Quick simple question about the cap money we have

[Blunt91]

I just wanted to know does the amount of cap money we currently have include the 2.5 million dollars that the Cavaliers are suppose to be sending out way for the Kay Felder trade? 

[JTB]

Good question @JayBirdHawk

[thecampster]

That is not cap money because the player never counted against our cap. The reasons teams buy 2nd round draft picks is to lock the player (once they join the team) into the bargain basement rookie salary for 2 years. This is less than a vet minimum and far less than spending on things like the MLE.  Let me explain it this way.

 

$94 million cap / 15 players = 6.27 million per player.

($94 million in cap - 3 players >$20 million)/12 = 2.83 million per bench player x12

 

($94 million cap - 2 2nd round picks /13 players) = 7.1 million  per player.

(94 million cap - 2 2nd round picks - 3 players >$20 million )= 3.3 million per bench player.

 

NBA rotations are 10 deep...8-9 + injury replacement.  The last 5 guys on the roster have a couple of jobs....practice opponent, garbage time, night off for veterans. Those 5 guys typically earn the vet minimum (1 million a season) to the MLE (5 million a season).  The average salaries for those jokers are about $2.5 million. Teams like Cleveland who are over the LT by a lot desperately need to reduce salary without giving up their core. The current salary of the Cavs is $113 million and they exceeded the cap last year making them repeat offenders. The LT is tiered by $5 million increments. First 5 million = $1.50 tax per $1 spent over, with repeat offenders paying $2.50. Next 5 million is $1.75 and $2.75. $10m to $15m over is $2.50 and $3.50. And the $15m to $20m over is $3.25 and $4.25 per $1 spent over. From there add 50 cents per 5 million more over you are.

 So in the case of the Cavs who are currently $19 million over the cap and repeat offenders,  they are spending $4.25 for every 1 dollar spent over. Their 19 million in LT is costing them a tax of $80 million dollars this year. For ever 1 million you reduce you save an additional 4.25 million.  So Buying  a second rounder for 2.5 million that allows you to swap a 2.5 million veteran for a $500,000 rookie for 2 years is an annual cap savings of $2 million and an annual LT savings of 8.5 million. Buying the Hawks second rounder (if he gets a roster spot) saves the Cavs $18.5 million dollars in salary (but not cap).  For teams like the Hawks who are under the cap or nearing the cap, those contracts are actually bad. The minimum team salary is $84.29 million. For a team that is vastly under the cap (a rebuilding team), a $500,000 contract means they'll have to overpay for someone at some point.

This is why you are seeing free agents priced out of the market right now. Most NBA teams last year had salaries between 65 and 70 million. By jumping the Salary cap by 24 million, they also moved the minimum bar up 21.6 million. Each team not over the cap needed to up their team salaries by as much as 20 million + free agents lost. Teams who miss the minimum salary are charged a surcharge and the money is distributed equally among the team's member. So there is no benefit to being a cheap team.

So back to topic. Cleveland bought the 2nd rounder because they were shedding salary and avoiding as much of the LT as they can while keeping their core together. The Hawks sold it because they were already under the cap with a near full roster and would rather have a vet in that slot. The sale is cap neutral because it never posed a hold and didn't touch salaries. Cap = active salary and holds...not actual money.

As a side note, this is one of the reasons you aren't seeing the Hawks waive Mike Scott or trade Splitter/Korver/Sefalosha/THj yet. Until they have a deal in place to sign a free agent, those players in question keep the Hawks above the new minimum salary of 84 million (we are 7 million above it right now). Giving away Splitter and waiving Scott for nothing gives a potential free agent leverage because they know we have to be over then min.

[Blunt91]

Thanks.