To say this year's summary of the Nets cap situation differs from last year's understates what we've seen this summer. One of the biggest stories of the NBA off-season has been Mikhail Prokhorov's break-the-bank treatment of the Collective Bargaining Agreement. Every time you think he's reached his limits, he adds more to the roster. Alan Anderson's signing is the latest example. By signing him to a vets minimum deal, the Nets added almost $4 million to the luxury tax bill.
So, here's our latest edition of the Nets assets. It's not all about extravagance. The Nets were able to help themselves avoid the deadly repeater tax by dumping Gerald Wallace and as it turns out, they are no longer No. 1 in guaranteed money owed players. Moreover, they didn't spend a dime of their $3 million limit on cash considerations. See, they aren't that wild, after all!
They have none and are unlikely to have any for another two years, at least. They went from $40+ million under the cap to $11.6 million over the luxury tax threshold in a matter of days back in July 2012. The payroll jumped to $83 million when Andray Blatche's contract became guaranteed in January. Luxury taxes for last season totaled $12.9 million, the first time they had paid a dime in seven years.
That turned out to be nothing!
The went all in this summer, trading for Paul Pierce, Kevin Garnett and Jason Terry, signing or re-signing Andray Blatche, Shaun Livingston, Alan Anderson and Andrei Kirilenko and drafting Mason Plumlee. The payroll now hovers around $102 million and the luxury tax is likely to be $87 million ... or more than they paid out in salaries last season!
The Nets owe their current roster a grand total of $278.5 million in fully guaranteed deals over the next five years.including the 2013-14 season (down from $340.3 million last year). That's the second highest total in the NBA (surprise!), according to ShamSports. The Clippers owe $307 million. Yes! Even if you add the $8 million the Nets still owe Travis Outlaw, they can't catch Clippers.
One financial advantage from the Celtics trade: the Nets dumped Gerald Wallace's contract, with its $10 million salary in 2015-16. By doing so, that should help them avoid the dreaded repeater tax for that season.
The big problem being so capped out for so long goes beyond the luxury taxes, which Russian ownership seems to see as the cost of doing business, an investment. The Nets won't be able to accept any players sign-and-trade deals the next two summers. Nor will they have the full MLE or the BAE. They will have the mini-MLE, which should start at around $3.3 million. (The Nets can sign and trade their own free agents as they did with Keith Bogans in the Celtics trade, using the big number to make the deal work.)
However, it should be noted that not a lot of people outside the Nets front office thought they had a lot of flexibility this summer and look what they were able to do!
This summer, the big expiring contract was Kris Humphries, who will be paid $12 million in 2013-14 by Boston. They also got value out of Keith Bogans who because he had been with the team two straight years was eligible for Early Bird rights.
This year, they have multiple expiring deals. Start with Paul Pierce, who will make $15.3 million this year. Don't be surprised to see the Nets offer him a multi-year deal at the end of this season ... at less money. Because he is at the end of a multi-year deal, the Nets have his full Bird rights. That means they can re-sign him outside the salary cap.
Tyshawn Taylor and Toko Shengelia's two-year guaranteed deals expire as well. Shaun Livingston is also an expiring contract with no options, team or player. Then, the Nets have three players who are on two-year deals with player options: Andrei Kirilenko, Andray Blatche and Alan Anderson. Kirilenko is being paid under the mini-MLE, the other two are vets minimum deals.
Blatche, as always, is unique. He still has two years to go on his amnesty payments from Washington, this season and next. Between his Nets salary and amnesty payments, he is guaranteed $18.5 million over two years. Because he's in his second season with the Nets, he will have his Early Bird rights next summer. That makes him eligible for a four-year $25 million contract outside the salary cap. If he plays well again, continues to mature and is healthy, he could be in for a big payday. He'll only be 28. By holding his Early Bird rights, the Nets can pay him a competitive salary. And yes, if he opts out and signs with the Nets (or any other team), he still gets money from the Wizards in 2014-15.
The Nets also turn Taylor or Shengelia into larger contracts for trade purposes as they did with Bogans. Or they could offer them qualifying offers of $1.1 million for 2014-15.
The Nets also haven't renounced Jerry Stackhouse's rights. He could be included in a sign-and-trade, but don't get your hopes up. This isn't a Bogans-type situation. The Nets don't have his Early Bird rights so he can only be paid the vets minimum plus 20 percent.
The rest of the roster is on a variety of other deals. Here are the details as laid out by ShamSports. Deron Williams has four years and $81.6 million left on his contract with an early termination option in the last year; Joe Johnson, three years and $69.5 million left; Brook Lopez, three years and $47.2 million left, with a player option in the last year; Kevin Garnett, two years and $24.4 million left; Jason Terry, two years and $11.5 million left; Mirza Teletovic, two years and $6.6 million left; Reggie Evans, two years and $3.5 million left. Mason Plumlee is on a rookie contract which could pay him $6.4 million over four in the Nets exercise his third and fourth year options. Williams and Lopez have 15% trade kickers.
