--an estimated $1.3 million exception acquired in the Deron Williams trade. It expires at the trade deadline in 2012. There are restrictions on its use...it can't be traded with a player for example...but they can be valuable. If the Nets wanted to trade a draft pick to, or swap picks with, a team in return for a player, they can use a trade exception to do so. Trade exceptions can also be used to grab a player off the waiver wire if he makes less than the value of the TE plus $100,000. The status of TE's after the new CBA remains murky.
Mid-level and Low-level exceptions:
With the Nets go over the cap, they would normally be able to use their mid-level (MLE) and low-level (LLE) exceptions, worth $5.85 million and $2.0 million, to sign and trade players in a more complicated deal. However, the team renounced both last summer to get room for free agent signings. It's uncertain if the MLE and LLE will exist under a new CBA.
"The Jersey Fund"
That's our terminology for Mikhail Prokhorov's financial commitment to the Nets while they are still in New Jersey. Prokhorov set aside $60 million to to cover operating losses until the team moves to Brooklyn, including servicing the team’s debt (totalling more than $175 million); getting out of the IZOD lease, facilitating trades, as well as the additions to the front office. Prokhorov paid out $3 million to facilitate the Yi Jianlian deal, another $3 million to facilitate the Deron Williams trade and an undisclosed amount to move up in the draft, although the number has been characterized as "a few" million.