A footnote: Last year, D-Will and JJ ranked #1 and #2 in guaranteed money owed. This year, they are #5 and #8. Chris Paul is #1, followed by Blake Griffin, John Wall, Dwight Howard, Williams, James Harden, Derrick Rose and Johnson.
The Nets still hold the rights to Bojan Bogdanovic, selected in the 2011 draft, and Ilkan Karaman, selected in the 2012 draft. Both play for Fenerbahce of Istanbul.
Bogdanovic, a 6'8" Croatian swingman, could arrive in the NBA for 2014-15, when he will be 25. As reported ad nauseum, he couldn't get out of his $2 million buyout with Fenerbahce this summer, scuttling the Nets plans to bring him over. Next summer, he could be a free agent. Fener would like to extend him, but he reportedly wants more reasonable buyouts. Anything above $575,000, he has to pay out of his own pocket. He has told Croatian websites that he still wants to join the Nets and league sources have told NetsDaily they look forward to getting his signature on an NBA contract as soon as possible.
As a second round pick, Bogdanovic can negotiate a contract outside the rookie minimums. Under the proposed deal he and the Nets had agreed to in early July, Bogdanovic would have been paid $3.2 million in 2013-13 and $10 million over three years. If he has a smaller buyout, will the Nets try to get him for a smaller package? Or did the Nets commit to the $9.9 million whenever he signs. Agents have a tendency to hold teams to handshake deals.
Still, the Nets aren't "stressing" over having to waiti another year for him, as one league official said. They know what they have in him and are willing to wait, just as the Spurs waited three years for Tiago Splitter. Moreover, there is the dual consolation of 1) getting Kirilenko and Anderson as Plan B and 2) knowing he will be coached by Europe's best coach, Zeljko Obradovic, at Fener.
Karaman, a 6'10" Turkish power forward, has an uncertain arrival date. He's 23. The Nets have not publicly talked about his buyout situation but he is quite aways from being an NBA quality player and in fact, he's barely on their radar. Considering he was drafted at #57, he is not likely to get much of a contract even if he does come over.
The Nets have their own first round picks in 2015, 2017 and 2019 and none from other teams. The 2015 and 2017 picks must be swapped if they are higher than the Hawks (2015) and Celtics (2017) They have only three second round picks through 2019. Here are the details on the second round picks:
--On Draft Night in 2011, the Nets sent their second round pick in 2014 and their 2010 first round pick (Jujaun Johnson) to Boston for MarShon Brooks.
--In the 2011 Mehmet Okur trade, the Nets sent their second round pick in 2015 to Utah for Mehmet Okur.
--In 2012 Reggie Evans trade, the Nets agreed to swap second round picks with the Clippers in return for Evans. If the Clippers pick is between #31 and #55, they can swap it with the Nets pick. The Nets can still trade the pick if the other team is willing to assume the risk.
--In the 2012 Joe Johnson trade, the Nets sent their second round pick to Atlanta.
--In 2018, the Nets have their own second round pick.
--In 2019, the Nets have their own second round pick.
Prior to the Deron Williams' trade, the Nets had not traded any of their own first round picks since 1999, preferring to keep their picks and trade those acquired from other teams. Under Billy King, they traded their own first rounders in 2011 and 2012 to acquire Williams and Gerald Wallace, then traded their own first rounders in 2014, 2016 and 2018 to acquire Pierce and Garnett.
The Nets have no trade exceptions.
Mid-level and Low-level exceptions:
The Nets had a mini-MLE last year and used it to pay Teletovic. This year, they used it to pay Kirilenko. The Nets don't have access to the Bi-Annual Exception, which starts at $2.6 million because of the size of their payroll.
Although the Nets have the richest owner in the NBA, new restrictions on cash considerations limit how much Mikhail Prokhorov can spend in deals. Under the new CBA teams are limited to sending --or receiving-- $3 million in cash during the fiscal year, July 1 through June 30. Since the Nets hadn't paid out any cash since June 27,2011, they were able to buy second round picks in the 2012 draft, paying Portland $2 million for the rights to the #41 pick, Tyshawn Taylor, and paying Philadelphia $750,000 for the rights to the #57 pick, Toko Shengelia.
They did not spend any of their $3 million limit in 2012-13. As of July 1, they have a new $3 million limit. Such cash considerations can be used to sweeten a trade or purchase a player's rights but the Nets would prefer to hold on to the money and use it on Draft Night.
Since he bought the team, Prokhorov has spent about $11.75 million in cash: $3 million in the Yi Jianlian salary dump; $3 million to facilitate the Deron Williams trade; $1.5 million to buy the rights to Bojan Bogdanovic and the $2.75 million to buy the rights to Taylor and Shengelia. During that period, no owner paid out more. James Dolan of the Knicks is second.